Your fulfillment provider is an important partner in your business. They help you get your products to your customers quickly and efficiently, which can significantly impact your bottom line. But what if your current fulfillment provider isn’t meeting your needs? We will help you answer the question: Is It Time for a Fulfillment Provider Switch?

One critical aspect that can significantly impact customer satisfaction and overall operations is the fulfillment process. Many companies opt for third-party logistics (3PL) providers to handle their fulfillment needs. While these partnerships can be beneficial, there are instances when it becomes necessary to consider changing to a new fulfillment provider.

We’ll explore the key indicators and factors that signal it’s time to make this strategic decision. If you’re experiencing slow order processing times, accuracy issues, and waning customer satisfaction with your current 3PL provider, fear not. In fact, we’ll guide you through finding a better solution tailored to your specific requirements.

Additionally, we’ll delve into the importance of scaling, technological capabilities, and value-added services when selecting a new 3PL partner. In particular, by considering these critical aspects, you can ensure a smooth transition and unlock new opportunities for growth and success in your business journey.

The first step in deciding whether it’s time to switch your fulfillment provider is recognizing the warning signs. For example, slow order processing times can lead to unhappy customers and impact your brand reputation. Accuracy issues, such as order errors or inventory errors, can result in costly returns and lost sales. In other words, declining customer satisfaction might indicate that your current provider is not meeting the expectations of your customers, showing you a need for improvement.

There are many essential factors that contribute to an efficient and reliable service. For instance, speed is critical in meeting customer expectations for prompt deliveries. We boast a 96.7% 2 day delivery when shipping out of both of our locations. Moreover, accuracy ensures that orders are fulfilled correctly, thereby reducing costly mistakes. Furthermore, a dedicated account manager can provide personal attention and address your unique needs asap.

Every business aims for growth and expansion. So, scaling becomes a crucial consideration when selecting a new fulfillment provider. Undeniably a partner capable of accommodating your growing demands will save you from frequent switches in the future. In effect, communication is vital to ensure seamless collaboration between your team and the fulfillment provider. Moreover, if you have a global presence or plan to reach international markets, prioritize providers with a strong global reach to facilitate smooth cross-border operations. 30% of our small package output is to international destinations.

Outstanding customer service is built on responsiveness, transparency, and accountability. Therefore, having a direct line of communication to your account manager is key!When it comes to fulfillment, a provider’s ability to respond promptly to inquiries, provide real-time updates, and handle issues professionally can make all the difference. Transparency in operations and communication builds trust and fosters a strong partnership. Above all, accountability is a important trait in a fulfillment provider. To be sure, knowing they will take ownership of any mistakes and quickly resolve issues builds confidence in your business relationship.

In recent times, the logistics industry has witnessed a significant shift in warehouse trends. The changing landscape of 3PL is evident throughout the logistics industry. As the demand for e-commerce spaces declines and economic challenges persist, the era of massive warehouses exceeding one million square feet seems to be slowing down. According to a report from CBRE, there has been a 36% decrease in large-facility deals from the first half of 2022 to the same period in 2023. This drop has had an 18% impact on the overall leased industrial space during the first half of the year, aligning with experts’ predictions made in late 2022.

Demand for 3PL surges as e-commerce reduces its footprint amidst market changes

Interestingly, ecommerce companies, which were once major players in the top 100 deals, have experienced a 50% reduction in the number of transactions from January to June 2023 compared to the previous year. The average size of the top 100 industrial lease deals also decreased from 926,683 square feet to 789,471 square feet year over year.

Amid these changes, third-party logistics (3PL) firms have been on the rise, securing a third of the top 100 deals. As many ecommerce companies struggle to manage their own order fulfillment, the demand for reliable and efficient 3PL services has surged. The 3PL sector ranks second, with 34 deals, just behind the general retail and wholesale category, which claimed 34 deals.

When it comes to the most active markets for industrial spaces, Chicago leads the pack with 11 mega-deals totaling 9.6 million square feet. Following closely behind are the I-78/I-81 corridor in Pennsylvania’s Lehigh Valley (9 deals totaling 8.6 million square feet), California’s Inland Empire east of Los Angeles (9 deals totaling 8.1 million square feet), and Dallas/Fort Worth (9 deals totaling 7.3 million square feet).

