The emergence of overseas warehouses has simplified the originally complex cross-border delivery process into two links: “sorting and delivery”. Due to the small number of operating processes, not only the damage rate and loss rate of packages are greatly reduced, but also the real-time tracking and query of the delivery progress can be realized, providing a practical guarantee for the safe delivery of goods.
Overseas warehouses guarantee the local inventory of sellers and facilitate them to provide timely return and exchange services, so that the entire after-sales process can be comparable to local physical retailers. At the same time, as the threshold for after-sales service requirements continues to increase, overseas warehouses will become a cross-border retail integrated solution center with warehousing and transshipment as the core, and with a variety of additional functions such as after-sales, maintenance, and customer service, effectively promoting the development of Chinese sellers in overseas markets.
1. Leverage the transformation and upgrading of the industry
By using overseas warehouses, the competitiveness of sellers in Greater China will be significantly improved in five aspects: increasing the profit margin of a single item, increasing sales, expanding sales categories, reducing logistics management costs, and improving account performance, which will ultimately promote the industry from price wars to benign service competition.
2. Increase the profit margin of a single item
In mature markets such as the United States, the United Kingdom, Australia and Germany, consumers’ requirements for product delivery time exceed their sensitivity to price. Therefore, sellers in Greater China have concentrated on building or renting overseas warehouses in these markets, which not only meets consumers’ timeliness requirements, but also improves sellers’ pricing levels. According to eBay’s internal data, the average selling price of goods stored in overseas warehouses is 30% higher than that of similar goods shipped directly.
3. Stable supply chain increases product sales
The establishment of overseas warehouses enables sellers to deliver goods to the sales market in advance to complete stocking, ensuring a stable supply of goods. Moreover, since consumers are more inclined to choose “local” under the same conditions, storing goods in overseas warehouses helps to improve the search ranking of goods and increase the exposure of goods and sellers’ stores themselves. According to eBay’s internal data, among similar goods, the sales volume of goods shipped from overseas warehouses is an average of 3.4 times that of goods shipped directly from mainland China.
4. Expand sales categories
In the traditional cross-border retail logistics system, many oversized, overweight, and unconventional-shaped goods cannot be transported through e-mail and international dedicated logistics. The centralized transportation mode adopted by overseas warehouses breaks through the restrictions on weight, volume, and value of goods, which helps expand the sales categories of Chinese sellers. In recent years, the retail exports of electronic, auto parts, and home gardening products have increased significantly thanks to the application and development of overseas warehouses.
5. Reduce logistics management costs
The centralized sea transportation method adopted by overseas warehouses has greatly reduced the average freight of a single item, especially when the weight of the goods is greater than 400 grams, the cost advantage of using overseas warehouses is more obvious. In addition to directly reducing transportation costs, overseas warehouses also help sellers streamline the delivery process: after receiving the order, the seller only needs to transmit the delivery information to the warehouse, and a series of subsequent work can be completed by professional warehouse managers. Sellers not only save a lot of manpower, but also benefit from professional warehouse management, effectively reducing the error rate in the sorting and sending of goods.
6. Improve account performance
Stable sales and more and better buyer feedback will improve sellers’ account performance. According to eBay’s internal data, using overseas warehouses can increase sellers’ logistics praise rate by 30%. Excellent account performance further enhances consumer trust, thereby promoting the long-term healthy development of the business.
In order to maximize the advantages of overseas warehouses, sellers need to use the support of big data technology to select categories and accurately predict replenishment cycles. Cross-border e-commerce platforms represented by eBay provide market and product analysis for sellers in Greater China with a large amount of closed-loop data, which can help them more accurately estimate the needs of overseas consumers, thereby effectively reducing sellers’ risks in inventory and supply chain management and optimizing the utilization of working capital.