One of the most important components in business in regards to e-commerce in Thailand is Third-party logistics (3PL) companies. These companies provide other businesses with outsourced logistics and supply chain management. 3PL firms can offer a single service, such as delivery or warehousing, or a full-service system. 3PL services can be of various types, such as ones that ensure your product is delivered locally or internationally, or warehousing-specific ones, that handle the storage management and distribution of your inventory to customers.
Why Do Companies Opt To Go For 3PL?
There are several reasons why e-commerce Thailand companies go for 3PL to carry out their business. Some of them are as follows:
Working with a 3PL provider allows e-commerce businesses to outsource all order fulfilment tasks, including:
- Product order lists for inventory management
- Order picking and packing
- Shipping orders
In addition to freeing up time to help you focus on more important business tasks is a good goal in and of itself, a qualified 3PL firm can also benefit you in a variety of other ways. For example,
Let’s say your product requires a unique type of packaging, or you want to customize your packaging. This is where 3PL steps in and takes care of both packaging and customizing. That works even if you want to run customized campaigns or promotions, offer giveaways or product samples, or bundle orders. 3PL can handle all kinds of business requirements.
As your e-commerce Thailand company expands, the demands become more complex. If your demand increases rapidly, you need to know that your 3PL has the capacity to handle a higher volume.
You can truly begin to streamline your supply chain with the help of a third-party logistics partner. Among the many advantages are standardized shipping times and enhanced stock management. SLAs direct the work of the 3PL partner, which allows you to rely on the timely completion of things.
The simplest way to carry out cross-border operations in e-commerce Thailand is to store your goods in storage centers like warehouses, distribution centers or fulfillment centers as close as possible to your customers’ locations.
Use the data and insights gained from your collaboration to make more informed decisions. For example, the data you gather can show you all the details regarding the shipment of the products, allowing you to make better decisions about inventory levels and item availability across your warehouse network.
- Resource Network
Third-party logistics providers associated with e-commerce Thailand, like in-house supply chains, have a vast resource network. Supply chains can expand quickly, efficiently, and cost-effectively using the 3PL provider network.
- Market development
The benefit of using a third-party logistics provider is Having access to distribution centers and warehouses in different regions allows businesses to expand into new markets by being able to ship goods efficiently to any location on the planet.
Myths and Misconceptions Around 3PL
You should have a good working knowledge of a 3PL and the benefits of outsourcing fulfillment by now. Unfortunately, many myths about third-party logistics prevent brands from teaming up with a 3PL. Let’s disprove the most common ones:
Myth Number 1: A fulfillment center is only used for storage.
In addition to product storage, 3PL providers provide a wide range of other services. This means that e-commerce Thailand warehousing is among many services a 3PL’s fulfillment center provides.
A 3PL provider may also provide the following additional services:
- Storage of the product or its components
- Product kitting and assembly
- Performing quality assurance checks
- Order picking and packing
- Labeling the shipment order
- Using couriers or delivery services to ship products
- Sending Orders
- Handling Customer Returns
Myth Number 2: Receiving orders is prioritized rather than completing them.
Although it is imperative for every company to boost their marketing strategy and receive orders in bulk, it is also important to work out a smooth and hassle-free e-commerce delivery process. On the other hand, many small and new companies believe that a solid product is all they need to succeed.
A bad shipping experience, on the other hand, can ruin your relationship with your customers. This is where third-party logistics providers come in with a cost-effective and fully optimized approach. 3PL firms help you strengthen customer trust, brand name and revenue by providing a delightful fulfillment experience.
Myth Number 3: A 3PL service provider cannot comprehend your company’s requirements.
This is a subjective topic, and assuming that a service provider will not be able to understand your requirements may prevent you from partnering with a 3PL provider and make your work easier. An established 3PL will listen to your needs and develop a unique solution for your company.
Furthermore, many 3PL companies specialize in working with specific sectors. Some cannot, for example, work with frozen, refrigerated, or temperature-regulated items. Other 3PL providers, on the other hand, may only deal with consumer products. As a result, when you select a provider, you gain superior insight and expertise that solve your unique business needs.
Myth 4: A 3PL can degrade customer service quality.
The truth, however, is that any blunder of any kind can turn customer service into a disaster. Inexperience can increase the possibility of error. As a result, this depends on the 3PL provider with whom you collaborate. If you work with a firm that lacks the needed skills and experience, your customer service will undoubtedly suffer. Ideally, you should assess the 3PL service provider’s customer service by communicating with your customers and setting clear expectations throughout the e-commerce order fulfillment process.
Furthermore, a good 3PL will ship orders faster by distributing your inventory across the country while maintaining high order accuracy. As a result, a 3PL provider who does their job well will always improve the customer experience.
Myth 5: 3PLs necessitate long-term commitments.
This myth may be partially correct because several 3PL providers require a one-year commitment to getting started. Other 3PL providers, on the other hand, do not have such stringent requirements and will gladly provide fulfillment services temporarily, seasonally, or monthly.
Myth 6: Working with a 3PL means giving up control of your e-commerce operations.
E-commerce owners worry that outsourcing their fulfillment will cause them to lose sight of their product and control over their e-commerce fulfillment. However, the truth is quite the opposite. 3PL providers provide increased control and visibility into the supply chain.
Through real-time updates across all sales channels, tech-enabled 3PL providers maintain complete visibility of your inventory levels. Furthermore, they provide you with access to actionable dashboards that provide key insights such as:
- View inventory and orders in real-time
- Forecasting inventory replenishment
- To plan inventory splits, use zone-based sales data.
- Sales performance reports for identifying aspects of product development.
Advantages of Choosing a 3PL
Thailand’s e-commerce companies can benefit in various ways by outsourcing their logistical and supply chain requirements to value-added 3PL.
