September 26, 2019

Choosing Your Logistics Solution for Cross-Border E-Commerce in China



China have their own set of unique regulations and charges for all imported goods.

The import logistics system is refined into Direct Mail, Bonded Warehouse and Global Fulfillment Center (GFC). This blog will introduce the mainstream import model used by e-commerce in China.

Reviews of importing system

Direct Mail
Direct mail is a logistics method which exists from the start of E-commerce. The solution is often used by small and medium sized companies when they start doing E-commerce in China. If there is an order, the package is sent directly from the foreign country to the buyer (consumer). The whole process of logistics information is recorded, and the buyer can rely on the quality and safety from the logistics policy. Customs clearance has certain tax risks, and the quality of after-sales service is difficult to guarantee. 

Advantages:

The logistics information is transparent throughout the process. First, domestic orders are generated and then purchased abroad. There is no intermediate link and the product has high trust, quality is guaranteed, and there is no backlog of funds.

Disadvantages: 

1. Slow timeliness 

2. Higher logistics costs 

3. Relatively low profit margins. Because of higher costs.

Bonded Warehouse
Bonded warehouse offers several advantages to cross-border e-commerce businesses. To name them, the bonded warehouse offers a shorter distance between the product and the consumer, thus shorter delivery time and higher customer satisfaction. Businesses using bonded warehouse can easily transport revenue to foreign bank accounts, and no local business entity is necessary. This logistic solution is suitable for brands testing new products by stocking a small to the medium batch in a bonded warehouse to avoid high risk of losses due to relative high investment in stocks.

It is a kind of logistics scheme used by large and medium-sized e-commerce sellers. The sellers send goods in bulk in foreign countries to the bonded area by means of container transportation. Finally, they enter the bonded warehouse under the supervision of the customs. After the order is generated by the customer, they are directly sent from the warehouse to the consumer. The warehouse carries out the operation process such as sorting, packing, customs clearance and delivery according to the order information. The logistics information starts from the bonded area and they have a formal customs clearance process, pays taxes, and the overall time is relatively fast.

Global Fulfillment Center (GFC) in Frankfurt

Due to its special geographical location and policy, its function is similar to bonded warehouses, but it is more abundant than bonded warehouses. It also requires sellers to stock up to Frankfurt Warehouse and then operate according to the generated orders. However, the processes for entering the warehouse are simple, the Chinese customs may have lower control for the overseas warehouse.   Cost is higher than entering into the bonded warehouse in China, but it is easier to ship products because the warehouse is located in EU. 

Source: 

https://zhuanlan.zhihu.com/p/36443065