As your business grows, there may come a point when your in-house shipping feels like a black hole sucking up time and resources. In eCommerce, where fast and dependable deliveries reign supreme, well-oiled eCommerce logistics are imperative for a thriving business.

Popular alternatives like a 3PL (third-party logistics provider) or FBA (Fulfillment by Amazon) are attractive due to their convenience and expertise, but there are potential pitfalls you need to be aware of before shifting your fulfillment responsibilities to an outside service.

To support a smooth transition, this article will guide you through the intricacies of revamping your eCommerce logistics setup. We’ll explore the inherent risks involved and equip you with strategies to navigate them successfully.

Approaches to eCommerce logistics

Your eCommerce logistics are the backbone of your online store, determining how you move your products from point A (often a manufacturer) to point B (your happy customer). The process involves everything from warehousing and inventory management to picking and packing orders, then shipping them efficiently.

eCommerce brands typically adopt one of the following approaches to logistics:

• In-house fulfillment: You manage everything yourself, from storing inventory to fulfilling and shipping out orders.
• 3PL: You outsource some or all of your fulfillment operations to a specialized company. They handle storage, picking and packing, and potentially even shipping for you.
• FBA: You leverage Amazon’s massive fulfillment network to store your products in their warehouses. They then pick, pack, and ship your orders directly to customers, often with faster Prime delivery options.

The best choice between these setups depends on your business size, order volume, and growth goals. Each option has its advantages and disadvantages, which we’ll explore further below.

Common eCommerce logistic transitions

Here are some of the most frequent eCommerce logistic shifts businesses make, along with the potential challenges involved:

• From in-house to 3PL: This is a popular jump for businesses looking to scale or streamline operations. However, it takes time to find the right 3PL partner, and ensuring smooth inventory handover and integration is a significant obstacle during the transition.
• Switching 3PLs: Maybe your current provider is no longer the perfect fit. While a new partner can boost efficiency, navigating complex contract terminations, data migration between systems, and potential fulfillment disruptions require careful planning.
• Integrating FBA prep: Amazon’s fulfillment network is tempting due to its extensive reach and hands-off approach, but integrating FBA prep into your existing workflow can be difficult. If you add FBA prep as another responsibility under your existing manufacturer or 3PL you risk mistakes and delays that come from a lack of expertise.

The nuances of FBA prep

3PLs range in specificity, and while a catch-all provider might seem like a convenient solution for your eCommerce logistics, it can be a risky choice, especially for FBA prep. Amazon shipments require a nuanced understanding of the marketplace’s intricate rules beyond basic warehousing and fulfillment. As such, generic 3PLs may offer a broad scope of services like warehousing, transportation, and fulfillment but can lack the depth of knowledge necessary for FBA.

Seamless operations within the program also entail adherence to precise packaging guidelines, specific labeling standards, and Amazon’s unique shipping protocols:

• Packaging precision: Amazon has strict guidelines for packaging materials, dimensions, and weight limitations. Incorrect specifications can result in rejected shipments, delays, and even seller account suspension.
• Labeling language: Proper labeling is crucial for uninterrupted FBA processing. This includes clear product identification, barcodes, and compliance markings. If your 3PL is unfamiliar with Amazon’s specific labeling formats and regulations, it can incur delays or additional costs for re-labeling.
• Compliance challenges: Failure to meet the FBA program’s prep specifications can also trigger a chain reaction of problems. Shipments could be delayed or even rejected, non-compliant packaging may lead to product returns, and, in the worst-case scenario, your Amazon seller account could be suspended.

All of these issues translate to lost sales, frustrated customers, and a damaged seller reputation. A specialized 3PL with proven experience in FBA prep can save you headache and ensure your products reach Amazon’s fulfillment centers without hassle.

Don’t settle for a one-size-fits-all service. Ask us how MyFBAPrep can handle the specifics of FBA and keep your eCommerce business running flawlessly.

