The early forms of overseas warehouses belonged to a few traditional foreign trade, brand companies and manufacturing factories. They only hired a few employees in Europe and the United States to manage warehouses to serve their own needs. Global Easy Shopping, Beifayi, Zongteng, Aoji and other sellers were the earliest prototypes of cross-border e-commerce export overseas warehouses. Since then, logistics companies such as Wanyitong, Export Easy, and Zebra have appeared, and more large sellers have built warehouses. The opening of FBA represents the official opening of the overseas warehouse market.
In recent years, the development of overseas warehouses has become a hot topic, mainly because cross-border exports are continuing to grow and direct mail logistics has entered a bottleneck period. Cross-border direct mail shipments are simple to start, but its order volume is continuing to grow, making the unstable defects of direct mail more prominent, so overseas warehouses are put on the agenda. Overseas warehouse service providers include platform self-operated warehouses, platform certified/public third-party service providers, seller self-built warehouses, etc. The business first flows to FBA, which has advantages in traffic, cost and service. Among the third-party overseas warehouses, a considerable part is extended from sellers, and another part is started from freight forwarders, customs clearance and overseas Chinese. In fact, overseas warehouses are a trade method that emphasizes investment. It is still difficult for warehousing to be profitable quickly as a logistics service. When large sellers reach a certain scale, they generally choose to register companies and trademark brands abroad. Self-built and self-operated warehousing is undoubtedly the most controllable. Most sellers are small and medium-sized sellers who aim to sell quickly and sell quickly. They are busy launching new products and clearing inventory. They cannot manage overseas warehouses like their own warehouses and can only hand them over to third-party overseas warehouse platforms for warehouse and distribution management.
Whether a merchant is suitable for overseas warehouses depends first on the product situation, and then on the logistics and service issues. The biggest risk is the “dead goods” that are uncertain in the market and cannot be sold for a long time. The characteristics of some products determine that they are not suitable for overseas warehouse shipments. Low-priced, light and small, and long-tail products can be shipped directly from China. Once switched to overseas warehouses, the profits of these products can easily be eaten up by the overseas warehouse and distribution costs. The selection of products in overseas warehouses will not be as casual as direct mail. SKUs must be carefully selected and streamlined. For the pressure of funds and goods, it will be very difficult to purchase too many products and sell them overseas. The first principle of product selection is that the market demand for the product should be large, and best-selling products should be found, because even if best-selling products are overstocked, they can still be cleared, while products with low conversion rates are easily turned into dead inventory once they are overstocked.
Secondly, for large, expensive, and heavy products that have no logistics channels or have problems with domestic direct mail delivery, it is necessary to cut into product categories to open up sales, and overseas warehouses are an icebreaker. It is easy to manage large warehouses, which can reduce labor costs, but the operating and logistics costs are high. Subcategories such as electronics, home appliances, outdoor gardening, auto parts, electromechanical instruments, and industrial products are the most common types of stock in overseas warehouses, which can take into account both profit margins and conversion rates, and increase total revenue through high unit prices and high turnover. If the profit margin of a product shipped from China is 30%, and the profit margin of overseas warehouses is 15%, but the platform gives users with overseas warehouses 3 times the traffic and some exemption clauses, and the conversion rate of overseas warehouses reaches 4 times that of cross-border direct delivery, then the total profit obtained in the same period of time is twice that of direct mail.
Upgrade logistics services to local delivery from overseas warehouses. Warehouse distribution is faster than direct mail, so sellers’ product selection and marketing also need to be upgraded to give full play to the role of overseas warehouses in new products, store maintenance and rating accumulation. No logistics solution is perfect, and overseas warehouses are not omnipotent. It is necessary to comprehensively consider the seller’s capital turnover and the sales cycle of the product, and combine it with other logistics channels. In addition to general warehouse distribution, some large items also require door-to-door delivery, installation, maintenance, reverse logistics and other professional extended services to meet buyers’ purchasing demands. For merchants, the core of “warehouse” is still to serve the market, including supply chain management such as purchasing and replenishing, improving turnover, avoiding unsalable goods, and preparing for peak seasons. The core of logistics is implementation. It takes a long time for domestic logistics companies to go abroad and conduct cross-border operations and manage assets.
For overseas warehouse service providers, “warehouse” is an investment. Overseas warehouses use e-commerce logistics management and technology to transform and integrate existing logistics and warehousing resources abroad. There must be a legal operating entity and a stable and legal lease abroad to ensure the safety of goods in the warehouse. Operations can also be integrated, that is, the first-leg consolidation, air transportation, customs clearance, etc. are entrusted to international freight forwarders, and overseas door-to-door services are entrusted to local postal and express delivery. On the one hand, in the market, scattered customers, especially small batches, are snatched up at low prices and free of rent. For customers with large inventory, their return costs are low, and without service, it is difficult to bind customers for a long time, and the warehouse faces the risk of being vacant; on the other hand, the quality of warehouse operations varies, such as slow and unprofessional customer service response, long shelf time for goods in peak season, inaccurate inventory, wrong shipment, delivery, unstable system, slow first-leg time, damage and difference of goods, and other common problems. For this reason, the industry generally uses two-way overseas warehouses to make up for the waste of warehouses in the off-season, and with the help of the role of overseas warehouse nodes, develop supporting dedicated lines, FBA transit, exchange, overseas purchase and collection services; overseas warehouse front-end agents, consignment sales of virtual sub-warehouses and warehouses in warehouses; distribution, marketing and clearance of unsalable inventory in overseas warehouses; through data, help sellers reduce inventory and capital occupation, and provide various financial and tax response plans.