Switching to a 3PL: What to Look For

The devastating impact of the COVID-19 global pandemic was felt around the world. However, eCommerce was one of the few industries that experienced a positive impact from a business perspective due to the incredible surge of online shopping. With the shift in shopping behavior, brands of all sizes experienced the pain of successfully fulfilling and delivering orders efficiently. Larger brands like Amazon, Walmart and eBay have the capability to shift resources to meet demand. For smaller brands, this is a much bigger challenge.

Customer satisfaction depends on the efficient and timely receipt of orders. Various online studies and statistics regarding the importance of order fulfillment and customer happiness show the following:

• 13% of shoppers never come back if their delivery is not on time. The same study also states that 95% of consumers prefer free-one-day delivery as their ideal delivery method.
• 66% of customers prefer home delivery to any other type of delivery service.
• 70% of those customers are happy with the cheapest form of delivery.
• 55% of shoppers in the US prefer same-day delivery to any other time of delivery.
• For food delivery service,58% of consumers don’t want to wait more than 40 minutes for their deliver.

How a 3PL Can Help

It can be difficult for brands to meet this level of customer expectation without an exceptional order fulfillment system. Many brands have struggled to satisfy their customers by self-fulfilling. The role of an efficient third-party fulfillment partner (3PL) removes the logistics element so you concentrate on increasing sales, and product enhancement and development. A strategic partnership with the right 3PL can be a “match made in heaven” – efficient and successful fulfillment to help growth and increase market share.

Outcomes of Partnering with the Wrong 3PL

Which 3PL you partner with matters. Partnering with the wrong 3PL can have consequences that negatively impact your business, with the largest risk being unhappy customers. In the consumer-centric world, an unhappy customer can result in no customer very quickly.

The most essential element of an eCommerce business is to ensure that the delivery is on time, every time. As evident from the data above, it is THE crucial element that upsets your customer. However, several other factors can disappoint your customer if you have the wrong 3PL partner. Examples include insufficient packaging, incorrect orders, and bad customer service.

Other things to consider include:

• Not having state-of-the-art technology to manage the fulfillment process
• Lack of visibility into inventory
• Customer problems or queries not being resolved promptly
• KPIs agreed upon are not met or neglected

All or some of the above factors should be a red flag for you to start assessing your partner’s performance in critical areas such as:

• Transportation and freight management, including claims
• Warehouse management
• Distribution management
• Returns management

The above assessment will allow you to make an informed decision whether it is time to change your 3PL partner.

What to look for in a new 3PL

Changing your 3PL is a difficult decision for multiple reasons, number one being finding the RIGHT 3PL. It can be a daunting task – following is a checklist to consider before making this critical decision:

• Do they align with your vision and goals? They should understand your brand be a partner, not a commodity.
• Verify if they have the technology and infrastructure to meet your current business requirements and scale up as your brand/business grows.
• Are they customer obsessed? If the answer is yes, they will be agile and flexible to mesh with the ongoing changes in the eCommerce world.
• Evaluate their return management system because a major part of customer loyalty is driven by the ease of the return process.
• Review the capability, knowledge, and experience of their team to gauge if they have an efficient and reliable process to execute on this essential part of your business.

Protecting Your Brand Image

When selecting a 3PL to partner with, do your due diligence on the company. Define what’s most important to you and align it with the 3PL’s priorities. This is your company and reputation – your customers know you and trust you to deliver their orders. In a highly competitive environment, you cannot afford to lose the loyalty of your customers due to your 3PL partner.

About XPDEL:

XPDEL is a leading and hi-tech provider of Fulfillment and Logistics Services that supports both Direct to Consumer (D2C) and Business to Business (B2B) supply chains. We are the trusted eCommerce growth enabler with the mission of helping eCommerce brands improve sales channels with cost-efficient operations. Our advanced technology provides our customers seamless operational efficiency with real-time tracking of orders, inventory management, demand planning, and accurate forecasting with predictive analysis.