⚠️ The Price War in Fulfillment: A Race to the Bottom No One Wins

In recent years, the order fulfillment industry has seen rapid growth — fueled by the boom in e-commerce and the rise of digital-first brands. But with that growth has come an increasingly destructive trend: the price war.

While competition is healthy, an aggressive race to undercut prices has created serious ripple effects across the industry — threatening not only the health of logistics providers but also the very brands they aim to serve.

💣 Why Price Wars Are Unhealthy for the Fulfillment Industry

At first glance, lower prices seem like a win for e-commerce sellers. But beneath the surface, they’re a short-term gain at the cost of long-term value.

Margins get slashed, forcing 3PLs to cut corners — in staffing, technology investment, and process improvement.
Service levels become erratic, as warehouses run beyond capacity or lack the resources to handle exceptions and surges.
Customer experience suffers, especially during peak seasons or flash sale campaigns where every minute counts.

Eventually, the same sellers who chased the lowest cost start dealing with delays, errors, and poor visibility — damaging their own customer satisfaction and brand reputation.

🧭 3PLs Must Maintain Their Niche — Not Compete on Price Alone

The fulfillment industry isn’t one-size-fits-all. Each 3PL has a unique strength — and the most successful ones are those who own their niche:

Some excel at speed, with tech-first operations for DTC brands.
Others specialize in bulky or fragile items, requiring unique storage and handling protocols.
Some offer value-added services, like customized packing, returns processing, or cross-border documentation.

Instead of slashing rates to win the next contract, 3PLs must position themselves as strategic partners, not commodity vendors.

📉 Can Low-Priced Fulfillment Companies Sustain Themselves?

The logic often goes: If we drop our prices, we’ll win more volume. That volume will make up for the margin loss.

But here’s the reality:

Low prices attract high-churn, low-loyalty clients.
High volumes with low margins = operational chaos, especially if there’s no automation or scalable tech stack.
Over time, many such 3PLs either burn out, get acquired, or quietly exit the market, leaving brands stranded mid-peak season.

Brands that depend on rock-bottom providers often find themselves stuck in reactive fire-fighting, switching providers multiple times a year — with lost inventory and customer complaints in between.

📦 Case Study: What the Courier Industry in Malaysia Can Teach Us

Let’s look at a parallel: the Malaysian courier industry, which has faced a similar price war in the last few years.

When new entrants flooded the market — often backed by aggressive funding or government incentives — they started offering parcel delivery rates below RM5.00, undercutting incumbents.

At first, e-commerce sellers rejoiced. Lower delivery fees meant more profit.

But here’s what happened next:

Service reliability collapsed: parcels delayed for days, especially during peak seasons, customer complaints surged.
Customer service was minimal or non-existent as companies lacked the manpower to handle rising volume.
Parcel loss rates increased, with poor tracking and accountability.
Several smaller players shut down or merged, unable to sustain the artificially low pricing model.

In the end, it was the e-commerce sellers who paid the price — losing customer trust and scrambling to find reliable alternatives.

This is the same cautionary tale now repeating itself in the fulfillment sector.

🤝 Sustainability of the Fulfillment Partnership

For brands, fulfillment is not a transactional relationship — it’s a core part of your customer promise.

A sustainable logistics partner:

Invests in technology to grow with your brand
Trains people to understand your product, not just pack it
Communicates clearly during unpredictable moments
Builds capacity ahead of demand, not only after it breaks

These partners cost more — and are worth it. Because fulfillment isn’t just about getting a parcel from point A to B. It’s about delivering trust at scale.

🧠 The Way Forward: Compete on Service, Not on Price

For the industry to thrive, both brands and 3PLs need to reframe the conversation.

Don’t ask: Who’s the cheapest?
Ask: Who understands my needs and can scale with me sustainably?
Don’t offer: Rock-bottom pricing with no buffers
Offer: Reliability, transparency, and a partnership mindset

This shift isn’t easy — but it’s the only way to avoid the downward spiral of commoditization, and instead build an ecosystem where logistics drives brand growth, not drags it down.

📦 About SnT Global Logistics

At SnT Global, we believe that fulfillment isn’t just a back-end service — it’s a growth engine. With deep experience in supporting multi-channel brands, robust infrastructure across Southeast Asia, and a commitment to service quality, we help brands scale without compromise.

If you’re ready to move beyond the price war, let’s talk.