Third-party overseas warehouses: advantages, disadvantages and their application in cross-border e-commerce

1. Advantages of third-party overseas warehouses

1. Increase product profit margin

Third-party overseas warehouses can help increase the profit margin of a single item. According to eBay data, the average selling price of goods stored in overseas warehouses is 30% higher than similar goods shipped directly.

2. Increase sales

A stable supply chain helps increase product sales. The sales volume of goods shipped from overseas warehouses is 3.4 times that of goods shipped directly from China.

3. Break through logistics restrictions

The centralized transportation model breaks through the restrictions on product weight, volume and price, and helps expand sales categories; especially when the product weight is greater than 400 grams, the price advantage of using overseas warehouses is more obvious.

4. Improve logistics praise rate

Using overseas warehouses can increase the seller’s logistics praise rate by 30%, thus improving the seller’s account performance.

5. Risk avoidance

Third-party overseas warehouses can avoid risks caused by uncertainties such as laws and regulations, industry policies, taxation and overseas personnel management.

6. Global logistics network

Third-party overseas warehouses provide a global logistics network that can store goods close to the target market, greatly shortening transportation time.

7. Reduce costs

Establishing your own warehouse and operations team requires huge investment and management costs. Choosing a third-party overseas warehouse can eliminate these tedious operational links and greatly reduce operating costs.

8. Expand market coverage capabilities

By cooperating with third-party overseas warehouses, sellers can store goods in warehouses in different regions around the world to achieve wider market coverage.

9. Excellent after-sales service

Third-party overseas warehouses provide sellers with reliable after-sales support by establishing a complete after-sales service process.

10. Technical and data support

Through advanced warehouse management systems and data analysis tools, third-party overseas warehouses can provide sellers with accurate and real-time inventory management and sales data analysis.

2. Disadvantages of third-party overseas warehouses

1. Inventory forecast is inaccurate

Inaccurate inventory forecasting may result in unsalable goods.

2. Cargo tracking errors

If there is any discrepancy in cargo tracking, items may be lost.

3. Poor localization service

Poor localization services and team management of overseas warehouse service providers will also affect customers’ service experience.

3. Application of third-party overseas warehouses

1. Business process

• Step 1: The export cross-border e-commerce enterprise transports the goods to the overseas warehouse operated by the third-party logistics enterprise.
• Step 2: The export cross-border e-commerce enterprise remotely operates the goods stored overseas through the logistics information system of the third-party logistics enterprise.
• Step 3: The third-party logistics company stores, sorts, packs, and distributes the goods according to the instructions of the export cross-border e-commerce company.
• Step 4: After the shipment is completed, the logistics system of the third-party logistics company will be updated in time to display the inventory status.

2. Scope of application

Public service overseas warehouses are suitable for export cross-border e-commerce companies with relatively small market shares and relatively weak strength.

3. Policy process

• Compliance requirements: Third-party overseas warehouses usually require sellers to comply with a series of compliance requirements, including but not limited to product certification, labeling requirements, quality inspection, etc.
• Warehouse management: The policies and procedures of third-party overseas warehouses usually include warehousing management regulations.
• Logistics and distribution: The third-party overseas warehouse policy process also includes logistics and distribution regulations.
• After-sales service: Third-party overseas warehouses usually also have return and exchange policies and after-sales service requirements.

4. Things to note

• Before looking for a third-party overseas warehouse, merchants must first clarify their own needs.
• A reasonable quotation should be made and avoid hidden charges.
• Before cooperating with a third-party overseas warehouse, sellers should carefully read and understand the policies and procedures in the cooperation agreement.
• Sellers should understand the regulatory standards of the target market, including product certification, labeling requirements, etc.
• Sellers should maintain close communication and cooperation with third-party overseas warehouses.
• Regularly monitor and evaluate whether the policies and procedures of third-party overseas warehouses meet its own needs and changes in the target market.

5. Minimum shipment requirements

• The minimum shipment quantity requirement refers to the minimum quantity that the third-party service provider requires the seller to ship within a certain period of time when using third-party overseas warehouse services.
• If you fail to meet the minimum shipment requirements, you may face risks such as additional fees, reduced service quality, and contract breach.
• In order to meet the minimum shipment volume requirements of third-party overseas warehouse service providers, measures such as planning the supply chain, increasing sales volume, increasing product categories, and regularly checking inventory can be taken.
• If you cannot meet the minimum shipment requirements, you can communicate with the third-party service provider to find a more suitable solution.

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