Enough of all of the Valentine’s day chatter this week: we’re focusing on the flipsides of relationships. Let’s talk about breaking up, and why it could be a very good thing for you and your company.
In some (admittedly slightly tenuous) ways, a 3PL can be seen in the same light as your first boyfriend or girlfriend. They seem perfect when you first meet, everything goes smoothly for a while, but when you realise that you’re growing as a person and they’re not...then the cracks start to show. You notice that they can’t give you everything that you need. You start to question whether they were ever all that loyal to you anyway? Or were they just into the idea of being with you?
That lump in your throat you get when you realise you need to move on in order to support your growth...fine if you’re breaking up with a person. But when it comes to ditching your 3PL, send that guilt to purgatory. If your company's growing, some of the mistakes that you'll encounter can be absolutely mission critical. Here are 9 reasons why you should celebrate ditching your 3PL:
1. You’ll regain control of your warehouse...and your brand
Ownership can never be overrated. One of our clients, a pureplay sportswear brand, stated that one of the biggest reasons that they were moving away from working with their 3PL was so that they could own the final customer touchpoints. Before working with Peoplevox’s robust WMS, there was a black hole between the point that a purchase was made and an order delivered. They realised that the only way to ensure that end-to-end consumer expectations were met was by having complete ownership over all fulfilment processes.
2. You get to pick out loyal solutions partners
It’s rare to find a 3PL that’s able to completely buy into your growth plan. We’re not trying to demonise them, it’s just the reality of their business model. There are either 3PLs for small businesses or 3PLs for larger companies. There’s no real room for growth. So there’s going to be no real loyalty shown when you run into problems. When you’re shopping around for systems to use when taking your fulfilment back in-house, look for companies that have technology which can support your growth and a staff that cares.
3. There’s no ceiling to your scalability
Which brings us to your next point: when you’re working in-house, you get to define your own limits. You’re in control of your successes and you’re accountable for your failures. You can adapt quicker on your own merits, and with your chosen systems, than you would be able to with a 3PL. No ceiling. No limits. Hit the sky.
4. Peak periods won’t spiral out of control
Pressure is expected in a warehouse. Sales peaks are expected. So when there are high-pressure situations, or an influx in sales, you don’t want the systems that you work with to buckle because they can’t handle demand. This happens far too often with 3PLs.
5. Complete data transparency
This is a big problem. Data is the lifeblood of most e-commerce companies. By having it all stored with a 3PL, you’re not in control of it. And you’re in danger of losing it.You need to own your data: being dependant on third parties is a dangerous game to play.
6. Kiss goodbye to fulfilment errors
When any system that’s designed with an upper ceiling of total handleable order volume has to cope with a demand that exceeds their capabilities, mistakes will be made. Whether this means overselling, or mispicking, the end result isn’t going to be positive for you, nor for your end consumer. Quick, efficient and scalable fulfilment should be your number one priority. Ditch the 3PL, and invest in systems which fully share your number one priority.
7. Wave hello to an improved end-to-end customer experience
When you own all of your processes, you can invest in systems that foster positive increases to CSAT scores. When it’s known that every single process within the warehouse is working to ensure that the customer gets the products that they ordered quickly and accurately, the amount of related complaints completely dissipates. And by matching consumer expectations, loyalty improves and the number of repeat orders increases. Get it right, and customers come back. Safeguarding all aspects of fulfilment is a strong way to ensure this happens.
8. Efficiency improvements everywhere
3PLs usually charge by the hour, or by pick price. Because of this, it’s in their best interest to make sure that there’s either more time spent picking, or there are more picks made. Both of these mean that, ultimately, there’s no real incentive to improve your overall efficiency. Prioritising inefficiency is baked into their business model.
9. Swimming in cash: immediate ROI
Simply by making the switch from working with a 3PL to moving fulfilment management in-house, you can make easy savings of 15-20%. This is taking into account the investments that need to be made in buying in new systems. Combine the operational savings with the clear cost advantages to working with an e-commerce WMS that easily integrates with all other critical systems and that prioritises cost efficiency above everything else, the decision to move fulfilment in-house makes a lot of financial sense.
If any of the situations in this blog ring true for you, then gussy up in the mirror, put on your best ‘it’s not you, it’s the enduring priorities of my business’ smile and take the first step to a future where you’re in control of your brand’s destiny. They’ll get over it.