Warehouse space begins to normalize

The decline in activity this year is attributed to the record-setting growth experienced in 2021 and 2022. With retailers having previously required more extensive and larger warehouses to meet the surge in pandemic-driven consumer demand and store inventory, the current domestic inventory ratios have reached the desired levels, leaving some excess capacity. As a result, leasing activity is now normalizing.

The construction of warehouses of all sizes has also experienced a slowdown due to reduced demand and difficulties in obtaining financing approvals. While smaller facilities under 100,000 square feet near population centers are in high demand, there has been insufficient growth in this segment, leading to soaring rents. The scarcity of space in these locations has driven the need for smaller buildings.

In contrast, the completed projects in the first half of the year set a record in terms of space entering the market, reaching 144.1 million square feet. However, as of June 30, only 43% of this space was occupied, down from 73% in 2022. Larger corporations, retailers, and 3PLs are slowing down the most in leasing activities. Likely due to economic uncertainty and a possible saturation of extreme activities in previous years. These entities appear content with their current warehouse stock.

Source: CBRE

The digital revolution of e-commerce has propelled companies onto online platforms and digital marketplaces, ushering in a new era of possibilities. Nevertheless, despite the undeniable benefits, many distributors encounter hurdles when navigating the e-commerce terrain. Therefore, this blog delves into the challenges at hand and underscores the pivotal role fulfillment companies play in surmounting these obstacles.

E-commerce has triggered a seismic shift in the distribution sector. Consequently, with the advent of digital platforms, businesses now have the ability to extend their reach across the globe while streamlining their supply chains. This convenience-driven transformation empowers both buyers and sellers, ushering in a new era of commerce.

Research reinforces this paradigm shift, revealing that a staggering 94% of B2B decision makers consider the current omni-channel landscape to be as effective or even more effective than pre-COVID times. In effect, large distributors have eagerly embraced this digital tide, reaping the rewards. However, for smaller regional players, the relationship with e-commerce can be intricate.

One issue many businesses face is the limited visibility into customer browsing behavior. While distributors can observe website traffic, they often lack detailed insights into product preferences and the motivations behind customer interactions.

Enter fulfillment companies – we help to unravel the mysteries of online business. By partnering with fulfillment providers like us, distributors gain a granular understanding of their customers’ behavior, enabling them to refine their strategies and tailor offerings effectively.

Furthermore, e-commerce initiatives demand substantial investments of time, money, and technological resources. However, the shortage of these essential elements often hampers the success of an e-commerce venture. That’s where we come in. Armed with your warehousing to provide distribution expertise, we step in to bridge the gap. Our proficiency in inventory management, pick and pack services, and shipping and delivery solutions ensures that distributors can concentrate on growth without being bogged down by logistical complications.

Trust is cultivated through personal relationships. However, embracing e-commerce necessitates a paradigm shift, demanding the establishment of digital trust. This transition can be seamless with the aid of fulfillment companies.

Fulfillment relationships, in particular, enable distributors to leverage the capabilities of e-commerce while nurturing trust-based relationships. By synchronizing e-commerce analytics tools, distributors can measure performance, optimize customer journeys, and deliver exceptional experiences.

Distributors stand at a crossroads, where embracing e-commerce isn’t just an option – it’s a survival imperative. Above all, long gone are the days of only holding a brick and mortar operation. Fulfillment companies offer a strategic compass, guiding distributors to maximize their existing e-commerce investments. Given that, the fusion of data-driven insights and fulfillment prowess signals a revolution in customer engagement.

This transformation isn’t confined to the virtual realm; it extends to the physical world through last-mile delivery, cross-docking, and supply chain optimization. Fulfillment ensure that every facet of the e-commerce experience is seamlessly, enabling distributors to scale their operations while ensuring on-time delivery and order accuracy, which is at 99.5% currently for us here at Falcon.

The intricate relationship between e-commerce and fulfillment is achieved through cutting-edge technologies like cloud-based warehouse management systems (WMS), to track your inventory 24/7. It is important to realize the power of order tracking software, to monitor packages and ensure your communication with your customer is accurate.

As distributors embrace e-commerce integration services, fulfillment experts guide the orchestration of outbound shipments, employing packaging optimization, freight consolidation, and even value-added services (VAS) to elevate the customer experience.