In today’s competitive Malaysian e-commerce landscape, efficient fulfilment is of greatest importance to customer satisfaction and business growth.
In fact, an efficient order fulfilment process gets products into customers’ hands faster. This quicker turnaround time can lead to increased sales and revenue for your business. Owing to this, many businesses initially outsource logistics to third-party logistics providers (3PLs) attracted by the promise of streamlined operations.
Nevertheless, as your business scales, a “one-size-fits-all” 3PL approach can create bottlenecks. These generic solutions may not adapt to your evolving needs, jeopardising your ability to meet customer demands and scale effectively.
The Problem: Limitations of a One-Size-Fits-All 3PL
While a basic 3PL might have sufficed for your initial operations, its limitations can become glaring as your e-commerce business flourishes. Here’s how a “one-size-fits-all” approach can hinder your growth.
#1. Inability to Handle Increasing Order Volume
Imagine your brand experiences a significant rise in demand due to a successful marketing campaign. This immediately translates to a surge in orders.
A basic 3PL provider’s infrastructure may not be equipped to handle this influx. Picking, packing, and shipping times can escalate, leading to customer dissatisfaction and a potential decline in positive online reviews.
A study revealed that despite disruptions like pandemics, and economic crises, customer expectations for fast delivery remain high, with over half (52%) of consumers expecting their orders within just 2-3 days.
#2. Lack of Nationwide Coverage
Perhaps your business has cultivated a strong regional following in the country, 3PL without extensive nationwide warehousing could impede your efforts to capture a larger market share.
#3. Limited Tracking Visibility
In today’s digital age, 90% of customers expect real-time visibility into the whereabouts of their orders. A 3PL without transparent tracking can frustrate customers and damage your brand reputation.
💡 Did you know? Even in 2024, Ninja Van remains one of the leading 3PL service providers in Malaysia that offers “real-time tracking” feature for all of its services, including inventory restocking service via Ninja Restock.
#4. Inability to Support Cross-Border Deliveries
Let’s say your goal is to take your products global. A basic 3PL provider may not handle international shipping—ship sinking, hijacking, or cargo damage. This can be a significant hurdle to overcome if you aim to expand your market reach.
5 Signs Your Business Needs Scalable 3PL Solutions
Having identified the limitations of a “one-size-fits-all” 3PL approach, how can you determine if your business has outgrown its current provider? Here are 5 key indicators that necessitate a scalable 3PL solution.
Sign #1: Sales Outpacing Fulfilment Capabilities
A surge in sales, driven by a successful product launch or marketing campaign, is a positive sign for any business. However, this growth can expose the limitations of a rudimentary 3PL provider. In such instances, you may experience:
- Order fulfilment bottlenecks: Backlogs and delays in picking, packing, and shipping can arise if your 3PL’s infrastructure lacks the capacity to handle increased order volume.
- Inventory management challenges: Limited warehouse space can lead to inefficiencies in inventory control and stockouts.
- Potential reputational damage: Increased fulfilment errors can negatively impact customer satisfaction and brand perception.
If your current 3PL provider does not proactively address these concerns, they can dynamically affect your growth trajectory, limiting you order fulfilment during peak seasons and interrupting your sales initiatives.
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Sign #2: National Expansion Roadblocks
The ambition to transform your business into a national brand requires a robust logistics network. It is further strengthened when a study was done to prove that logistics service providers face challenges due to intricate logistics networks and limited resources.
Limited warehouse presence can act as a significant barrier to national expansion. Here’s how a geographically restricted network can hinder your growth:
- Protracted delivery times: Customers in distant locations may experience extended wait times for their orders, negatively impacting their satisfaction.
- Elevated shipping costs: Reliance on long-distance deliveries can significantly inflate your shipping expenditure.
- Competitive disadvantage: Established national brands with efficient delivery networks can overshadow your business if you cannot offer comparable delivery speeds.
Nationwide footprint is what enables you to deliver your products to customers throughout the country with expediency. However, without such a facility, you are less likely to grant a competitive edge towards national expansion.
Sign #3: Customer Inquiries Dominated by “Where’s My Order?”
In the contemporary digital era, real-time access to order tracking information is a fundamental customer expectation. Insufficient or stale tracking information can alienate customers. Here’s how a lack of track and trace visibility can impede your business growth:
- Surge in customer service inquiries: Customers left in the dark regarding their order status may bombard your customer service team with inquiries.
- Negative online reviews: Frustration with delivery uncertainty can translate into negative customer reviews, damaging your brand reputation.
- Perception of unreliability: Inconsistent or absent tracking information can foster a perception of unreliability, potentially deterring future purchases.
To elevate things, all businesses should prioritise investment in advanced tracking systems. These must-have systems are what empowers you to offer your customers peace of mind and fosters trust—ultimately, cultivate customer loyalty and long-term brand success.
Sign #4: International Expansion Feels Like a Hurdle You Can’t Jump
E-commerce has transformed the global marketplace, making it easier for businesses to reach international customers. Online shopping exploded in 2020 with over 2 billion buyers and global e-commerce sales skyrocketing past $4.2 trillion. This surge represents a major leap, with e-commerce’s share of global retail sales nearly tripling from 2015 to 17.8%. The trend is expected to keep climbing, reaching an estimated 21% by 2022 and 24.5% by 2025.
However, with the lack of expertise in international shipping, it can significantly impede your global expansion plans. Here’s how a non-scalable solution hinders your cross-border shipping:
- Unfamiliarity with complex customs regulations: Without a 3PL partner experienced in handling international shipping documentation and procedures, your products may face delays or even get blocked at customs.
- Limited carrier network: A 3PL with a domestic focus may not have established relationships with international carriers—which limits your shipping options. Potentially, leading to higher shipping costs and longer delivery times for your international customers.
- Inability to offer competitive international shipping rates: Without access to economies of scale and established partnerships with international carriers, a non-scalable 3PL may struggle to offer competitive shipping rates.
Sign #5: Feeling Stuck in a Stagnant Partnership
The ideal 3PL provider should function as an extension of your business or e-commerce. It should adapt and grow alongside your strategic goals. But, if you feel increasingly limited by your current 3PL solution, it’s a strong indication that you may have outgrown their capabilities.
Here’s how an inflexible 3PL partnership can hinder your success:
- Limited service scalability: A lack of scalability in service offerings can restrict your ability to implement innovative fulfilment solutions.
- Inability to adapt to changing customer demands: As customer expectations regarding delivery speed and convenience evolve, a rigid 3PL provider may struggle to keep pace.
- Frustrating lack of flexibility: A successful partnership thrives on clear communication and a willingness to adapt to your specific needs. If your 3PL is unresponsive or inflexible in accommodating your evolving requirements, it’s time to consider a more collaborative solution.
The perfect balance should be a partnership that offers a flexible and adaptable approach. 3PL services should tailor their solutions to your unique needs and growth trajectory, whilst you focus on core business activities.
The Solution: Finding the Right Scalable 3PL Partner
Having identified the signs that your e-commerce business needs a scalable 3PL solution, the next crucial step is selecting the ideal partner to propel your growth. To empower you in this decision-making process, we’ve developed a comprehensive White Paper titled: “From shelves to shoppers: The art of seamless logistics”.
This valuable resource features a meticulously curated checklist that guides you in evaluating potential 3PL providers based on the critical factors for successful national and international expansion. The checklist focuses on identifying 3PL partners that offer:
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Ready to unlock the potential of a scalable 3PL partnership for your business?
Download your FREE copy of the White Paper today HERE and gain access to this valuable resource that empowers you to find the perfect 3PL partner to support your national and international ambitions.
