Amazon US overseas warehouse selection guide: FBA vs third-party overseas warehouse

With the vigorous development of the cross-border e-commerce industry, more and more sellers hope to expand their business to the international market. As one of the world’s most well-known mature retail platforms, Amazon’s US site has attracted the attention of many sellers. In order to better meet customer needs, reduce transportation costs and shorten delivery times, sellers often also need to find overseas warehouses.

Key factors for choosing an overseas warehouse on Amazon’s US site

1. Compliance and Regulation

When choosing an overseas warehouse for Amazon’s US site, the first thing to pay attention to is compliance and regulatory requirements. Different countries and regions have different import and export regulations, so sellers need to ensure that their warehouse operations comply with these regulations. Ignorance of compliance issues can result in fines or shipping delays and should be taken seriously.

2. Logistics efficiency and cost

Another key factor is logistics efficiency and cost. Sellers need to consider the location of overseas warehouses to reduce shipping costs and shorten delivery times. In addition, the efficiency of logistics operations is also very important, including inventory management, order processing and returns processing. Sellers should also evaluate warehouse rental and service fees to ensure these costs are covered in the sale.

3. Inventory management and demand forecast

Effective inventory management and demand forecasting are also key. Excessive inventory can lead to increased capital tied up and warehousing expenses, while insufficient inventory can affect order fulfillment and customer satisfaction. Therefore, sellers should use inventory management tools and sales data to accurately forecast demand to ensure they have enough inventory to meet customer demand but not overstock.

Comparison between Amazon FBA warehouse and third-party overseas warehouse

Choosing the right cross-border warehousing service can not only improve customers’ shopping experience, but also save logistics costs for sellers. Amazon sellers can choose to send products to FBA warehouses or third-party overseas warehouses.

FBA warehouse features

• Prefer products with small size, high value and high quality.
• There are more stringent outer box labeling and product labeling requirements.
• The default is to separate warehouses, and it is relatively difficult for sellers to manage the warehouse direction of goods.
• It can bring more promotion support to the product, improve the ranking of the product and the chance of getting the shopping cart.
• Bad store reviews caused by FBA warehousing and logistics can be deleted.

Characteristics of third-party overseas warehouses

• A wider range of options is available, suitable for larger and heavier products.
• Providing finishing and assembly services.
• Generally, goods from the same seller will be centralized in one warehouse for management.
• You need to do your own promotion both inside and outside the site to increase the store’s exposure.
• The warehousing requirements of third-party overseas warehouses will not be as high as Amazon FBA warehouses [[2].

Advantages and challenges of third-party overseas warehouses

Advantages

1. A stable supply chain helps increase sales and improve the profit margin of a single product.
2. The use of centralized transportation greatly reduces the average freight cost of a single cargo and breaks through the limitations of cargo weight, volume and price.
3. Returns and exchanges are processed efficiently and conveniently, which helps reduce sellers’ losses and improve customer satisfaction and experience.
4. Generally, there are no platform restrictions. No matter which platform you sell on, you can use overseas warehouses.
5. The warehousing requirements are not high and we provide services of sorting and assembling products.

Challenge

1. There are stricter requirements for product selection and there is great inventory pressure.
2. Poor capital turnover can easily lead to a break in the capital chain.
3. Overseas controllability is poor and is greatly affected by uncontrollable factors such as local policies, social factors, customs and natural factors.

Conclusion

To sum up, when expanding into the international market, it is crucial to ensure that you choose the right overseas warehouse. By considering factors such as compliance, logistics efficiency, cost and inventory management, sellers can better make informed decisions for their Amazon US stores to achieve long-term success.

For novice sellers, when choosing a cross-border warehousing model, they must fully combine the attributes and positioning of their own products, and then make a choice based on the above pros and cons analysis. In addition, you can also consider a warehousing model that combines FBA warehouses with third-party overseas warehouses to improve efficiency and speed up the delivery of goods.

^{*Reference source: *}