What is Overseas Warehouse

Overseas warehouses refer to storage facilities established overseas. In cross-border e-commerce, overseas warehouses refer to a one-stop inventory management service in which domestic enterprises transport goods to target market countries in bulk, set up warehouses and store goods locally, and then sort, pack and deliver goods directly from local warehouses in a timely manner according to local sales orders.

Reasons for the rise

It is mainly to solve various cross-border difficulties, such as long delivery time, inability to track packages throughout the entire process, customs clearance obstacles, damage or even lost packages, etc., to improve customers' shopping experience.

Classification

1. Self-operated overseas warehouses

The self-operated overseas warehouse model refers to an overseas warehouse built and operated by an export cross-border e-commerce enterprise, which only provides warehousing, distribution and other logistics services for the goods sold by the enterprise. In other words, the entire cross-border e-commerce logistics system is controlled by the export cross-border e-commerce enterprise itself.

2. Third-party public service overseas warehouse

A third-party public service overseas warehouse refers to an overseas warehouse built and operated by a third-party logistics company. It can provide a logistics model in which logistics services such as customs clearance, warehousing quality inspection, order reception, order sorting, multi-channel delivery, and subsequent transportation are provided to numerous export cross-border e-commerce companies. In other words, the entire cross-border e-commerce logistics system is controlled by a third-party logistics company.

Common business of overseas warehouse

1. Drop shipping : The seller sends bulk stock products from China to overseas warehouses, which are then counted and put on the shelves by overseas warehouse staff. When a buyer places an order, the seller only needs to issue a shipping instruction in the overseas warehouse system, and the warehouse staff will deliver the goods locally according to the instruction.

2. Change the label . If there is a problem with the seller’s account or the label is affixed incorrectly, the product needs to be sent to an overseas warehouse to have the label changed and resold.

3. Transshipment . The most common situation is to combine FBA and third-party overseas warehouses. First, stock up the goods in the overseas warehouse, and then transfer them to FBA regularly or irregularly (replenishment). Ship from FBA while shipping from overseas warehouses;

4. Handle value-added services such as returns and exchanges ;

5. Distribution : Take advantage of the local advantages of overseas warehouses to promote and sell products conveniently.

Overseas warehouse delivery operation process

Mainly includes first-leg transportation-warehousing management-local distribution:

Advantages of overseas warehouses

1. Reduce logistics costs

The logistics cost of shipping from overseas warehouses, especially local shipping, is much lower than shipping from China. For example, if you send one kilogram of goods from China to the United States by DHL, it costs 124 RMB, while it only costs $5.05 to ship to the United States.

2. Accelerate logistics timeliness

Shipping from overseas warehouses can save the time spent on customs declaration and clearance, and according to the seller's usual shipping method (DHL 5-7 days, FedEx 7-10 days, UPS more than 10 days), if the goods are shipped locally, customers can receive the goods in 1-3 days, which greatly shortens the transportation time and speeds up the timeliness of logistics.

3. Increase product exposure

If a platform or store has its own warehouse overseas, local customers will generally give priority to local delivery when shopping, because this can greatly shorten the time it takes to receive goods for buyers. The advantages of overseas warehouses can also allow sellers to have their own unique advantages, thereby increasing product exposure and boosting store sales.

4. Improve customer satisfaction

Because not all products received can satisfy customers, there may be situations such as damaged goods, short shipments, wrong goods sent, etc. At this time, customers may request returns, exchanges, re-delivery, etc. These situations can be adjusted in the overseas warehouse, which greatly saves the timeliness of logistics. To a certain extent, it can not only regain the favor of buyers, but also save transportation costs for sellers and reduce losses.

5. It is conducive to market development

Because overseas warehouses are more likely to be recognized by foreign buyers. On the other hand, if sellers pay attention to word-of-mouth marketing, their products will not only be recognized by local buyers, but it will also help sellers accumulate more resources to expand the market and expand product sales areas and sales scope.

Risks faced by overseas warehouses

1. Policy and regulatory risks: including product intellectual property risks and tax risks;

2. Business risks: vulnerable to large initial investment and long profit cycle;

3. Risk of unsalable inventory: According to data from Lianyu International in May 2017, 30% of Chinese cross-border e-commerce companies face the risk of unsalable goods;

4. Customs clearance risks.