When your business decides to partner with a third-party logistics (3PL) provider, it’s a big step towards streamlining your supply chain and freeing up time to focus on other key areas of your business.
Whether you’re a startup or an established company looking to outsource logistics, your first year with a 3PL provider will come with both challenges and rewards.
Understanding what to expect can help set you up for success as you transition into a smooth and efficient working relationship.
Let’s go through the key milestones of your first year with a 3PL provider, from initial setup to scaling your operations.
Initial Setup and Integration
The beginning of your journey with a 3PL provider is focused on getting everything set up and integrated. This phase usually includes:
- Onboarding Process: Your provider will require detailed information about your business, including your product SKUs, descriptions, dimensions, shipping requirements, and any other specifics like fragile items or temperature-sensitive goods. Expect a lot of communication back and forth as they get everything into their system.
- Technology Integration: One of the main components of the setup is connecting your systems with theirs. This includes integrating your e-commerce platform (e.g., Shopify, Amazon) and accounting software to their warehouse management system (WMS). There may be some initial hiccups as your systems sync, but most 3PLs have a dedicated tech support team to guide you through the process.
- Training: Both you and your team will need to learn how to navigate the new system. Expect some training sessions on how to track orders, manage inventory, and communicate with the 3PL provider. It’s important to get comfortable with the tools they offer to ensure smooth daily operations.
Establishing a Working Relationship
In the early stages, communication is key. You’ll likely be in frequent contact with the 3PL’s account manager or customer service team to ensure your needs are met. Expect a bit of back-and-forth as you fine-tune your expectations and address any small issues that arise.
- Transparency: One of the biggest benefits of working with a 3PL is the real-time access to inventory data, order tracking, and performance metrics. During your first year, expect to build a sense of trust through transparency and open communication channels. For example, this is something that Future Pro Logistics prioritises.
Fine-Tuning Operations
As the months go by, you’ll start to evaluate the performance of your 3PL provider. Performance reviews are common after a few months, and they help assess how efficiently orders are being fulfilled, if any errors are being made, and whether there’s room for improvement.
- Adjustments: Based on performance reviews, adjustments will likely be necessary. You might need to change how inventory is stored, tweak picking processes, or alter shipping strategies. Don’t be surprised if there are a few hiccups, but expect the 3PL to be proactive in resolving any issues.
Building Trust and Reliability
By the six-month mark, you should start seeing a more consistent service from your 3PL provider. Orders are shipped on time, inventory is correctly tracked, and customer service is responsive. This is when you can start feeling more confident in your partnership as you see their performance stabilise.
- Issue Resolution: While it’s normal to encounter some issues during the first year, a reliable 3PL provider should resolve any problems quickly. Whether it’s a shipping delay, a stock discrepancy, or a customer complaint, your provider should have systems in place to handle such issues with minimal disruption.
Handling Seasonal Peaks and Special Projects
During peak seasons like Christmas or Black Friday, you can expect extra support from your 3PL provider. They’ll work with you to ensure that extra inventory is managed and that shipping doesn’t slow down during busy periods.
- Special Projects: If your business is launching a new product or running a special promotion, your 3PL provider should be prepared to support these initiatives, whether it involves custom packaging or handling a large volume of returns.
Signs You Are Not Coping Well with Increased Orders
Every online business wants to see an influx of new orders. It can excite you about the future, and the numbers will be great for your profits. However, you also need to make sure that you have the right system in place to cope with this increase in orders.
You must make all of your customers happy and ensure they have a great experience with your business. Otherwise, they might not come back.
So, are you struggling to cope with all of the new customers you have? You must recognise the signs so that you can get help if it’s necessary. Let’s take a look at what they are.
Slow to Ship
In the modern age, everybody wants their packages the next day. If this is the type of service you advertise, you need to make sure you deliver. However, if you’re slow to ship due to coping with all of the orders, this can have a negative impact on your reputation. Know that customers aren’t sympathetic if you’re busy.
Making Mistakes
Are you sending the wrong products out to customers? This shows that things are rushed and members of your team are making mistakes.
Not only can this be disappointing for customers, but it can also increase your costs. You’ll have to send those items out again, and in some cases, you can lose money on whatever you’ve delivered if they don’t send it back.
Getting Complaints
One of the sure signs you’re not coping well is if you’re receiving complaints from your customers. They’re telling you directly that you’re not providing the experience they expect.
This is something that you can’t ignore, and if it continues, you could end up with no returning customers. Don’t forget the power of bad reviews once they’re online. This is something that you must avoid at all costs.
Conclusion
Your first year with a third-party logistics provider will be a learning experience. There will be growing pains, but also plenty of opportunities for growth and optimisation.
By maintaining open communication, regularly reviewing performance, and being open to adjustments, you’ll be well on your way to building a strong and efficient logistics operation. The key to success is building a long-term partnership based on trust, transparency, and mutual goals.
