Overseas warehouse refers to a form of transnational logistics in which cross-border sellers export products and goods in batches to overseas warehouses in accordance with general trade methods, and can achieve local sales and local distribution abroad.
There are two ways for transnational sellers to cooperate with third-party “overseas warehouses”: leasing and cooperative warehouse building.
The leasing method will incur rental fees, logistics costs, and warehousing costs, while cooperative warehouse building only incurs logistics costs. Compared with Amazon’s FBA, overseas warehouses communicate with buyers more promptly on many issues, and can also provide consignees and pay tariffs on behalf of customs clearance, and the price is much cheaper than FBA.
In general, the advantages of third-party overseas warehouses are mainly reflected in the following aspects:
It can help individual products increase profits. According to data from eBay, the average selling price of goods in overseas warehouses is 30% higher than that of direct mail goods.
A stable supply chain system helps to increase the sales volume of goods. Among the same type of products, the sales volume of goods in overseas warehouses is on average 3.4 times that of goods shipped directly from mainland China.
The centralized transportation mode adopted by overseas warehouses breaks through the weight, volume and price restrictions of goods, which helps to expand product categories.
The centralized sea transportation method adopted by overseas warehouses greatly reduces the average freight of a single piece of goods, especially when the weight of the goods exceeds 400 grams, the cost advantage of using overseas warehouses is more obvious. It effectively reduces the cost of logistics management.
Stable sales and more and better buyer feedback will improve the quality of sellers’ stores. According to eBay data, using overseas warehouses, sellers’ logistics reviews will increase by 30%.
However, third-party overseas warehouses also have disadvantages. For example, if the inventory quantity forecast is inaccurate, it will cause the goods to be unsalable; if there are errors in the tracking of goods, it will lead to loss; and it is also a big problem for overseas warehouse service providers to provide localized services and team management, which will also affect the seller’s service needs.
However, in terms of exports, the demand for overseas warehouses is becoming more and more obvious, and many sellers have begun to call for more value-added services for overseas warehouses, such as processing, finance, customer service, etc.