Transitioning from a Fulfillment Provider That’s Not Working for Your Business
By Esther Kestenbaum Prozan
With the rise of direct-to-consumer (D-to-C) brands, it has never been as important to prepare and ship orders at a near perfect level, in order to delight customers and prevent poor shipping experiences that lead to negative reviews and press.
Outsourcing fulfillment means the shipping function is completely out of your control, so you must rely on your partner to keep your reputation intact. Consistently monitoring the performance of your fulfillment center is imperative so that you can make any necessary adjustments if performance falters. If your provider isn’t operating at the highest level, a swift change can keep your company from suffering devastating consequences.
Below is a look at some factors that cause businesses to leave their current fulfillment provider, and steps you can take to ensure a smooth transition to a higher-quality fulfillment company if you find yourself in a situation where your fulfillment services are suffering.
KEY REASONS WHY COMPANIES SWITCH FULFILLMENT PROVIDERS
- Poor performance issues such as delayed deliveries, inaccurate items picked, and inventory discrepancies
- Billing and invoice inaccuracies such as abrupt pricing changes, incorrect shipping rates, and billing inconsistencies
- Technology barriers, including reporting problems and/or incompatibility with your CRM or sales platform
- Insufficient resources or the inability to meet the needs of your growing business
- Poor customer service as illustrated by failure to communicate and a lack of consistent support when problems arise
THE CONSEQUENCES OF STAYING WITH AN UNDERPERFORMING FULFILLMENT PROVIDER
Remaining with an underperforming fulfillment company can result in minor order inaccuracies, severe delays, and even lost customers. When a provider falls short in multiple areas, the outcome can be devastating to your industry reputation and bottom line. Here are some of the specific consequences of remaining with a poor fulfillment provider:
- Financial Loss: Order cancellations, high expedited shipping costs, and free replacements erode a company’s profit margin
- Damaged Reputation: Poor online reviews a can cause long-term damage to your company’s credibility
- Lost Customers: Nearly 60% of people won’t return to a company that fails to deliver proper service
- Wasted Time: The time and human resources required to repair fulfillment problems can spiral out of control after multiple issues
HOW TO MAKE A SEAMLESS TRANSITION TO A NEW FULFILLMENT CENTER
The path to a smooth transition begins by establishing goals and expectations for your new provider. This involves outlining your requirements for orders, inventory and special services, as well as expectations regarding time frames and reporting.
The best fulfillment companies collaborate on specific service-level agreements (SLAs) that will govern your entire relationship. Make sure that you “ink” these details in your contract. Once an SLA is set, establish procedures to help ensure that you receive what you need from your new provider. Here are some important points to cover:
- System integrations: Ensure the new provider can successfully integrate with your CRM or sales platform
- Shipping schedules: Clarify shipping and delivery time frame goals, then ensure your new provider can meet them
- Key points of contact: Designate a primary point of contact and confirm how you can best reach that individual
- Meeting schedules: Determine how often you and your provider will meet and which meetings will occur in person vs. conference call
- Reporting frequency: Establish a reporting protocol that will enable you to plan monthly and quarterly progress reviews
As you and your new provider work together to cover these points, make sure that you’ve taken measures to minimize disruption within your organization. For example, you should determine in advance how much product you’ll need to move to the new facility as you exhaust existing inventory with your previous 3PL.
THE SINGLE GREATEST KEY TO A SUCCESSFUL TRANSITION
While the process isn’t always easy, transitioning out of a bad fulfillment company is necessary, especially if your existing provider lacks the resources to handle your orders quickly and accurately. The key to a successful transition is to ensure that your new fulfillment provider is a perfect match for your company and its goals.