Managing relations with your 3PL provider: ignore this at your peril

April 15, 2023

Once you've outsourced the fulfilment arm of your business, you can't forget about it entirely. While you jet off to sip pina coladas in the Maldives, you'd be a fool to assume fulfilment is never something you'll have to think about again.

Like everything in life, your ongoing success will depend in large part on the quality of the relationships you forge and maintain.

Why the relationship is important

So you've done your research. You found several potential fulfilment partners, got quotations, made site visits and chose a partner based on their strong workplace culture rather than the price alone. Good job.

The whole point of doing this, of course, was to reduce the load on your business and allow you to focus elsewhere on things like product and marketing. Or to prepare the business for sale or full 'automation', by removing its dependence on you entirely, while you enjoy that pina colada.

But to keep things running smoothly, now either you - or at the very least, your business manager - will need to make an ongoing effort to maintain good relations with your new 3PL provider.

Essentially you want your 3PL partners to maintain the standards they first promised you: to pack your orders with a high degree of accuracy, speed, and a low error rate. And then you want them to think highly of you and your business when it next comes to reviewing their customer accounts. If they stop caring about your business, it's your orders that will be packed up by that new temp guy who always prints the wrong shipping label.

You want to be the business that they enjoy working with and are keen to keep around. If the opposite is true, you might find they just deprioritise your account, and even implement a price increase that they know will cause you to leave.

The way you avoid this is by being liked.

How to manage the relationship with your fulfilment partner

The good news is that being liked and maintaining positive relations with your fulfilment partner shouldn't be too onerous. Essentially you just need to do three things: 1) let them get on with it, 2) be reasonable over inevitable mistakes and disagreements, and 3) drop in now and again.

1) Hands off

Fulfilment companies have a job to do. And chances are, they know how to do it just as well, or better, than you do. So beyond the initial setup of your account and specification of your packaging requirements, you need to trust them to get on with it.

By all means, send through some test orders to check you're happy with the way your products are sent, and make sure that all the IT side of things is working properly. You'll inevitably have more contact in the first month or so. But your aim should be to reduce you and your staff's involvement in order management to handling customer queries and passing on those requests.

One of the hardest things when you've launched a successful business is to start letting go. Maybe it was hard enough for you to come to the point where you were willing to outsource your fulfilment operations. Now you've come this far, don't mess it up by insisting on checking on every order.

You have to trust. That means accepting mistakes made by other people - and thereby giving them a chance to learn.

2) Mistakes happen

Things will go wrong. Some order details will go missing and a package won't be sent (you should be able to see a package hasn't been sent through your ecommerce site admin area). Items will sometimes be missing from packages. An address will be incorrect - probably a customer's fault, but possibly a missed opportunity to fix it by the packing staff.

You need to expect these kinds of things, and by all means keep a mental track of how often errors creep in, because some companies are just worse than others on this front. But certainly no fulfilment company is going to be perfect, no matter how sophisticated their technology or focused their staff. A good fulfilment company should quickly recognise and act to correct any mistakes pointed out to them, at their own cost where the error is clearly their fault.

In my experience, the bigger errors worth following up are billing-related. You, or someone who works for you, should be paying close attention to your monthly invoices to make sure there are no unusual spikes in average shipping costs, and that the number of orders you're being charged for is a close match for the number of orders your data says you've received that month.

With one of our fulfilment partners, there was a time when their computer system was sending out some of our items as parcels when they were small enough to go as letters, so we were having to pay far more than we should in postage costs. We also had a situation where the same orders were being charged for in two months. To their credit, in both instances, when it was pointed out to them, they accepted responsibility, calculated the damage and refunded us for the amount over-charged.

Billing errors can be expensive and they are annoying. You absolutely should raise them as soon as you become aware of a problem. But there's no excuse for not calmly pointing out the error and explaining what you think's gone wrong, rather than making accusations and demanding compensation before the fulfilment company's had a chance to investigate and understand the problem for themselves. Once it's explained to them, any company should quickly correct the error and refund you, and if not, then you may have cause for complaint.

The general point here is to always assume 'innocent mistake' (incompetence) rather than malice. If regular incompetence starts to become a problem, it might be time for a more serious conversation regarding the management of your account, or for you to consider moving to a company that doesn't make so many mistakes, but most problems can be sorted out with a bit of attention.

3) You must visit

You, or someone senior within your business, should visit your third party logistics provider on occasion. They're a crucial arm of your operations and they deserve your attention.

You don't need to be down there every week. If the warehouse is in a different country, you might only visit every few years. If it's more local, perhaps you could drop in a couple of times a year as you're passing through town.

Go primarily with the aim of saying hello and having a friendly chat. You might of course have serious business to discuss. A visit is a good chance just to see what's going on, to meet new frontline staff, to hear how the fulfilment company's own business is going, or perhaps to see a new warehouse if they've moved location.

It's on these kinds of drop-in visits that you might first become aware of things that are pushing up your costs, or processes that are making things difficult for the fulfilment warehouse. Any ways to make your business operation more efficient and people's jobs easier are things you want to hear about.

Another benefit of visiting is that you sometimes get to see what other companies in the ecommerce space are doing: your fulfilment partner likely has a number of clients, some of whom may be marketing in an interesting way, or having a lot of success with a new product. This is all useful information that might be applicable in your own business.

Crucially, visiting your fulfilment partner shows that you care. That you're paying attention to your business and to the people on the front line of operations. The reality is, we respect and like those who show an interest in us. Sometimes, just showing up is what counts.

Oh, and a great benefit of visiting, I've found, is you'll often get taken out for lunch or dinner. Chances are, your fulfilment partner knows the best local restaurants: I've enjoyed some great curries in the UK, Mexican in Pennsylvania, and Afghan food in Toronto!

I'd never tried Afghan food before, so it was a pleasure to finally do so on my visit to Canada in early 2020


"It's all about the people," my old boss told me when I was managing staff for London Underground. A truism perhaps, but don't assume this only holds true for people you manage directly. If you get the relationships right with your service providers too, your life will be a lot easier.

When it comes to your third party logistics provider, let them do the job you're paying them for. There's no need for you to be so hands on with operations now. Pay enough attention that you can spot a pattern of mistakes, or pick up any major invoicing errors, but know that mistakes will happen, and that these will be because of simple human error rather than a pre-meditated desire to screw your business over! That will help you fix things in the right way.

After all, who would try to get one over on you, given that you're the one business owner who takes the time to visit and get to know your fulfilment partner?

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