Once the Shopify orders growing day by day, the order fulfillment efficiency became very important to shopify sellers, from one side they need improve the order delivery speed, from another side they need to control the order fulfillment cost. For most Shopify sellers, it is a good choice to outsource the order fulfillment works to professional order fulfillment agent, basically there are 3 kinds of warehouse order fulfillment solutions, China warehouse, virtual warehouse overseas and warehouse in destination countries. In this article we will analyze the Pros and Cons of China warehouse, virtual warehouse, overseas warehouse for Shopify order fulfillment.
China warehouse order fulfillment
as the name suggested, the shopify orders will be fulfilled from China to clients overseas. The order fulfillment procedure listed below:
You can also check China 1688 Pick and Pack Order Fulfillment Procedure for Shopify Dropshipping in details.
Pros of China warehouse order fulfillment
1>Minimize inventory and reduce capital usage. You can wholesale hot sale goods and retail other goods to lower down goods stock;
2>Increase profits margin. Compared to Aliexpress, goods on 1688 is far more cheaper while the quality is the same, that means you can increase profits margin by wholesale the hot sale products from 1688;
3>Decrease order fulfillment cost. Although the human cost in China continually increasing, it is far less than the developed countries, you can save time and money by outsource the order fulfillment works;
4>Better for brand marketing. When you dropship from Aliexpress, your clients may often receive goods with promotional ads in the package, which will affect repeating purchase, the Chinese order fulfillment agent could help you customize label and packaging as well as promotional cards to help you continually marketing your store to attract repeating purchase.
Cons of China warehouse order fulfillment
1> Longer delivery time. The goods need to ship from supplier to agent warehouse then ship to clients overseas, the whole procedure takes long time if yo don\’t stock items in agent warehouse;
2> Chinese shipping label. Although the China order fulfillment agent could help you remove the promotional ad cards and labels, the shipping label still shown the goods shipping from China, which will affect the user experience;
Overseas warehouse order fulfillment
Similar to Amazon FBA, if your target clients located in the USA, then you apply the USA warehouse order fulfillment service. In this mode you ship the goods to 3rd party USA warehouse via air or sea. When clients order the goods, the USA warehouse will pack and ship directly to clients in USA. In this way the delivery time can be improved a lot.
The overseas warehouse order fulfillment fee includes: first leg shipping fee +warehousing fee and service fee+shipping fee.
Pros of overseas warehouse order fulfillment
1> Fast delivery. The order fulfillment only takes 2 to 5 days in different countries;
2> Increase customer experience and product exposure. Faster delivery also means better user experience, if you have other platforms in addition to Shopify, overseas warehouse could help you increase products exposure based on platforms rules for more traffics;
3> Less restriction on goods category. Owing to mostly goods imported to destination countries via sea, there has less restrictions on goods volume and weight as the shipping fee reduced; Which means you can extend the goods category in your store;
4> add on service. Faster goods return and exchange service will help you increase the customer satisfaction.
Cons of overseas warehouse order fulfillment
1> Goods stock. Once you applying overseas warehouse order fulfillment service, you need to stock goods to meet their requirements;
2> Financial pressure. If you have more goods categories the stock will face great financial pressure, meanwhile you need to invest more on marketing and ads, once the goods have large stock there will have great financial pressure;
3> Higher order fulfillment cost. The overseas warehouse charges on each service they provide such as warehousing, pick&pack, goods return and exchange etc.
4> Does\’t fit for new stores with unstable traffics. If you are new sellers and the store traffics is unstable, it has big risks.
Virtual warehouse order fulfillment
Virtual warehouse is an improvement way for overseas warehouse order fulfillment. It is also shipping from china but faster than China warehouse order fulfillment but cost is lower than overseas warehouse order fulfillment. Let\’s take USA market for example to check the virtual warehouse order fulfillment procedure:
1> Chinese virtual warehouse agent pick and pack then print USA second leg shipping label via ERP and stick on the package;
2>Consolidate the small packages into one big carton box and ship to USA warehouse via DHL, FedEx or UPS;
3>The agent will help you clean customs and deliver to USA warehouse;
4> The warehouse receive package and split small packages deliver via USPS;
Compared with China warehouse order fulfillment, due to the increase in the weight of the package, there will be a certain advantage in the price, but the delivery time is slightly slower than overseas warehouse. Compared ePacket shipping from China, because the head-end is express delivery, the timeliness has been greatly improved. It may take 10 to 15 days before, now it takes only 5-8 days.
Compared with the traditional overseas warehouse model, it saves the cost of purchasing and warehousing. It does not need to invest a large amount of funds in the early stage to place large quantities of goods in overseas warehouses, and it will not generate storage costs due to inventory backlog. The price is infinitely close to ePacket with higher service quality and local shipping advantages.
Pros of virtual warehouse order fulfillment
1> Local shipping label for better user experience. The tracking shown local shipping information, but the goods actually shipping from China with faster delivery compared to ePacket;
2>Save purchasing， inventory and warehousing cost. There is no need for up-front input costs for large-volume purchases of goods placed in overseas warehouses, and there will be no storage costs due to inventory backlog;
3>Increase average sales. Since the goods tracking are initially displayed as local shipping info, the customer can increase the selling price of the product and increase the profit;
4> Reduce uncontrollable risks. Such as: pre-investment cost risk, overseas unsalable risks, and risks arising from changes in platform policies.
5> Reduce delivery time. Compared to shipping from Aliexpress or China order fulfillment warehouse, the virtual warehouse order fulfillment could greatly reduce package delivery time.
Cons of virtual warheouse order fulfillment
1>Virtual overseas warehouses do not have the real recognition of the platforms such as Amazon and eBay, but it is suitable for Shopify;
2>Slower transportation time and high logistics cost are not conducive to improving the shopping experience of consumers compared to overseas warehouse order fulfillment.
With the virtual overseas warehouse order fulfillment, there must be other advantages or risks in the actual operation process, each Shopify seller should make judgments according to their actual situation. Currently the mainly virtual warehouse order fulfillment service are available for USA, Canada, UK, Germany, France and other EU countries.
The above are the Pros and Cons of China warehouse virtual warehouse overseas warehouse for Shopify order fulfillment, as a Shopify seller you may know which order fulfillment way is the best for you, if you are planning to outsource the order fulfillment works, please feel free to contact 86Deal with your requirements in details.