(1) Overseas warehouses help reduce the average freight cost of a single item
The centralized sea freight method adopted by overseas warehouses has greatly reduced the average freight cost of a single item. In particular, when the weight of the item is greater than 400 grams, the cost advantage of using overseas warehouses is more obvious, which effectively reduces the logistics management cost. In general, overseas warehouses can reduce international logistics costs by 20% to 40%. The heavier the goods, the better the cost saving effect. For example, a cloth wardrobe weighing about 10 kilograms would cost 300 to 400 yuan if it is shipped directly from China to the United States. However, through overseas warehouses, the average freight cost is only a few yuan. Even with the foreign delivery fee, it is far lower than the direct mail fee. According to eBay trading platform statistics, the average logistics cost is reduced by about 25%, of which 60% of the cost is saved by sea freight and 30% of the cost is saved by air freight.
(2) Overseas warehouses help improve sellers’ account performance
eBay data shows that 78% of the sellers surveyed said that after using export overseas warehouses, the delivery speed has been significantly improved. Their account performance has been significantly improved after using export overseas warehouses. Using overseas warehouses can increase sellers’ logistics praise rate by 30%.
(3) Overseas warehouses help reduce sellers’ warehousing and logistics pressure
Shipment of goods to overseas warehouses is equivalent to outsourcing the warehousing and distribution business to overseas warehouse service providers. They generally have a more professional team and rich warehousing and logistics experience, and can process orders efficiently and quickly according to the seller’s instructions. Sellers do not have to spend time on product warehousing, inventory counting, packaging and delivery, saving a lot of energy and cost.
In addition, overseas warehouses can facilitate customer returns and exchanges. If the goods are returned by foreign customers after they are sold, the customer experience is poor and the return cost is high. Export overseas warehouses solve this problem. Sellers can promise return and exchange services to foreign customers, thereby greatly improving customer shopping experience and bringing more business opportunities.
However, overseas warehouses also have their own shortcomings. First, overseas warehouses have great storage pressure, high storage costs, and inconvenient capital turnover. As long as the seller’s products are stored in the overseas warehouse for one day, they have to pay one day’s storage fees. If the sales of goods are not ideal, the goods will be piled up in the warehouse, the storage costs will continue to rise, and it will be difficult to recover funds. If they are not handled properly, it will cause great losses.
Secondly, sellers cannot manage overseas warehouses like managing their own warehouses. Overseas warehouses have high requirements for the level of logistics information technology. Sellers transport goods to overseas warehouses for storage, and issue operating instructions through the company’s inventory management system to remotely operate the goods stored in overseas warehouses, which requires the logistics information system and the inventory management system to be organically connected.
Finally, the local operation of overseas warehouses involves more complicated local legal issues. From a legal perspective, an overseas warehouse should be a local physical “warehouse”. It is a business behavior to distribute enterprises from overseas warehouses to local consumers, rather than simply delivering goods. It must pay consumption tax, business tax or comprehensive tax in accordance with the law. The operation of overseas warehouses requires the employment of local people, so it must comply with local labor laws and the requirements of trade union organizations. When goods need to be destroyed, there are also issues of environmental protection involved.