How to Choose a Suitable China Fulfillment Center

China Fulfillment center’s allow e-commerce businesses to subcontract shipping and warehousing services. This spares them the challenge of finding appropriate storage for their inventory, which is especially helpful for start-ups and small-medium scale retailers. Retailers send their stock to the fulfillment center, and the company ships it to the customers.



How to Choose a Suitable China Fulfillment Center
How to Choose a Suitable China Fulfillment Center

Why use China fulfillment center

Manufacturing

China is the center of global manufacturing, and the country’s products are everywhere. You’ll find that most product labels, tags, and stickers say they are made in china. The country has a robust business ecosystem, few regulatory restrictions, low duties and taxes, and competitive currency policies.  

In China, industrial scale production does not occur on its own. Instead, it relies on chains of suppliers, component providers, government agencies, distributors, and clients who all play essential roles in the production process. Shenzhen, for instance, has emerged as a global hub for electronics manufacturing. 

It has developed an ecosystem that supports a lucrative electronics manufacturing supply chain. It includes component manufacturers, a skilled workforce, and assemble suppliers. American companies like Apple Inc. use this to their advantage, and there is no reason you can’t do the same for your business. If it is financially impractical to manufacture and source your components from the United States, Chinese manufacturers will help you do so at a cheaper cost. 

Global shipment

With a fulfillment partner in China, you can deliver to customers in other parts of the world at a reduced cost. China has an export tax reduction policy that enhances the attractiveness of its exports. China Fulfillment Center

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Dropshipping vs. Third-party fulfillment 

Dropshipping is a supply chain management tactic in which the seller doesn’t stock inventory but transfers customer orders and delivery details to either wholesaler, another retailer, or a manufacturer. In contrast, third party fulfillment (3PL) works as a go-between for the retailer and its customers. The retailer stocks merchandise to sell online and transfers it to the 3PL company.

The retailer also integrates its e-commerce system with the 3PL’s order fulfillment software, so once an order is received, the 3PL handles picking, packing, and delivery. Here we make a comparison between dropshipping and 3PL.



Dropshipping

Pros Cons
Fewer barriers to entry: Since there is no need to purchase large quantities of inventory at one go, the start-up capital requirement is lower than standard e-commerce operations. This makes it relatively easy to start an online business. Limited profitability: Bulk purchases often ensure considerable discounts. Consequently, the higher the quantity of stock bought at one go, the more you stand to gain. Since dropshipping allows you to buy a single product at a time, it cuts back on your profit margin.
Easy to establish: All that’s required is that you compute an agreeable profit margin, build an attractive e-commerce website, and market your products. Since you won’t have all the products on-hand, it will be easier to start and manage your business. Limited quality control: Dropshipping puts you at the mercy of your supplier. You won’t get control over inventory quality.
Limited overhead costs: Ecommerce supply chains can be expensive and tiresome. Retailers must supervise or personally handle packaging, shipping arrangements, and monitor transport. Drop shipping, makes things easier; the supplier or manufacturer handles product delivery. Limited inventory control: manufacturers often give direct customers more attention than third party requests. As a result, you have no guarantee that inventory will be available during holidays and shopping seasons.
Flexible: There is no need for a fixed center of operations. The drop shipping business model has no restrictions on location or operating lime. For instance, you can run a dropshipping operation in china while you are overseas. 

Third-party fulfillment

Third-party fulfillment comes with exclusive advantages that supersede drop shipping in many ways

Pros Cons
Inventory management: Third-party fulfillment offers increased control over inventory. You can inspect the quality of your merchandise, design custom packaging, and deliver it faster than traditional shipping. This will increase customer satisfaction, thereby leading to more sales You will lose the opportunity to develop order fulfillment skills and infrastructure within your organization. Since you’ll be handing order deliveries and packaging to a separate entity, your staff will not develop the skills and experience to manage these processes on their own. This may pose a challenge in the future when you want control over the entire product development cycle.
Unlimited inventory: With a third-party logistics partner, you can store vast inventory, often at a low cost. In fact, some 3PL companies offer free storage.
Flexible and scalable: A third-party company should allow you to use as much or as little space as required, depending on the size of your operation. This benefit ensures you have room for growth when you’re ready to expand your business.
Convenience and reduced costs:  At the start, Third-party fulfillment is more expensive than drop shipping. However, convenience and benefits lead to significant long-term returns. 



How to choose a good fulfillment company

It should be start-up friendly

You should seek a fulfillment partner that makes it easy for you to work with them. You don’t need to be an expert in logistics and order fulfillment; your fulfillment team should help you understand the options available for your business and advise you on the best possible course of action. 

Affordable

Nearly all new businesses/companies have to start somewhere, and for tech/e-commerce, it’s usually a basement or small office. Everything is hard in the beginning, and that is why you need an affordable fulfillment partner. The best fulfillment companies should offer incentives for start-ups, such as no minimum inventory requirements and reduced warehousing fees.

Professional crew

Order fulfillment will not work if you don’t have the skills and experience of a professional logistics management team to help you navigate the technical challenges of packing, international shipping, and delivery route planning. Your fulfillment provider must have a professional team to help you follow customs guidelines and choose the best shipping routes.

Customer support.

Your fulfillment partner’s approach to order fulfillment and customer support will determine consumer satisfaction and your business’s sustainability. That’s why you need a partner with excellent customer support. Mistakes and mix-ups are bound to happen. However, with a good support platform, these issues will be quickly resolved, leaving you with happy, satisfied customers. 

Sometimes, it is hard to trust a third-parties. Customer satisfaction has a significant effect on business sustainability and profitability. Since matters like delivery times, quality, and customer service affect profitability, it can be hard to entrust the responsibility to another company. That said, there is no need to worry. The advice shared in this article will help you find the right fulfillment company for your business. China Fulfillment Center