eCommerce Fulfillment from China

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.


Additional reading

Dive deeper into China fulfillment with the following articles.

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China eCommerce warehousing and fulfillment

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:

Services

When looking for an eCommerce fulfillment partner, the following checklist should serve as a reference point for the minimum services offered:

Feature Recommended Value
Operating Days Minimum 6 days per week
eCommerce fulfillment Yes
Crowdfunding fulfillment Yes
Processing Delay 1 - 6 hours
Own Warehouses? Yes
Warehouse inspections? Yes
Duty Paid Shipping? Yes
Direct Line Shipping? Yes
Courier Follow-up Yes
Customer Follow-up Yes
Tailored Shipping Partners Yes
Management Portal Simple
eCommerce Integrations Yes
Amazon Integrations Yes
Free Packaging Yes
Payment Options Post paid by wire / credit card / Paypal

Price

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:

Support

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.

Delivery problems fall into two categories:

  • Resolvable with intervention
  • Unresolvable with intervention It is vital that your eCommerce fulfillment partner provides support for both situations.
Resolvable 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.

Unresolvable with intervention

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
Shipwire No No
Floship No No
SPNS Yes Yes
SendFromChina No No
ChinaDirect No No

Service Level Agreements (SLAs)

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
Shipwire Yes
Floship No
SPNS Yes
SendFromChina No
ChinaDirect No

Support Importance

Post-shipment support and SLAs make a huge impact to your bottom line.

Imagine the following scenario:

  • Average shipments: 10 per day
  • Average product value: $50
  • Average product profit: $20 per product
  • Average dispatch cost (pick and pack, packaging, courrier fee): $5
  • Average resolvable loss rate: 5% lost, 90% recoverable
  • Average unresolvable loss rate: 0.005%
  • Average rate of late dispatches: 2% (50% refunded shipping, 50% refunded order)

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)
$5670
Unresolvable loss 18 Recoverable Packages
18 x Product Cost ($30)
18 x Dispatch Cost ($5)
$630
Late dispatch (shipping refund) 72 x Shipping Cost ($5) $360
Late dispatch (full refund) 72 x Product Value ($50)
72x Shipping Cost ($5)
$3960
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)

Support Conclusion

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.

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