You’ve scaled your marketing, expanded your product line, and demand is accelerating.
But there’s one problem. Your fulfillment partner is starting to show cracks, and its third-party logistics (3PL) services don’t fully cover your needs. Delays, errors, and inefficiencies are quietly eroding margins and negatively impacting the customer experience. Sound familiar?
This is not an uncommon experience for brands shifting from startup to scale-up. And it’s not a failure. In fact, it’s a sign of growth. It signals that business is evolving, and operational infrastructure needs to evolve alongside it.
The real risk? Staying too long with a partner that can’t scale and can’t offer the 3PL services needed to support expanding channels and/or higher operational demand. When that happens, growth stalls under the weight of rising costs, service lapses, and missed opportunities…costing time, money, and even customers. Think: unoptimized packaging costs, mispicks, stockouts, and more.
The good news is that the warning signs are usually pretty clear. When brands know what to look for, they can make a proactive move before fulfillment becomes a liability. Here are five signs it’s time to level up your 3PL.
Sign #1: Fulfillment issues are rising
One of the biggest signs a brand has outgrown its third-party logistics partner? Recurring fulfillment problems.
These issues often start subtly (an occasional mispick or lengthy dock-to-stock), but over time, they add up. Order accuracy begins to drop, inventory management goes haywire, on-time delivery rates decline, and the 3PL struggles to meet agreed-upon SLAs.
From an operational standpoint, this points to a lack of scalable infrastructure. Whether it’s limited automation, inefficient picking strategies, limited 3PL services or network, or labor resourcing issues during peak periods, the root cause is a fulfillment partner that can’t keep pace with growing volume or complexity.
The brand might also notice breakdowns in post-purchase performance metrics. For example, an uptick in WISMO (where is my order?) inquiries or inconsistent packaging/damaged products are all symptomatic of strained operations.
With 32% of all customers saying they’ll leave a brand they love after just one bad experience, these failures are a huge red flag.
Sign #2: Volume has outpaced capacity
In ecommerce, scaling can come fast and furiously. SKUs that were stagnant one week may be firing off the next. Brands are at the mercy of going viral, increasing order volume at the drop of a hat.
This being said, if a third-party logistics provider can’t physically handle higher inventory levels, peak-season spikes, social commerce spikes, or growing SKU count, it’s a clear sign the relationship has hit its limit.
Constrained racking space, increased backlogs, delayed inbound processing, and longer order-to-ship cycles are all tangible signs that a 3PL is struggling to keep up. In some cases, products may even be stored off-site or in overflow trailers, leading to fragmented inventory management/visibility and inefficient pick paths.
The root issue? A 3PL may be operating with the same resources and footprint they had when a brand was shipping hundreds of orders a week, not thousands.
Without the right warehouse space, labor force, or fulfillment technology, they’ll fall behind. And when fulfillment slows down, your ability to meet customer demand (and capitalize on growth opportunities) grinds to a halt.
Brands that are expanding into omnichannel fulfillment, launching new SKUs, or entering new markets need a partner and 3PL services that can flex up and down proactively.
Sign #3: Costs are rising, but service stays the same
One of the more frustrating signs a brand has outgrown its 3PL services is when costs rise, but service doesn’t. As a business scales, a fulfillment partner should reward growth with better pricing, improved efficiency, and more favorable terms. If instead you’re seeing cost per order (CPO) increase, line-item fees stack up, or shipping costs remain flat despite negotiated carrier rates, it’s time to make a change. In many cases, this comes from a 3PL that hasn’t optimized its operations or pricing to support mid-market or enterprise volume.
Common red flags include:
- One-size-fits-all pricing/no customization
- Unexplained surcharges during peak periods
- High minimums despite consistent order flow
On the other hand, green flags from a fulfillment partner with scalable services include:
- Expansive fulfillment network: A multi-node network enables faster, more affordable shipping to key customer regions
- Value-added services: Proven expertise in kitting, bundling, custom packaging, subscription box assembly, returns processing, and more
- Integrated transportation management: Access to better carrier rates, optimized last-mile delivery, and end-to-end shipment visibility
- Flexible warehousing capacity: Ability to scale up or down during peak seasons or rapid growth periods
- Real-time inventory visibility: Centralized systems that support forecasting, stock optimization, and channel-level insights
- B2B + DTC flexibility: Infrastructure and workflows that keep wholesale, retail, and ecommerce fulfillment under one roof
- Hands-on operational support: Strategic account management, exception handling, and proactive communication
Sign #4: There’s a consistent communication breakdown
As your business scales, a fulfillment partner should be more communicative than ever before. If a brand has to consistently follow up on order questions, track down missed inventory, or escalate issues, it’s a sign that its 3PL can no longer support its operations.
What starts as minor friction, like slow responses, lack of visibility, or unclear accountability, quickly turns into operational gaps. Internal teams start spending more time managing their 3PL than focusing on customers or strategic initiatives.
Whether it’s a missing escalation path, limited access to real-time data, or a reactive support model, the result is the same: misalignment, delays, and frustration.
Sign #5: You need more than just fulfillment
As a brand matures, fulfillment becomes just one part of a much larger operational puzzle. Expanding operations from DTC to retail. Exploring global markets. Diversifying carrier mix. Shifting to multi-node fulfillment. These are only a few of the projects that come along with growth.
High-growth omnichannel brands need a strategic partner who can help navigate inventory planning, demand forecasting, channel expansion, and supply chain management. A transactional 3PL will struggle to meet those demands, whereas a strategic partner will help plan for them.
If your 3PL services are limited to basic pick-pack-ship services with little flexibility or insight beyond the warehouse floor, you’ve likely outgrown their model.
Outgrowing your 3PL? It’s a good thing.
While growth is certainly a good thing for up-and-coming brands, it brings unique complexity: more orders, more SKUs, more channels, and higher customer expectations.
A fulfillment partner that was the perfect fit for a brand at $1M in revenue might not be the right fit at $10M. When brands stay too long with a fulfillment partner that’s no longer built to support them, costs pile up, customers churn, and teams burn out.
Recognizing the signs early (and making a proactive move!) can protect margins while enabling the next phase of scale. Growth doesn’t slow down for fulfillment. Neither should your 3PL.
How Kase supported 300% growth for beauty brand Kulfi
As a rapidly growing beauty brand, Kulfi needed real-time inventory visibility, operational flexibility, and supply chain operations that could keep pace as their business scaled. With Kase, they achieved 300% growth without compromising accuracy, service, or speed.
Read the full case study here: https://kase.com/customer-stories/kulfi-case-study/
Is it time to rethink your 3PL services?
With the right partner, a brand won’t have to think about every detail of fulfillment. They’ll be able to focus more on business growth vs 3PL services.
If you’re seeing any of the above signs, it may be time to reassess your 3PL relationship. Outgrowing your fulfillment partner is a signal that your brand is ready for its next stage of growth. The key is having a partner who can scale with you, not hold you back.
At Kase, we work with brands that are building for long-term success. If you’re ready for a fulfillment partner that evolves with your business, let’s talk.
