The Step-by-Step Guide to Switching 3PLs to Increase LTV

The Step-by-Step Guide to Switching 3PLs to Increase LTV

Cathy Carpetta

April 19, 2024

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In today's e-commerce landscape, third-party logistics (3PL) providers play a crucial role in the success of e-commerce and omnichannel brands.

As the e-commerce market continues to evolve and competition intensifies, working with the right 3PL provider can make a difference based on the post-purchase experience.

Why are 3PLs so important? They handle the storage, transportation, delivery of goods and product returns, allowing companies to focus on their core competencies and grow their customer base.

One of the key reasons for switching to 3PLs is to take advantage of new technologies and services that can improve fulfilment and shipping processes.

For example, using a 3PL with advanced tracking and reporting capabilities can help businesses better understand their customers' purchasing behaviour and make more informed decisions about inventory management.

A recent survey found that nearly 80% of customers are willing to pay more for faster delivery. Bigblue clients using Fast Tags (rapid and free delivery badges) in the product pages observed a 26%+ conversion increase. 
Source:
Retail Touchpoints and Bigblue

Following the steps outlined in this guide, businesses can smoothly transition to a new 3PL and see a significant increase in their e-commerce Lifetime Value (LTV).

This increased revenue can be reinvested into marketing and other growth initiatives, leading to even greater success in e-commerce.

What you will discover in this guide:

  1. When is the right time to change your fulfilment partner 
  2. Choosing the right partner
  3. Getting ready for the switch
  4. Start shipping with Bigblue in 2 weeks

Part 1. When is the right time to change your fulfilment partner?

The right time to change your fulfilment partner depends on various factors. You can ask yourself these questions:

  • Is your current logistics partner meeting your needs?
  • Does your partner help you achieve your business goals? 
  • Can your 3PL help you expand to new markets easily?
  • Can your partner be flexible and have the capabilities to support your brand’s growth? 

The right time to change your fulfilment partner is when your current partner is no longer meeting your needs and hindering your business growth. By switching to a new partner, you can improve customer satisfaction, reduce costs, and achieve your business goals.

If you are experiencing any of the following issues, it may be time to consider switching to a new fulfilment partner:

1. Your brand is growing, and they cannot keep up the pace

61% of businesses cited the inability to scale as a reason for switching fulfilment partners.
Source: Survey by Practical E-commerce

As your brand grows and expands, your fulfilment partner must be able to keep up with the increased demand. If your current 3PL cannot handle the volume of orders or the pace of growth, it may be time to consider switching.

For example, suppose you are experiencing a surge in sales during a holiday season or due to a successful marketing campaign. Your fulfilment partner should be able to handle the increased volume without any issues. If they can’t do so, it could lead to shipment delays, inaccurate orders, and frustrated customers.

“We managed to absorb in 24 hours the 1200 orders that were placed during the show Qui Veut Être mon Associé (the French edition of Shark Tank) and that was thanks to Bigblue.”, says Emilie Bernier O’Donnell, Founder of Detective Box

On the other hand, if you have a fulfilment partner that can scale with you, they can help you efficiently manage the growth of your business. This could include adding warehouse space, hiring more staff, and implementing new technology to streamline operations.

2. You’re experiencing performance issues

❌ 63% of consumers will unlikely return to a retailer after a negative fulfilment experience.
Source: eMarketer

If your fulfilment partner frequently makes mistakes with orders and consistently fails to meet your service level agreements (SLAs), it can lead to unhappy customers and lost revenue.

Some common performance issues that may indicate a need to switch 3PLs include:

  • Inaccurate order treatment: If the 3PL consistently sends incorrect items, quantities, or shipping information, it can result in frustrated customers and expensive returns.

🔁 25% of consumers have returned an online purchase due to receiving the wrong item.
Source: survey by Forrester.

  • Slow deliveries: If the 3PL regularly misses shipping deadlines, it can cause delays in receiving products and disappoint customers.


⏰ 90% of consumers expect to receive their orders within 5 days or less.
Source: Invesp

  • Unreliable operations: If the 3PL is frequently experiencing issues such as lost or damaged orders, warehouse errors, or inadequate inventory management, it can disrupt your supply chain and impact your ability to meet customer demand.


