Logistics is the backbone of success for your e-commerce business, ensuring speedy, cost-friendly, and efficient fulfillment of orders. China 3PL companies offer logistics services, freeing you to concentrate on other business areas.
China is a major manufacturing hub with products in demand for quality and affordability. Suppose you source products for your e-commerce business from China. In that case, using a China 3PL company for fulfillment makes excellent sense.
Though many good 3PL companies in China offer several services, not all are the best fit for your e-commerce fulfillment needs. Indeed, picking the wrong company, or service, may cost you more time and money.
This article educates you on the services offered by China 3PL providers and the factors to consider in picking one. You will also learn the best way to leverage these services in your favor.
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Part 1. What is China 3PL
China 3PL stands for “Third-Party Logistics” services in China. It refers to companies that provide logistics and supply chain management solutions to businesses. These companies handle various aspects of logistics, such as warehousing, transportation, order fulfillment, inventory management, and more. China 3PL providers play a crucial role in streamlining operations and reducing costs for businesses that want to import, export, or distribute goods in China or internationally. They help businesses focus on their core activities while outsourcing their logistics needs to experts in the field.
Part 2. Services Offered by China 3PL Providers
The exact service variation depends on the particular 3PL company you choose for order fulfillment.
However, these are the typical services China 3PL companies offer online sellers:
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Pick and Pack
Picking and packing are always the first steps in the order fulfillment process. If done wrong, it will cost your business in unrealized income and returns.
The service involves identifying the product (picking) and packaging it for shipping. 3PL companies differ in the orders they accept to pick according to size and complexity. Make sure your 3PL of choice handles the products you deal in.
Also, pick a company that can handle products at your scale. It should also guarantee presentable, secure, and affordable packaging.
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Shipping
China 3PL companies offer shipping services for your products by sea or plane. They do this by reaching an agreement with a shipper or airline. Since this is the costliest part of the process, choose a company that offers the most attractive rates.
Pick a company whose established supply chains are immune to minor upsets to reduce the likelihood of unfulfilled orders and dissatisfied customers.
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Warehousing
Some 3PL companies in China offer only drop shipping services. Many have fulfillment centers where they store products until they need to ship. A China 3PL with adequate warehousing is handy for aggregating orders and scaling inventory.
Some 3PL companies in China also offer warehouse management systems that help you manage your inventory efficiently.
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Inventory Management
3PL companies hold your inventory and therefore offer the most efficient basis for managing it. It is through the 3PL that you can know how much you hold, where it is, where it ought to go, and how to distribute it.
By being able to tell how much inventory you hold, you can strike a good balance between orders and stock. This way, you never run out or carry too much merchandise that ties up your cash.
Tracking inventory on your own may be time-consuming or costly. Also, you may not have the expertise. A 3PL company offers inventory management services in such cases.
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Kitting and Combined Shipping
Kitting involves grouping individual products and selling them off as a “kit”. This is more beneficial as it saves on picking and packing time. Instead of packing individual products, the warehouse management packs bundles of grouped products.
Combined shipping involves grouping multiple items from different orders by the same customers for delivery as one final package. With all your items grouped together, it means you will have reduced shipping costs compared to what you’d pay for the delivery of individual items.
Overall, letting a 3pl company kit, and combine your items enhances a streamlined order fulfillment where you receive a complete and convenient package. This means you’ll enjoy the improved efficiency as there will be less number of shipments to fulfill your orders. This saves time and resources for both the shipping company and the receiver.
Part 3. How to Choose the Best China 3PL Company
A 3PL company is an indispensable partner for your e-commerce business. To survive and thrive, you must carefully pick the company.
Tip: If you want to save shipping costs, you can rely on 3PL services like NextSmartShip.
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Here are the factors to consider while choosing a 3PL company in China:
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Capability
Does the 3PL company have the means and expertise to meet your needs now and in the future? Check to see if the company has fulfillment centers and if they are close to manufacturers and shipping hubs.
The 3PL company should provide all the specific services your business requires, particularly those listed above, as well as value-added services.
Find out if they have someone proficient in English for ease of communication.
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Reliability and Speed
Your customers expect your reliability and speed as a bare minimum when they place orders with you. You must expect the same from your 3PL company, or you will not be in business long.
Pick a company that has built a reputation serving businesses like yours. You lose time and money if your 3PL company is unreliable. Also, without reliability, you cannot scale your businesses.
