Are you looking for a China warehousing and fulfillment service that offers you the flexibility to stock products from manufacturers in China and ship to overseas customers? Hopefully our guide on China fulfillment center will help you know better whether it’s necessary to outsource to a China fulfillment center or not.
What’s Fulfillment center?
Fulfillment, also referred to as order/product fulfillment, is a process whereby service providers (fulfillment centers) fulfill the obligation to store, pack and ship the goods to addresses provided by sellers or e-commerce merchants.
Sellers or e-commerce merchants can ship their products directly from factories in China to the fulfillment center, then ship to their customers. A great number of China fulfillment centers are integrated with online marketplaces like EBay, Amazon, Shopify, making it simply a breeze to manage delivered orders and inventory.
Benefits of China fulfillment center
There’s a great number of benefits why importers should choose fulfillment centers.
- Lower costs than renting warehouse
Compared with renting warehouse that costs a fix rate per month, many China fulfillment centers don’t charge warehousing fee if your order quantity reaches the minimum quota, while there’re few fulfillment centers that charge a minimum amount per month if the orders fail to meet the minimum requirement. Even though, the minimum fee charged by China fulfillment center is much less than the renting fees of warehouse in western countries.
- Less costs of packaging materials
While you’re buying in bulk the packaging cartons, paper and other materials from China than in your country, definitely you save a lot.
- You don’t have to hire warehousing staff
Hiring warehousing staff does not merely mean paying salary, instead, it involves insurance, allowance, accounting, setting up a Chinese company, etc.
- You don’t have to invest a lot in stocks
With a local warehousing and fulfillment center, you don’t have to order a large quantity at one time, instead, you can order in different small batches, once the products sell well then start to order another batch. Anyway, shipping within China from your manufacturers’ addresses to your fulfillment center usually takes 1-3 days. This, in particular, is vital for startups testing various products at beginning stage.
- You don’t have to pay for import taxes
It’s a rule of thumb while you import usually you have to pay import taxes depending on regulations of the destination countries. With a China fulfillment center, all the products are shipped to the end customers. For retail orders with small commodity value, in general neither do the end customers have to pay for taxes.
- You can focus more on sales and marketing
An outsourced China fulfillment center can save all the hassles of receiving goods, packing, shipping, etc, you have more time to spend on value creating works like marketing, branding, innovation, scaling, etc.
The procedures of fulfillment centers:
- Sellers or their suppliers in China ship the products to the fulfillment center.
- The fulfillment center receives the goods and store in the warehouse. Some fulfillment centers also offer value-added service like quality inspection, repack, etc.
- Customers place orders to the sellers usually on e-commerce marketplaces or the sellers’ websites.
- The fulfillment center picks, packs products, and ships them to each individual customer.
- The fulfillment center also handles returns.
Frequently asked questions about China fulfillment center:
- Why not just ask the suppliers to ship for you?
Expertise – Most China factories don’t have the expertise to handle international logistic.
Personnel – Neither do they have staffs to take care of the individual shipping every day.
Costs – Even your China factories agree to drop ship for you, the prices tend to be higher than outsourcing to fulfillment centers.
There’re some China wholesalers specializing in drop-shipping products, however, the chances are, you have uncountable competitors selling the same goods online. It’s almost impossible to stay ahead of the rat race or earn a nifty profit.
- Will the end customers pay for import duties and taxes?
It used to be a common practice that importers buy in bulk goods from overseas, pay import duties and taxes, then sell domestically. Fulfillment centers are now taking evolutionary changes as products are shipped individually and directly to the end customers.
The difference is while importers bring in a large quantity of goods for commodity purpose (B2B), taxes are usually applied to these products. However, while shipping piece by piece to the end customers and declare the goods as personal use (B2C), usually no taxes are involved for low value products or a small value of taxes would be applied depending on certain circumstance and the regulations of destination countries. Take EU as example, less than 10% of all incoming B2C shipments would be taxed. In most cases, with an outsourced China fulfillment center, usually the transaction is completed without any import taxes paid by the end customers and sellers.