Deciding when to change your order fulfillment partner is a significant decision that can seriously impact your business operations. Here is a list of common scenarios where a brand might consider changing its order fulfillment partner:
Consistently Poor Performance:
Do they meet your service level agreements (SLAs) for order accuracy, on-time delivery, or other critical metrics such as EDI transaction updates, shipping confirmation times, and inventory accuracy?
Technology Issues:
Does your order fulfillment partner use a homegrown WMS and/or capable of being updated with the latest technology? Most homegrown systems have huge limitations for upgrades. Do they have REST API integrations easily available for you to tap into? Is this too cost-prohibitive? Does your order fulfillment partner have a customer portal to view KPIs and metrics in real time? With today’s technology, these are big red flags for any brand looking to scale, so you may want to make a change sooner and before it’s too late.
Scale and Growth:
Can your order fulfillment partner scale up or down as your needs change? If they can't scale to meet your increased demand or don't offer additional services you may require. Do they have the capacity for additional inventory? Can they handle larger kitting or assembly projects? If not, it may be time for a switch.
Costs Changing:
Is your order fulfillment partner cost-competitive? Are they willing to work with you to help you mitigate financial pressure areas you may be temporarily experiencing? Your cost efficiency is a crucial factor in maintaining margins and avoiding any unexpected costs or margin erosion.
Poor Communication and Support:
If you experience ongoing communication issues or a lack of support from your current order fulfillment partner, it’s time to start looking for a replacement partner. Poor communication can ruin a business relationship with your brand and your customers, as well as disrupt your overall operations.
Geographical Expansion:
Are you looking to expand into new markets or regions? Does your current order fulfillment partner have additional locations that fit your geographical needs to be closer to your suppliers or customer base? You need to ensure that any location expansions meet your individual business needs and not just your order fulfillment partner. Ensure all discounts are in place with your suppliers and the new location and that freight rates are not going to increase by doing so.
Contract Renewal Period:
Are you operating under a long-term contract with your current fulfillment company? When is it up for renewal? This is an opportune time to reassess your costs, needs, and just may be the right time to start to explore other options.
Legal or Compliance Issues:
What do you do if your order fulfillment partner is not compliant with industry regulations or legal requirements? Do they have the capability but won’t engage due to costs? Your order fulfillment partner is an extension of your own business and your expectation should be that they will be 100% legal within all regulations and legalities of the industry. If not, it is time to look for a new order fulfillment partner.
Before making any changes to your order fulfillment partner, it's always advisable to conduct a thorough analysis of your current fulfillment partner's performance. Consider the potential benefits and drawbacks of switching, and evaluate the capabilities of potential new partners. Also remember to consider the transition process (moving inventory, integrations, etc.) and how it might impact your customers and operations. It's often beneficial to plan such changes during periods of lower business activity to minimize disruptions.
Here’s a quick checklist for your current order fulfillment partner:
Is the facility clean and clutter-free?
Can you talk to someone on the phone each time you need to?
Do you have real-time access to your inventory and needed data?
Are they receptive to you changing wants/needs?
Is their technology at the cutting edge? Is it user-friendly to you?
Do they offer freight discounts to you?
Is the management team available to you when needed?
Are you able to visit the facility any time you like and view your inventory or processes?
Helping brands move from their existing order fulfillment partner to one of our 11 locations nationally is something we specialize in, and happens more than you could realize. We develop a detailed plan with our clients to help them move into a Verde location without any disruption to their business, as we have with over 55 clients from around the globe. If you want to learn more about how we can help you transition to Verde, please let us know: Click Here