Is it time to Break up with your Fulfillment Center?

Every fulfillment center wants to do a good job. They take great pride in being custodians of the customer experience. However, not all fulfillment centers are equally good at all things. And any time you’re dealing with human beings it’s not uncommon for things to get lost in translation. 

‍Here are 5 telltale signs it time to break up with your fulfillment center: 

1. It feels Forced- The relationship is starting to feel strained on both sides and may be heated at times. It may feel like you’re a square peg in a round hole. We are getting to a point where brands can choose what fulfillment centers they want to work and vice versa. It’s important that you have a relationship that is mutually respectful and is focused on the customer as opposed to something that feels personal or just isn’t there. 

2. Your Business has Fundamentally Changed- Maybe you started out as a retail brand and moved into DTC. Perhaps your customer base has shifted geographies and you need to be in a different geography. Maybe your products have gotten significantly heavier or lighter. When you initially selected your fulfillment center there were a certain set of assumptions that you had- if those assumptions changed you shouldn’t be afraid to rethink your fulfillment strategy. I wouldn’t recommend moving for just price alone. 

3. You’ve Outgrown their Capabilities- Sometimes your fulfillment center is unable to keep up with your growth. Most fulfillment partners can scale with you if you are being a good client for them. This means making sure that you’re providing a forecast. Your forecast is going to be wrong, but it’s better than shooting in the dark. Brands need to share their thoughts on how many orders they are going to have, how many inbounds there are going to be, how many SKUs or storage needs they are going to have etc in a rolling 6-12 month view each month. 

This transparency can serve as a base to understanding if a fulfillment center is great with up to 500 orders a day and then perhaps cannot handle more. Then once you get to 600 or 700 orders a day, the challenge then is having an honest conversation with the fulfillment center. Asking them, “Hey, do you want to grow with us? And do you want to do this, or has the relationship run its course and we need to find someone else”. Not everybody wants to grow to be massive. 

4. Your Needs have Changed- One common question that people will have will be “Why don’t you just use Amazon FBA? They’re taking over the world”. It’s true that Amazon FBA does a fantastic job. They typically get all of their orders out on time and you don’t really have to worry about inventory going missing in most cases. However, you will never talk to a human and there is absolutely zero customization that you are able to do. Understanding that there are different fulfillment centers that are good at different things is important. You want to make sure that you are paying for what you need, not what you don’t need and being really honest about what you actually want to pay for. If you optimized for the wrong thing or need a different level of involvement it may be time to move. 

5. You haven’t lived up to the Hype- Sometimes there is such a misalignment between ambitions and reality that it may not make sense to continue. Maybe your funding didn’t come through or perhaps the new product launch didn’t go as expected. Perhaps returns are much higher or inventory is sitting for much longer than expected. 

These are all sorts of things that both sides should take stock of and reassess if this is the type of relationship that they want to keep. If they knew what they know now, would they take your business or would you renew with them? If the answer is no, then you’re probably better off looking for a new provider.