- Resource network:
3PLs can take advantage of connections and volume discounts, which leads to lower overhead and the quickest service. Your business can take advantage of resources that are not available internally by selecting a 3PL supplier.
- Saving time and money:
It is another benefit of outsourcing logistics for your business. Using a 3PL provider can avoid spending money on employees, technology, transportation, and warehouse space as part of the logistics process. By helping your company develop a logistical network with less risk and more success, 3PL suppliers may help you avoid making expensive mistakes.
- Ongoing industry expertise:
By outsourcing logistics, e-commerce Thailand businesses may concentrate on their core skills while leaving the rest to the professionals. Using 3PL services, you can rest easily knowing that dependable, seasoned specialists meet your logistical requirements. Partnering with a 3PL company nullifies the risk of logistical errors. This lets organizations focus on other vital back-end and front-end operations like sales and marketing.
- Scalability and flexibility:
Using a 3PL allows your Thailand e-commerce company to expand into new areas without facing any obstacles. A 3PL supplier can help you scale as you grow because they have the capacity to facilitate expansion into new markets with ease.
- Constant improvement:
3PL experts will meet your needs by employing the quickest, most cost-effective, and most efficient techniques. A 3PL provider has the resources to redesign the supply chain and may use technology to guarantee that the right quantity of goods arrives whenever you need them.
- Flexible payment gateways
3PL providers are diverse in terms of the payment gateways on the customer’s end. More often than not, customers go through all the processes of “adding to cart” but stop short of ordering on the payment page. This is due to insufficient payment gateway options. Most 3PLs manage payments in all modes ranging from Cash on Delivery (COD), net banking, online wallet payment, and Credit/Debit cards. These ultimately boost sales, brand recognition, and customer satisfaction.
Disadvantages of Choosing a 3PL
The following are a few drawbacks of using a 3PL for e-commerce Thailand businesses:
- Lesser control over the delivery procedure:
When a third party handles your shipment, there may be difficulties if there are delays or other issues transporting a customer’s item. Instead of your 3PL, the customer will turn to you for the solution.
- Larger upfront investment:
On the other hand, while using a 3PL can save you money over time, the initial outlay may be substantial. The price of a 3PL may be unaffordable if you don’t require a large warehouse or don’t receive enough orders.
- More distance between you and your product:
Suppose you run into quality control concerns or need to examine your stock for whatever reason personally. In that case, the 3PL you choose for your e-commerce Thailand business can place you far from your items, which would be inconvenient.
Giving another person control over your strategic operations indicates that you should assume a huge amount of responsibility. Each association needs a solid framework to function well and produce excellent financial outcomes. When you rely on a 3PL provider, you cede control of your logistical operations to them. This increases your dependency on them.
Factors to Consider While Choosing a 3PL
Let’s examine the crucial factors to take into account when looking for a 3PL:
A big 3PL will have a lot of staff and be able to handle sudden orders coming in en masse during the busiest holiday seasons. The drawback is that these businesses will treat you like a number, no one will be in charge of your stuff, and you will lose that personalized touch. However, while small 3PLs will be intimately familiar with you and your products, they might not always be able to assist you or control your order volume at busy times of the year.
It is the second most important factor to consider while selecting a 3PL. To check out your inventory when necessary, you should first look for a 3PL nearby so that you can physically travel there. Additionally, location is important since you want to choose a 3PL that is as close as you can get to your typical consumers. Therefore, it is not a good idea to choose a 3PL that is located quite far from your clients.
How fast do 3PLs truly ship your items? Every 3PL will promise you one handling time, but in reality, that’s wonderful and all, except for when it’s busy and it takes two or three days. To push them further, you should ask them how their order processing times differ during off-peak and peak periods.
Assessing how well your 3PL’s integration with existing systems will work for your e-commerce organization is critical. They only ask you to send in a pdf of your invoices and orders because they don’t have any integrations. Depending on your level of sophistication, this may or may not be the best option for you.
A company that doesn’t know how to charge you will actually raise some red flags regarding efficiency and dependability. Therefore, you want to discover a 3PL that does. Because of this, hiring a 3PL will result in various costs, from labeling fees to storage fees.
- Bringing Logistics in House:
You can give the product as much personal attention as you like because you are handling it, and you can adjust for peak demand. You can also hire more staff if necessary, though the costs may be higher. But occasionally, there is no other option but to bring logistics in-house, or at the very least, to bring logistics in-house partially.
Why is Locad the Best 3PL for Your E-commerce Business?
Locad integrates warehouses, logistics and technology into one entity for you to manage your supply chain operations.. You may ship orders to clients quickly and within 24 hours with the help of Locad. You get significant advantages such as :
- Configurable warehouse
This allows you to flexibly scale your inventory and pay only for the storage you really utilize.
- Courier interfaces
Helps you establish connections with the domestic and international couriers you already have faith in.
- United e-commerce
Achieve inventory consolidation across all of your stores, markets, and sales channels.
- Real-time insights
To help your Thailand business expand, you can examine what sells and what could use a little help
- One day, pick and pack
Make use of a network of fulfillment facilities spread out over the Asia-Pacific area.
- Expand internationally
The choosing and packing of all your orders will be taken care of by experts.
Locad has operations in a number of Asia-Pacific nations in order to interact with international shipping alternatives for your clients wherever they may be. Locad takes logistics to the next level of speed, performance, and efficiency.
A 3PL essentially provides inbound and outbound logistics services. When an e-commerce company collaborates with a 3PL, the 3PL company handles shipping orders straight from the fulfillment center. Even in areas where you don’t have sufficient skills, 3PL can add significant value to your e-commerce business.