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Client Support
Choose a 3PL company that provides efficient client support. The non-physical nature of your partnership requires a lot of communication. Your 3PL provider must prioritize communication by putting suitable measures in place so that you deal with any emergent issues at once.
Similarly, the 3PL provider must have the means to respond to any issues promptly to minimize any adverse effects. Speed and reliability are essential in online commerce, and the logistics provider must be able to help you deliver them.
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Experience in your Area of Operation
China 3PL companies feature varied industries as clients. However, try to work with a company with vast experience in your particular industry.
Specialization often means that they have established hardware and software facilities uniquely suited to the needs of your business. Moreover, serving businesses like yours equips the company with specialized experience that is gold to current and future business needs.
Consequently, a 3PL with experience serving your business ensures efficiency and cost-effectiveness.
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Technology
A 3PL’s ability to integrate its technology with yours vastly improves the efficiency, reliability, and speed with which you can deliver products to your customers.
The ability to integrate your technology with your 3PLs enhances the convenience that e-commerce technology is for yourself as well as your customers.
Integrated technology lets you track orders and manage inventory quickly, efficiently, and at a lower cost. China 3PL providers will provide integration with their technology as a matter of course but to varied degrees. Opt for a China 3PL that allows integration to the greatest possible degree.
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Cost
China 3PLs are cheaper than other 3PLs since they are mainly located close to manufacturing and transport hubs.
However, even among China 3PLs, there are price variations. Your guidance should be on the value you require against the price. Aim for great value rather than low pricing.
Part 4. Best Practices for Working with China 3PLs
These tips will help you get the most out of your China 3PL provider:
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Make Contingency Plans
Unexpected eventualities are inevitable. Have contingency plans to minimize the effect of unfortunate occurrences and exploit the incredible opportunities.
There may be a spike in orders due to the favorable season or successful marketing spree. On the reverse, you may have to deal with unexpected returns or canceled orders, forcing you to hold onto more inventory than you want.
Also, China has holidays different from the US, which may disrupt fulfillment if you do not plan for it in advance.
Set up appropriate reactions with your China 3PL beforehand to maximize the moment or avert catastrophe.
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Shop for Value in Fulfillment Costs
Avoid the temptation to prioritize costs over value. Though add-ons like close client support, consultation, kitting, and integrating tech support may cost more, the dependability of the guarantee is worth it.
Rather than price, evaluate the soundness of a 3PL’s facilities, reliability of shipping lines, experience, and reputation. These are better measures of value than price.
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Strategize your SKU selection
In managing inventory for the fulfillment, set up your 3PL to focus on the more profitable products, even if they are yet to run out. Keep track of them and prioritize space and other 3PL facilities over products with a lower profit margin, even if they have run out.
Leverage your 3PL to help you strategize your SKU selection so you can restructure your inventory and even scale.
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Opt for Strategically Located Fulfillment Centers
The closer a fulfillment center is to the product source, transport hub, and delivery center, the cheaper and less prone to disruptions.
If you are delivering outside China, choose a 3PL close to the manufacturing and transport hubs. Some even maintain fulfillment centers in major e-commerce markets worldwide to be closer to your customer.
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Set Expectations
To enable a 3PL to serve you effectively, lay out clearly your needs, seek necessary guidance, and communicate expectations.
Establish performance metrics that paint a clear picture of what success or failure looks like for your 3PL provider.
Similarly, monitor and evaluate how your 3PL meets established goals so that you can respond timely if there are challenges.
Part 5. Why Choose NextSmartShip as your China 3PL
For online sellers seeking fulfillment services out of China, NextSmartShip offers 3PL services that make their businesses hassle-free and at value for money.
NextSmartShip has warehouses worldwide, bringing fulfillment centers closer to the customer. Its technology synchronizes easily with your website, simplifying the automation of processes, tracking and managing inventory, and tracking shipments.
Besides, NextSmartShip is integrated into major e-commerce platforms like Amazon, E Bay, and Shopify, which makes onboarding seamless.
With NextSmartShip, you gain access to all typical 3PL services as well as personalization and customization features in packaging, labeling, and kitting.
NextSmartShip’s services guarantee reliability, fast delivery, and affordability. You become free to focus on scaling and growing your business.
Join NextSmartShip today to get the best in 3PL services.