💸 29% of consumers have
abandoned an online purchase due to a problem with the delivery process.
Source: eMarketer

According to a survey by Logistics Management, 59% of businesses cited poor performance as a reason for switching to 3PLs. If you are experiencing any of the issues listed above or are simply not satisfied with the performance of your current 3PL, consider a change.

3. You are launching your brand in a new market

35% of businesses cited the need for a 3PL with local expertise as a reason for switching providers.
Source: survey by eMarketer

If you are launching your brand in a new market, consider partnering with a 3PL familiar with the market's specific requirements and regulations. Here are some examples of how a 3PL with experience in your target market can benefit your business:

  • They can help you navigate any local regulations or compliance issues. For example, if you are launching in a market with strict customs laws, a 3PL with experience in that market can help you properly classify and label your products to ensure they clear customs smoothly.

  • They can help you choose the most cost-effective and efficient shipping methods. For example, if you are launching in a market with high demand for next-day delivery, your 3PL can leverage local partnerships with carriers and negotiate prices to meet that demand.

    In fact, 57% of companies that have outsourced their logistics functions to a 3PL have experienced cost savings as a result. (Source: DHL.)

  • They can provide local customer support and help you address any issues swiftly.

  • Provide faster delivery times. A study by the Council of Supply Chain Management Professionals found that brands using a 3PL for their international shipping experience faster delivery times than those handling logistics in-house. 

Bigblue Tips

At Bigblue, we use Royal Mail and UPS, the UK's two preferred carriers, for orders shipped from our Kûehne+Nagel warehouse in the UK.
If you work with Bigblue, you can also leverage our fulfilment centre across Europe, we have six warehouses in France and one in Spain! 
Use Bigblue to quickly start selling in new countries and expand your potential customer base. 


👉
Discover Bigblue’s international warehouse network

4. Their technology is slowing you down


Companies that use advanced analytics to track and optimise their supply chain operations experience an average of
28% higher profit margins than those that do not.
Source: Accenture

Is your 3PL supporting your growth or hindering it? Does their technology help you make strategic decisions to increase savings and turnover? 

  • A robust Transportation Management System (TMS) or Warehouse Management System (WMS) will improve efficiency. A 3PL with more advanced technology can streamline and automate order tracking, inventory management, and shipping processes, saving time and reducing errors.


Bigblue Tips


Bigblue’s TMS  provides real-time updates on the status of shipments and proactively communicates in the event of delays or disruptions.


👉
Discover Bigblue’s TMS


  • A 3PL will enhance your visibility with real-time tracking and analytics tools. You can get a better understanding of your entire supply chain, helping in identifying bottlenecks and inefficiencies for more informed decision-making.

  • A 3PL with the right tools will increase your competitiveness. In today's fast-paced e-commerce market, it is important to offer customers a seamless and efficient shopping experience.

  • A 3PL with advanced technology will help you reduce costs in the long run. For example, identify and propose the most cost-effective routes and carriers, resulting in lower transportation costs.


Bigblue Tips


Unlock efficient logistics with Bigblue's smart carrier offer. Leveraging AI-powered delivery options, we ensure the best shipping method is chosen to boost conversions and optimise pricing.
In 2023, they outperformed standard carriers' on-time delivery by 9%

👉
Discover Bigblue’s smart carrier offer 

5. They don’t have the necessary processes for your products

In 23% of cases, damaged packaging will hurt customer perception. And to make matters worse, there is a more than 70% chance that the customer will not order from you again.
Source:
Raja

Products such as perfumes, food, and fashion need specific storage and shipping processes, as well as compliance with regulations. A knowledgeable 3PL can manage these efficiently. 

If your current logistics provider lacks these processes, switching to a new fulfilment centre can bring the following improvements: 

  • A 3PL can ensure proper care and protection during storage and transportation to minimise damaged or defective items reaching customers.
  • Enhanced processes for packing and shipping enable faster turnaround times and superior customer service.
  • Significantly decrease your overall costs by having fewer returns and more repeat purchases from happy customers. 
Frequently asked questions
Everything you need to know.
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