7 signs it's time to switch fulfillment providers

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7 signs it’s time to switch fulfillment providers

Switching your fulfillment providers or fulfillment methods can be daunting, so it’s no surprise that many merchants dread doing it. Unfortunately, that usually means sticking with a solution that’s no longer the best fit for your business.

There are multiple reasons for switching fulfillment providers — not all of which are bad (for example, when you’re growing and your current set up can no longer keep up). In this article, we’ll talk about the different signs it’s time to upgrade, what to look for in your next solution, how to choose the right partner based on your sales channels, and more.

When it’s time to switch your fulfillment providers

The common signs that indicate it’s time to switch fulfillment providers are similar to the signs you’ll face when it’s time to move from in-house to outsourced fulfillment.

1) Your on-time-delivery rate is slipping

If you notice your delivery times and shipping speed standards are slipping, it means your customers are suffering. Late deliveries create poor customer experiences, and lead to negative reviews and refund requests. Whatever fulfillment provider you choose needs to be able to deliver reliably and on time.

2) You have high cart abandonment rates

If you have high cart abandonment rates, slow or expensive shipping might be the cause. If your fulfillment provider can’t offer reliably fast delivery at a competitive rate, you’ll have to make up for it by only offering slower shipping methods, or charging your customers a premium rate for expensive fast shipping. Neither of these options is ideal.

3) Your seller ratings are falling

Have you noticed a drop in your selling ratings, either from poor reviews or poor performance? Those ratings are an indication of something wrong with your product or process, and slow delivery speeds can contribute to this.

4) Your items are arriving damaged

If your deliveries are arriving damaged, or the packaging looks like it’s been opened or tampered with, your brand will lose the trust of your buyers. Be sure to check the quality of your supply and that the manufacturer is sending pristine items. If that is all in place, then the problem usually lies with your fulfillment provider,

5) Your costs are too high

Offering fast delivery shouldn’t break the bank (which will lower your net revenue), or drive your product costs up so much that you have to raise your prices (which will lower your conversion rate). For example, your fulfillment provider should be able to achieve fast delivery speeds without having to resort to air options with every order, which is unsustainable.

6) You’re growing or ready to grow

If you’re experiencing high growth rates, congratulations! But your fulfillment provider should be able to keep up and remain in stride. If you’re growing and running into more late deliveries, damaged goods, or missed deliveries, it may mean that your current fulfillment provider cannot handle the additional volume.

7) You want to qualify for fast shipping programs

If you’re ready to qualify for fast shipping programs, such as Walmart 2-day delivery or eBay 3-day delivery, but your current fulfillment provider cannot meet the metrics needed, it may be time to find another partner that can.

What to look for in a new fulfillment partner

If any of those points above resonated with your situation right now, it’s time to find a new fulfillment partner. However, you need to choose carefully, because every switch costs time and money.

To help you make this decision, we list a few questions to ask a logistics provider to help you gauge the fit.

Do you have experience working with eCommerce businesses similar to mine? This question is useful because each business has different intricacies. A beauty merchant has different needs than a coffee brand. If a fulfillment provider serves other similar businesses to yours, it’s likely they know the small things that could otherwise get missed.
What products do you support? You should ask this if your items are perishable, contain batteries, have chemicals, or the like. Check their capabilities and restricted products list to make sure they’re a good fit.
Do you have capacity constraints? eCommerce is all about growth, which means your ideal fulfillment partner should be able to grow along with you. Check to make sure they can support you in high sales periods like the holidays.
Where are your warehouses? Your inventory locations can affect things like sales tax, inbound cost, and delivery speeds. Ideally, you want warehouses that are as close to your demand as possible.
What integrations do you work with? Integrations make sure your entire tech stack works together without data loss or mistakes. Look for a fulfillment center that integrates seamlessly with your favorite tools.
What is your pricing? Your fulfillment pricing will affect your overall revenue, as well as your product pricing. Too high, and you’ll have to raise your prices and lose conversions.
Will we get real-time inventory data? The ideal fulfillment partner should be able to give you insight into where your items are, and keep your buyers informed about their purchases.
How quickly can you fulfill items? Although it might be an obvious question, price will be a key differentiating factor for any fulfillment partner.
Do you support returns? Returns can be a headache for many eCommerce merchants, so having a fulfillment provider who can handle returns will remove a lot of the headache from selling and customer support.
What’s your policy if you lose or damage my inventory, or when shipments are late? Accidents happen, and that’s to be expected. What does your fulfillment partner do after? Ask them how they handle lost, damaged, or late deliveries.
Can I get some referrals from other customers? If you’re still on the fence about a partner, ask to speak with some of their other customers. It can speak volumes about their experience — don’t forget to ask about a time something went wrong and what happened.

Choosing the right partner based on where you sell

Another thing to look at when choosing your fulfillment partner is your current and ideal sales channels. For example, if you’re selling on Amazon, Fulfillment by Amazon should be one of your top choices. However, if you eventually want to start selling on Walmart.com as well, you cannot with FBA, which means you’ll need to find an alternative.

Every marketplace has their own fulfillment solution, from FBA to Walmart Fulfillment Services, and even Wish Fulfillment. Eventually, marketplaces will all offer fulfillment to stay competitive with merchants.

Your fulfillment partner should be able to act as both a primary fulfillment method and as a backup to any other primary options wherever you sell. For example, you may want to sell on Amazon, Walmart.com, and Wish. You would use FBA for Amazon, and Deliverr for Walmart.com and Wish, while keeping it as a backup for FBM orders in case you run out of stock in FBA.

What to do after you’ve switched

After you’ve found the right fulfillment partner and made your move, it’s time to talk about growth. There are different ways to find success depending on which marketplace or channel you’re selling on.

Here are a few resources to get you started.

Selling on Walmart

Selling on Amazon

Selling on eBay

Selling on Wish

Selling on Shopify

More about Deliverr

Deliverr Inc. is a technology-based fulfillment company that enables eCommerce merchants to offer two-day and next-day delivery badges on their websites and popular online marketplaces like Walmart, Wish, eBay, and more – helping merchants increase sales and maximize return on ad spend. The San Francisco-based company operates an intelligent nationwide warehouse network that uses algorithms to allocate inventory across and decide the best shipping method to ensure fast fulfillment. All Deliverr services are included in a single low-fixed cost, so sellers know exactly what they will pay for fulfillment from day one. The company has native integrations with most leading eCommerce platforms, allowing sellers to create an account in minutes, send inventory into the Deliverr network, and start selling with 2-day and next day delivery in as little as one week.