Top 7 Reasons Fulfillment Outsourcing Deals Fail

Selecting A Provider

  1. Choosing Your Fulfillment Provider Solely on Price – The cliché “You get what you paid for” can have drastic effects if you choose to outsource fulfillment. Basing a decision on price alone ignores a company’s skills, experience, and actual competency at doing their job.

While you may be saving pennies on the dollar in the initial stages of product fulfillment, the errors that company may make can drive up costs on the back end including:

  • Time lost with customer service issues
  • The costs of return shipping and re-shipping inventory
  • Associated, increased labor costs

Also consider the potential loss of customers due to poor customer service and negative reviews. Be wary of choosing a low-cost solution and contending with continual errors and problems that need to be addressed.

  1. Not Allowing Enough Time for Responses to Bid Requests – You wouldn’t want your fulfillment solution to rush its process of managing your company’s inventory; If your company wants quality service, you should let the suitors prepare and provide a quality bid.The best fulfillment providers want to invest the time, effort, and thought to submit their most innovative and accurate proposal. Without the proper time to sort out the details and nuance of a project, assumptions and guesses will be made to try and acclimate to the timeline of your company’s deadline. What happens if the scope of the actual work drastically changes?

    Do we blame the provider for changing their price when your bid request isn’t what it was originally? Give your fulfillment outsourcing partners an opportunity to demonstrate their skill and expertise in their field. Carefully plan your bid request and give a sufficient timeframe for responses.

Planning for Implementation

  1. Not Including Your Fulfillment Provider in Early Discussions and Planning Sessions – Your partnership with a fulfillment provider is only as effective as you allow it to be. Take the time early on to thoughtfully plan out strategy for the entire length of the partnership.

Being able to spot early opportunities can help extract the best out of your fulfillment partner. When we understand the entirety of a firm’s operations, supply chain, and fulfillment process, costs can be reduced, shipments made more accurately, and efficiency increased as a whole.


  1. Setting Unclear or Unreasonable Expectations – Mistakes are inevitable in the fulfillment process, especially when people are involved. Being able to understand the causes of those mistakes and being able to adjust is the key to staying consistent.Setting clearly defined and reasonable expectations along with a set of KPI’s (Key Performance Indicators) can help keep you and your product fulfillment partner on the same page: solving your logistical needs.

    Managing After Start-up

  2. Not Sharing Pertinent DataSafekeeping the important information for your business may be a quality competitive strategy, but it’s also a potential threat to your fulfillment operations and strategy.Not sharing/Sharing? (This section is unclear whether sharing or not sharing is the intent) vital information that is pertinent to a fulfillment partner’s operation such as SKU lists and lot codes can save a lot of headaches later. Saying, “You’re hired, now go do it” doesn’t really benefit either party. Fulfillment partners engage in operations across a variety of customers and fields, so trust them to utilize your data in your best interest.


  1. Overlooking KPIs, Regular Meetings, and Critical Checkpoints – Don’t simply dump your fulfillment needs onto a fulfillment provider and walk away. Trust and blind trust are two completely different concepts when it comes to working with your fulfillment partner.Both the shipper and provider need to be aligned on KPIs and expectations for the entire fulfillment process. Agree on key statistical measures that matter and directly impact performance and set up routine meetings to review the current progress. Utilizing a fulfillment partner is not a dump-and-run business partnership, it’s a symbiotic relationship that can make operations smooth and efficient.
  2. Not Communicating Volume Fluctuations and Forecasts with Your Fulfillment Provider – If you don’t share your sales and inventory-related projections, both you and your fulfillment provider can be caught extremely off-guard with random spikes and lulls in volume.Planning out and relaying these forecasts and their changes simply allows your fulfillment provider to be better prepared. Extraneous labor costs and shipping errors can be avoided simply by ensuring a strong channel of communication on what the future holds.

    Usually, a few days’ notice gives your fulfillment partner ample time to adjust their strategy to accommodate a new forecast.

Fulfillment Outsourcing: Closing Tips for Success

  • Be thorough in choosing the fulfillment partner that’s right for your needs (specifically capability and unity). Don’t rush a decision that significantly impacts your business.
  • Trust your fulfillment partner’s expertise to optimize your fulfillment process.
  • Stay in regular communication on changes, KPIs and future volume forecasts, don’t surprise your fulfillment partners.


Want a personalized consultation to discover what 3PL solutions can do for your business? Contact PFS today!