Don’t overload your current supply chain

When changing your eCommerce logistics, a critical risk to watch for is overburdening your current supply chain. This happens when your existing partners — warehouses, carriers, 3PLs, manufacturers, and co-packers — are stretched beyond their capacity to handle new demands.

Think of it like overloading a circuit — pushing past their capabilities can lead to a domino effect of problems:

• Strained capabilities: Imagine a warehouse optimized for smaller volumes suddenly faces a surge in inventory. They’d struggle to keep up, leading to delays in finding and picking items that, in turn, would slow down order fulfillment.

Similarly, a manufacturer accustomed to smaller batches might face production errors or missed deadlines if forced to ramp up quickly.

• The ripple effect on efficiency: When partners are overloaded, it creates a ripple effect throughout the entire supply chain. Warehouses contending with high volumes could make picking mistakes, carriers swamped with international shipments are liable to experience delays, and manufacturers under pressure might produce defective items. That all translates to operational inefficiencies that can significantly impact your business.

Evaluating eCommerce logistics risks before making a switch

Adjusting your eCommerce logistics setup can be a powerful way to optimize your operations. However, any significant change comes with potential risks, so you must plan carefully to sidestep these pitfalls. Be sure to:

• Assess capabilities: The success of your logistical shift hinges on reliable partners. Don’t be tempted by the cheapest option; invest time in researching potential providers, especially new 3PLs or FBA prep services. Gauge their experience regarding your specific needs, such as product type and order volume. Most importantly, verify their capacity to handle your projected growth. Can they scale up efficiently as your business expands?
• Empower your existing network: Give your current partners fair consideration as well. Evaluate their ability to adapt to your necessary changes. Can your warehouse handle a potential surge in inventory? Are your carriers equipped for new shipping needs, such as international expansion?

Be prepared to adjust your approach. If necessary, renegotiate contracts with existing partners to accommodate your extra demands. Consider finding additional partners to supplement your existing network. Most importantly, phase in the switch gradually to avoid overloading your current system.

Phased transition

A logistical transition is like a complex recipe — you wouldn’t throw in all the ingredients at once! By implementing the new setup in stages, you can identify and address potential problems before they snowball, thus reducing headaches.

Start with a pilot program

Implement the new setup using a limited portion of your product line or a certain geographic region. This allows you to test processes, identify glitches in communication or integrations between old and new systems, and refine your approach before a full-scale rollout.

Treat any hiccups as valuable learning experiences that can prevent more significant issues down the road.

Staggered implementation

After you’ve tested the waters, expand your pilot program to phase in the transition geographically or by product category. That minimizes the disruption to your overall operations and supports a smoother integration into your existing systems.

For instance, you could start by switching fulfillment for a specific product category in a particular region. Then, once it’s running smoothly, you could gradually expand to other regions or product lines. This measured approach allows you to course-correct and fine-tune the process as you go.

Clear communication

Keep all stakeholders, including your team, customers, and existing partners, informed throughout the transition. Open communication helps manage expectations and cut confusion:

• Explain upcoming changes to your team and provide training, if necessary.
• Notify your customers about potential delays or adjustments during the transition.
• Ensure clear communication with existing partners to avoid misunderstandings or disruptions in their services.

Navigating regulations

If you opt to integrate FBA prep, ensure your chosen provider understands Amazon’s strict packaging, labeling, and shipping guidelines. Non-compliance can cause shipment delays, product returns, and even account suspension.

Stay informed about relevant regulations impacting your industry, such as customs requirements for international shipping or proper handling of hazardous materials. Find partners who are well versed in these rules to avoid legal and logistical roadblocks.

Wrapping up — Switch your eCommerce logistics setup safely

Altering your logistics in eCommerce is a complex endeavor that comes with inherent risks. However, you can overcome these challenges with strategic planning and a thorough risk assessment. Researching specialized partners, particularly for FBA prep, and not overloading your current supply chain are also critical steps in this process. As you consider switching your fulfillment setup, evaluate your current operations and the long-term benefits of contracting with specialized partners. A logistical adjustment can enhance efficiency, compliance, and customer satisfaction, all of which support your eCommerce business’s continued success.