If you manufacture or source within China, using a China-based eCommerce fulfillment will save time and money over international warehouses
However, service and quality vary dramatically between Chinese warehouse and fulfillment providers.
If you're looking find a new provider, or are looking for an alternative to Floship, SendFromChina, etc - read on for an in-depth overview of the China warehousing industry.
The choice of logistics partner for your eCommerce business is vital. Your business is judged by the speed, quality and price of shipments - and is held liable for any mistakes the shipper may make. Lost or damaged packages are your responsibility to replace. Customers with incorrectly picked / packed products expect compensation or refunds.
Chosing a partner that understands the risks to your reputation and cares for your customers is the single most important decision of running an eCommerce business.
There are several key elements to consider when selecting a new fulfillment partner, or when looking for an alternative warehousing partner:
When looking for an eCommerce fulfillment partner, the following checklist should serve as a reference point for the minimum services offered:
|Operating Days||Minimum 6 days per week|
|Processing Delay||1 - 6 hours|
|Duty Paid Shipping?||Yes|
|Direct Line Shipping?||Yes|
|Tailored Shipping Partners||Yes|
|Payment Options||Post paid by wire / credit card / Paypal|
Price and market position are certainly important factors when considering alternative eCommerce providers. However, decision should not be based on price alone.
As an eCommerce merchant, your business model is to deliver a product to a customer, as quickly as possible. As such, your fulfillment partner is key to your customer's satisfaction, your company's reputation, and the success of your entire business.
There are fixed costs in eCommerce fulfillment: paying workers, paying rent, paying packaging, paying logistics companies. At some point, a lower price means you are removing service. Removing service means removing customer satisfaction. Likewise, paying an unreasonably high price will also impact your customers: higher product cost, more expensive shipping, and ultimately less income.
The key is finding a middle ground: define the features that are important to your customers, and find the fulfillment partner that provides these features with the most competitive price.
It is often difficult to know the true cost of a warehouse before actually sending stock, due to hidden or unexpected costs.
We have assembled the latest pricing and feature information from the most popular eCommerce fulfillment providers and provided comparisions and breakdowns:
Logistics and delivery are highly complex mechanisms. Customers change address, or miss deliveries. Planes get delayed. Packages get lost. All in all, between 3 - 8% of deliveries will have some type of problem; 95% can be resolved with intervention.
In many instances, packages are 'undeliverable' due to a mistake in the address. This typically means that the package will have already arrived in the destination postal office, not far from the customer - and just needs a correction. Most shipping partners will allow for address updates and one re-delivrey attempt.
Typically the window to update the address and redeliver is small - and shippers will only accept updates from the sender: the warehouse.
A quality fulfillment partner will resolve these issues on your behalf - by contacting the customer and contacting the shipping company.
Sometimes, a package cannot be delivered - typically due to loss or destruction. In this instance, insurance can be claimed against the courrier. However, insurance levels depend from shipper to shipper, and claims can only be initiated by the sender - ie, the warehouse.
Unless your logistics partner initiates and follows insurance claims on your behalf, purchasing insurance will simply cost your more money.
The following table provides a summary of popular eCommerce fulfillment providers and their customer support levels:
|Resolvable Intervention||Managed Insurance|
Each eCommerce fulfillment provider will have processing and delivery times, ie: orders processed within 6 -24 hours, 6 days per week. As an eCommerce merchant, you communicate these times to your customers - and they expect these delays to be respected.
If the dispatch delay is not respected, your customer will expect and legally have rights to a full or partial refund.
Unless your warehouse partner provides "Service Level Agreement": you will pay for your warehouse's mistakes.
Below is a list of popular eCommerce providers and their SLA policy:
|Service Level Agreement|
Post-shipment support and SLAs make a huge impact to your bottom line.
Imagine the following scenario:
Loss of revenue for eCommerce warehouse with no support / no SLA:
|Detail||Cost / Loss of Revenue|
|Resolvable loss||162 Recoverable Packages
162 x Product Cost ($30)
162 x Dispatch Cost ($5)
|Unresolvable loss||18 Recoverable Packages
18 x Product Cost ($30)
18 x Dispatch Cost ($5)
|Late dispatch (shipping refund)||72 x Shipping Cost ($5)||$360|
|Late dispatch (full refund)||72 x Product Value ($50)
72x Shipping Cost ($5)
|Total loss||$10,620 (15% of profit)|
Loss of revenue for eCommerce warehouse with support & SLA:
|Detail||Cost / Loss of Revenue|
|Resolvable loss||162 Recoverable Packages||$0|
|Unresolvable loss||18 Unrecoverable Packges||$630|
|Late dispatch (shipping refund)||72 (Covered by SLA)||$0|
|Late dispatch (full refund)||72 (Covered by SLA)||$0|
|Total loss||$360 (0.05% of profit)|
eCommerce fulfillment providers that do not provide support can cost up to 15% of your profit. When picking an fulfillment partner - make sure they provide support, and you know the details of their SLA.