Overseas Warehouse: a new method to facilitate cross-border e-commerce

With the rapid development of cross-border electricity business recently, more and more overseas warehouses appeared ιn the market.So, what is an overseas warehouse?

In general, an “overseas warehouse” refers to the establishment of overseas storage facilities. In cross-border e-commerce, the overseas warehouse refers to the domestic enterprises who transport a large number of goods to the target market countries before the order comes. A warehouse locally established warehouse is created, in order to store goods, and then according to local sales orders, the merchants can react directly. The local warehouse satisfies desires of cross-border e-commerce merchants; they can directly process orders, sorting, packaging and delivery locally.

There are so many reasons for the rise of overseas warehouses. In fact, it will become the inevitable trend of the development of logistics industry. In online shopping it’s very common to see the return and replacement of a product to the local merchants. But it’s very difficult to maintain after-sale rights and interests, when the deal is accomplished by a cross-border merchant. The cost of sending the product back to where it belongs is too high and it also takes too much time on its way. How to solve this problem? It seems like the overseas warehouse can solve this problem perfectly.

What are the advantages of using an overseas warehouse?
First of all, it can reduce logistics costs. A shipment from an overseas warehouse costs far lower than an international parcel. For example, it costs 55€ to send a 7kg parcel to China from France, but costs only 6€ in China. Secondly, it can shorten the transport time and avoid clearance in the Customs, in order to achieve the purpose of speeding up the effectiveness of logistics. Furthermore, it can improve customer experience and satisfaction, as not all the received products can make the customer happy. In this case, the customer may request for return of a product or even ask for a replacement. With the help of the overseas warehouse, the merchant can react immediately and find a solution for the customer. Finally, it’s good for opening up the market in foreign countries, because the overseas warehouse can be recognised and appreciated by foreign buyers. On the other hand, if the seller pays attention to buzz marketing, they will not only obtain the recognition of buyers in the local level but they will also accumulate more resources to expand the market and the potential realm for sale.

Undoubtedly, the overseas warehouse is also a double-edged sword, as it should be. It has its own shortcomings. Merchants should have to pay for the construction costs or the rent for the warehouse and sometimes it can be expensive, depending on the country one may choose. Moreover, the overseas warehouse requires the seller to have a certain amount of inventory, and therefore it would not be suitable for a merchant who sells customised products.

Source: here and here

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