Souq has always dominated the e-commerce market in the Middle East. It has been deeply involved in the Middle East market for a long time, with more than 6 million users and up to 10 million unique visits per month. Since Amazon successfully acquired Souq in March this year, this e-commerce giant has continued to operate as an independent brand and has received full support from Amazon, further consolidating its position in the Middle East e-commerce field. For Chinese e-commerce companies, if they want to make a breakthrough in the Middle East market, entering Souq is undoubtedly a shortcut.
In cross-border e-commerce, logistics has always been a key link. Souq has adopted two different logistics models in this regard: FBS service and overseas warehouses, providing sellers with more flexible options. This article will compare these two logistics models in detail to help sellers better understand the operating mechanism of the Souq platform.
1. FBS service.
FBS is the abbreviation of Fulfiled by Souq, which is similar to Amazon’s FBA model. Sellers can choose to use the FBS service when uploading products. Once the order is confirmed, the seller only needs to contact Souq’s logistics team to deliver the goods to the Souq warehouse on the specified delivery date. From this point on, Souq is responsible for all aspects including warehousing, picking and packing, delivery, payment, customer service and return processing. Sellers hardly need to participate, and do not even need to confirm orders.
Features of FBS service:
Limited product selection: FBS prefers small, high-profit and high-quality products, and has weight restrictions on goods, such as no more than 15kg in the UAE and no more than 10kg in Saudi Arabia.
First-leg service: No first-leg customs clearance service is provided, and sellers need to handle customs clearance issues on their own.
Product support promotion: Souq will increase the exposure of sellers’ products, improve Listing rankings, help grab shopping carts, etc., which will help increase store traffic and sales.
High warehousing costs: Compared with overseas warehouses, the cost of using FBS is relatively high. However, sellers can share the warehousing costs by increasing the unit price of products.
Risk of goods storage: The placement of goods in the FBS warehouse is associated with the security of the Souq account. If there is a problem with the account, the goods placed in the FBS warehouse may be temporarily seized.
2. Overseas warehouse.
In cross-border e-commerce, overseas warehouse refers to domestic enterprises shipping goods to target market countries through bulk transportation, setting up warehouses locally to store goods, and then sorting, packaging and delivering them in a timely manner according to sales orders. The Souq platform supports sellers to choose to use overseas warehouses as a logistics method.
Features of overseas warehouses:
Wide range of products: There is no restriction on goods like FBS, and large and heavy goods are also suitable for using overseas warehouses.
Provide first-leg customs clearance service: Some third-party overseas warehouse service providers will provide first-leg customs clearance service, which improves the operational convenience of sellers.
Product promotion needs to be handled by yourself: The Souq platform does not provide additional product promotion support, and sellers need to be responsible for promotion inside and outside the site.
Relatively low storage cost: Compared with FBS, the cost of using overseas warehouses is relatively low. Sellers can attract customers by lowering product prices.
The risk of goods storage is low: It is less related to the security of Souq account. Even if there is a problem with the account, the goods placed in the overseas warehouse will not be affected.
Comparative analysis
By comparing FBS service and overseas warehouse, the following conclusions can be drawn:
Product selection range: FBS service has stricter requirements on goods, while overseas warehouse is more flexible and suitable for all kinds of goods.
First-leg service: FBS does not provide first-leg customs clearance service, while some overseas warehouse service providers provide this service, which improves the operational convenience of sellers.
Product promotion support: Sellers who choose FBS service can get product promotion support from Souq, while sellers who choose overseas warehouse need to handle product promotion by themselves.
Warehousing cost: Relatively speaking, the cost of FBS service is higher, while the cost of overseas warehouse is relatively low.
The risk of goods storage: FBS service is more related to the security of Souq account. Account problems may lead to the seizure of goods, while the risk of goods storage in overseas warehouse is lower.
Conclusion: When choosing the logistics model of the Souq platform, sellers need to make a reasonable choice based on their actual situation and business strategy. Both FBS services and overseas warehouses have their own strengths and weaknesses. The key lies in the seller’s comprehensive consideration of product characteristics, promotion strategies, warehousing costs and account risks, so as to better utilize the platform advantages of Souq, an e-commerce giant in the Middle East, and achieve more efficient cross-border e-commerce operations.