Why Should You Change Your Current 3PL Service Provider? When Is The Right Time to Change?
Are you still struggling with the fact that your 3pl service provider frequently sends the wrong items to your customers and cannot understand your needs from your point of view? Are you still frustrated that the technical support from your 3pl warehouse does not meet your business development needs? Are you still disturbed by the lack of transparency in the charges offered by 3pl service providers?
The unsuitable 3pl warehouse is to blame for this, which has impacted your company’s operations. Please take 8 minutes to read this article, which will go into great detail about the advantages of selecting a reputable 3pl service provider for your company and the things to consider when changing your 3pl warehouses.
The benefits of a well-matched 3pl service provider for e-commerce business
In this era of rapid information development, we live in a world where data drives most of our daily activities. E-commerce sellers have chosen to work with 3pl warehouses after learning about 3pl service providers. It has also become a trend to outsource the logistics of e-commerce business to 3pl warehouses.
The superiority is manifested in the following 5 points.
1. It is beneficial for companies to focus on the core of their business.
Since the resources of any enterprise are limited, it isn’t easy to become an expert in all aspects of the business. For this reason, enterprises should focus their main resources on their primary business, while the storage, logistics, and other auxiliary functions are entrusted to professional companies.
2. The flexible use of new technologies by 3pl service providers enables information-based inventory, helping companies to reduce costs and improve competitiveness.
Professional 3pl service providers can follow the technology trend and constantly update information technology and management processes. E-commerce companies usually find it too costly to develop fulfillment-related technologies or have long time cycles to update their resources or technology. Different retailers may have various and changing distribution and information technology needs. At this point, 3pl service provider logistics companies can meet these needs quickly and cost-effectively.
3. Reduce asset investment and accelerate capital turnover.
Regarding the lease of warehouse space, it is challenging for e-commerce sellers to find a warehouse that perfectly meets the user’s needs using traditional methods. In most cases, the capacity and demand of the warehouse finally found cannot be ideally linked. The warehouse located is either too large or too small. The investment of time and money is inestimable.
The third-party warehouse integration of resources can solve this problem, and e-commerce sellers only need to pay the cost of using the storage area, and related service fees, significantly reducing unnecessary expenses.
Suppose the e-commerce business wants to develop its information network technology in addition to the investment in research and development costs. In that case, it must also be equipped with the appropriate resources. The creation of such system functions is customized research and development according to their business needs, and the understanding of other businesses or the development of the industry is not comprehensive enough. The effectiveness of product development is relatively lagging. It is a heavy burden for SMEs that lack capital and information sources. Therefore if you use 3pl service provider, logistics companies can pay a small amount of customization of research and development (if it is a universal demand, the cost is even lower) to reduce the investment in this area.
4. No need to spend workforce and money on warehouse management
E-commerce self-fulfillment requires e-commerce sellers to have a warehouse management system, which involves e-commerce sellers arranging their relevant warehouse management personnel to carry out warehouse operations, including product management, regular inventory counts, picking and packing shipping according to order information, and other processes. These need to recruit the relevant personnel responsible for good warehouse management issues.
Especially during the peak season or promotion, e-commerce store orders soared, resulting in warehouse management personnel being overwhelmed and not avoiding shipping errors. Significantly increase the frequency of consumer returns and exchanges, resulting in a drop in the store’s relevant score, which is not worth the loss. Professional 3pl warehouses have many years of experience in warehousing and shipping services. Even during the promotion activities, they still complete the shipping task efficiently and accurately.
5. Professional 3PL partners provide flexible and diverse customer services to create more customer value.
If you are a raw material supplier and your customer urgently needs replenishment, the best solution is to have a regional warehouse. Through the 3pl service provider‘s network of warehousing services, warehouses are distributed across multiple regions to enable “warehouse-to-warehouse connectivity” and rapid deployment to meet your customer’s fast replenishment needs. You don’t need to redeploy capital to build new facilities or long-term leases and constraints by your operational flexibility.
In addition to this also includes 3pl service providers of warehousing and distribution integration of the advantages of the service. Therefore, the benefits of e-commerce sellers choosing 3PL warehouses are still undeniable and influential, which is why traditional warehousing began to decline gradually.
ShipA2Z uses information technology and intelligent means to help e-commerce enterprises customize their e-commerce warehousing and distribution services, strengthen e-commerce warehousing and distribution logistics technology and business model innovation, and promote the integrated development and benign interaction of e-commerce warehousing and distribution logistics.
What is the right time to change 3pl service provider? The key to this answer is to analyze the e-commerce business’ own needs. Each company’s development situation is unique and cannot be generalized. E-commerce sellers need to investigate whether the current cooperative warehouse can meet the needs of the fulfillment service. Suppose the current stage of the warehouse area has not been able to meet the company’s existing business expansion needs, and the degree of technical support can not keep up with the development of the business. In that case, these situations require e-commerce sellers to consider replacing the new 3pl logistics provider. But before changing the cooperation of the 3pl warehouse, service providers need to do further inspection work and change the warehouse process details of the work to be more considered to follow the work to eliminate worries.
Considerations for changing 3pl service providers
- The scale of the third-party warehouse
It is the most intuitive factor to judge whether the 3pl service provider is reliable. With a specific scale of the warehouse, security will be relatively higher. For example, the warehouse storage area, warehouse workforce, and other factors are very reliable for examining the content.
