For many cross-border e-commerce sellers, choosing the right overseas warehouse is very important. At present, there are two options for overseas warehouse supply: FBA (Amazon fulfillment center) and overseas warehouses hosted by third parties. Both options have their own advantages and disadvantages, but how to decide between the two and achieve ideal benefits?
1. FBA warehouse
FBA is a service of Amazon, where sellers store their goods in Amazon’s warehouses. When there is an order, Amazon will be responsible for the packaging, distribution and customer service of the goods. In this way, sellers can use Amazon’s logistics and distribution network to improve delivery speed and service quality, and reduce the logistics burden of sellers.
FBA warehouses have a huge user base around the world, attracting millions of sellers to join. Its modern facilities and technologies enable the storage, packaging and distribution of goods to be carried out efficiently.
1. Advantages of FBA warehouses
When choosing an FBA warehouse, sellers can get strong product promotion support on the platform, including measures such as improving product display rankings and increasing shopping cart attractiveness, which can effectively promote store traffic and sales.
Another advantage is that products shipped from FBA warehouses can be removed from Amazon, which reduces the burden of subsequent management for sellers.
Although this policy helps to safeguard the rights and interests of customers, it may also lead to an increase in the return rate. It should be considered that returned goods may be charged additional destruction or return fees by the platform, which should also be included in the cost considerations.
2. Disadvantages of FBA warehouses
The choice of overseas warehouses is accompanied by some specific cost considerations. In the case of a large logistics scale, the cost of FBA warehouses is slightly higher than that of third-party overseas warehouses.
By increasing the unit price of products, sellers can share these storage costs. It is worth noting that products entering FBA warehouses need to meet certain standards, and sellers need to ensure that the outer shell and product labels are intact before delivery, while FBA warehouses do not provide product assembly services.
On the other hand, FBA warehouses do not cover the head customs clearance services required by sellers, which require sellers to consider separately.
2. Third-party overseas warehouses
Third-party overseas warehouses are warehouses operated and managed by independent logistics service providers, aiming to provide sellers with a variety of warehousing, packaging, distribution and logistics management services.
A bilateral meeting in the field of international logistics pointed out that 75% of sellers are using third-party overseas warehouse services, which means that overseas warehouses are entering a new 2.0 era. Relatedly, the role of overseas warehouses is gradually evolving from the traditional warehousing model to a more localized service. It enables sellers to conduct business overseas and realize localized operations without crossing international borders, thereby effectively meeting the needs of different markets.