If you’re reading this, you’ve probably already decided to switch 3PL fulfillment companies. Maybe you’re frustrated with poor performance at your current 3PL, or maybe they just can’t keep up with your growth. Maybe you’ve already been looking around for a new fulfillment provider, or maybe you’ve already found the perfect partner to take your eCommerce business to next-level growth. Now, you ask, what’s next? How do you move your inventory from one distribution center to another without losing any of it, upsetting your customers, or losing revenue?
Your new 3PL will know exactly what to do to smoothly guide you through the process. Every migration is different because every eCommerce company is different, but the average migration takes 1-2 months. For larger businesses with more systems, and therefore more integrations, the process usually takes a little longer. Here is a checklist that covers the basic steps for migrating your inventory to a new 3PL warehouse and distribution center:
- Exit Your Current 3PL
It may seem obvious, but be sure to review your current 3PL fulfillment company’s contract and closing agreement terms. This will help you better estimate the timeline and costs involved with transitioning your business away from the current provider.
- Assemble an In-House Team
Designate a point person and 2-3 others to help. This gives your new 3PL a clear point of contact for all communications regarding the migration. This team will also be responsible for managing expectations in-house.
- Discuss Needs with New 3PL
Your new 3PL will want to learn as much about your business and service expectations as possible. From the number of SKUs to storage requirements, sales peaks and seasonality, custom packaging and how to handle returns, they’ll want to know everything.
- Establish Service Agreement with New 3PL
Your contract should include a Statement of Work, pricing, and agreed upon standards for receiving, fulfillment speed, accuracy, returns, and KPIs. All expectations, liabilities, and methods of restitution should be clearly stated.
- Begin Technology Integrations
Not your area of expertise? Not to worry, your new 3PL will handle this step with input from your IT and web development teams, of course.
- Decide on A Migration Strategy
Most DTC eCommerce brands choose one of three strategies for migrating inventory from one fulfillment company to another, depending on the number of SKUs, timeline, and budget. If you choose to stagger your inventory move, your new 3PL will work with you to avoid duplication of orders.
- Decide on Inventory Location(s)
If you opt to store inventory and fulfill orders from multiple warehouse locations, your eCommerce platform or related marketplaces might have a function to assist you with product assignments. Product assignments allow you to designate specific products to specific distribution center locations so orders can be routed to the correct place for fulfillment.
- Create Account with New 3PL Warehouse Management System (WMS)
This software platform will be your portal for onboarding, receiving, managing inventory, tracking orders, and reporting.
- Upload Product Data into New WMS
Depending on the system and number of SKUs, the data can be loaded individually or en masse via a customized spreadsheet.
- Communicate New 3PL’s Receiving Guidelines
To ensure a smooth transfer of inventory, your former 3PL will need to follow the receiving guidelines set forth by your new 3PL when packing, labeling, and shipping the inventory. Ignoring these guidelines can cause costly delays in receiving. If tensions are high, your new 3PL may also be able to arrange inventory pick-up rather than relying on your former 3PL to manage shipping.
Once your inventory reaches its new home, it’s only a matter of days before your new 3PL begins fulfilling orders. Meanwhile, your team can get up to speed on the new system for managing inventory, tracking, and reporting. If you chose the right fulfillment company with prioritized technology in your search, you’ll be amazed by how easy the new system is and how smooth your migration went!