If the warehouse size is insufficient, then the shortage of storage space will become a problem you must face often. It has a significant impact on the fluidity of the supply chain with e-commerce. Although the industry boasts intelligent management for warehouse labor issues, the necessity of manual operations in the warehouse is still spread throughout the various aspects of compliance. Due to labor problems caused by low warehouse efficiency and warehouse capacity burst, e-commerce sellers not only have to suffer the consequences of the pile of goods but also pay additional inventory costs.
We all know that the more remote the location of the warehouse, the lower the cost; why should we be concerned about the location of the 3pl warehouses? In fact, otherwise, 3pl service providers for e-commerce sellers and retailers are an essential part of the supply chain to provide B2B transfer, FBA return service, or drop shipping service. Regardless of which business needs, third-party warehouse location has a significant impact.
Cooperative 3PL warehouses are too remote or too centralized, which directly affects the timeliness of product arrival; secondly, although the geographically poor warehouse charges are cheap after the product is out of the warehouse, the package also needs distribution links. Customers, if multiple geographic areas have inventory, compliance with the actual situation of the customer to do an excellent job of goods “intelligent warehousing,” regardless of which city the goods are shipped to, are very convenient and fast. On the contrary, you need to pay a higher cost for final delivery, which is not worth the loss.
“We started working with ShipA2Z in 2022, and they have brought us transformative changes in warehouse management and parcel delivery services. Before we only had one third-party warehouse, ShipA2Z provided us with a fulfillment solution that supported us in putting the products in three warehouses in the east, west, and central part of the United States, respectively, and the coverage of the shipped zone2 was increased from the original 5% to 40%, which greatly saves our tail-haul logistics costs, and saves a considerable amount of money in the current industry environment.” Mr. Fu Mydepot, CEO”
- The efficiency of the warehouse is the critical criterion for assessment.
In addition to the route congestion during the new crown epidemic caused by the bursting of warehouse space, the biggest reason for such a situation is that the 3PL warehouse itself is often too inefficient in its operation. How long does it take for goods to be received, counted, and discharged from the warehouse? After the e-commerce sellers’ side of the fulfillment instructions, how long will the warehouse start to fulfill, and so on? All these can see whether the target warehouse is a reliable partner.
If the 3PL service provider is bursting at every turn or often facing labor problems, the overall operational efficiency will certainly bring negative impact, then the reliability of such a warehouse must be very obvious to you.
- The order management system’s support is “intelligent” enough?
If a 3PL warehouse does not have its operating system, no matter how reliable it is, we feel it is “unreliable.” We are now in the “intelligent era” if the management of inventory and order fulfillment is still using Excel records, which will undoubtedly be in the verification of stock, shipping, and other aspects of frequent errors, the performance of the order omission, inventory disorder, and ultimately will make the seller suffer.
ShipA2Z has its order management system, which has the function of “intelligent distribution.” Meanwhile, the official website provides the “Warehouse Coverage Calculation” to help calculate warehouses’ delivery zone coverage rates in different areas and calculate the required logistics cost. When your inventory is below the set threshold, The system will automatically issue an early warning, reminding you to stock up or transfer goods from the nearest warehouse.
- The professionalism of the team personnel working together also needs to be considered.
If the abovementioned conditions align with the premise, we must examine the service team. On the one hand, we need to look at the professionalism of the staff equipped. On the other hand, we need to look at the effectiveness of the response and problem solving, whether it can quickly respond to the e-commerce seller‘s needs and significantly improve order processing efficiency.
- Make reasonable and adequate replacement of the warehouse plan
The most crucial premise of replacing the warehouse is to maintain the performance of the business itself, so replace the warehouse first to plan the corresponding plan. Try to replace the warehouse to minimize the impact.
Changing 3pl warehouses requires transferring goods from the original warehouse to a new cooperative warehouse. It is recommended to allocate the inventory of products that need to be moved without affecting the order fulfillment of the e-commerce store. For product preparation requirements, you need to communicate with the new 3pl warehouse in advance to understand. Such as whether the product requires the label and whether the need to palletize to improve the efficiency of warehousing and subsequent fulfillment house. The products to be transferred are recommended to cover the full range of SKUs in stock.
- Organize the product list and prepare for the transfer of products to the new warehouse
Prepare a clear list of goods while taking inventory of products. After confirmation, you need to submit a proper inbound order at the OMS of the new third-party partner warehouse. If allowed, it is recommended that the products should be palletized to speed up the loading and unloading efficiency and reduce the damage to the products during the transfer process.
- Conduct order fulfillment test in the final selected third-party warehouse
With the opportunity to transfer the product to the new 3pl warehouse, you can make a test to the warehouse throughout the receiving, putting away, picking, fulfillment, and other aspects of the test. The test time can be in 2 to 3 days. If there are no problems during this period, it is safe to send larger-capacity goods to the selected third-party partner warehouse.
ShipA2Z assigns a dedicated fulfillment consultant to the e-commerce customer while changing 3pl service providers to follow the customer’s situation throughout the process and to work seamlessly with them. We will strive to achieve timely follow-up and “0 error” in the transfer of warehouse work.
For the above introduction, if you are satisfied with the features of the services we provide, please leave your contact information on the home page of our ShipA2Z website, and we will have a dedicated fulfillment consultant to answer your questions.
E-commerce sellers have chosen to work with 3pl warehouses after learning about 3pl service providers. It has also become a trend to outsource the logistics of e-commerce business to 3pl warehouses. Choosing a reliable 3pl warehouse is essential. It is time to change your current 3pl service provider once they can not match your requests anymore.
With the development of technology, retail logistics is a competitive area full of opportunities. To grow further in this fast-paced industry, retail companies need to think carefully about distribution and logistics before the industry changes dramatically.