Michael Boarer is CEO at Profulfilment, who unsurprisingly do fulfilment. However they specialise in fulfilment from China and today he’s got some tips to save time and money, for instance the tip that made me prick my ears up was potentially delaying the VAT bill to aid cash flow! Anyway, I’ll hand over to Michael to explain more:
Hi, I’m Michael from ProFS and I know lots of you import goods from China. I’m sure along with cost of delivery one of the main questions you get asked about is speed of delivery. Getting your product to the consumer is, and will always be, one of the top five factors in the success of any online retailer.
You are probably undertaking your own warehousing and order fulfilment and this article shows how by using a 3rd party fulfilment company you can achieve consumer’s satisfaction and save money, particularly as we approach the peak season.
1) Choose the best strategic location
Using a 3rd party warehouse provider means you can choose the best strategic location to warehouse your goods in the UK or Europe, If most of your consumers are in UK then a UK warehouse is ideal, if they are in France and Germany a European centre puts your products closer to the end consumer. This can result in lower postage costs whilst improving delivery times.
2) Outsource for benefit
Outsourcing the warehouse not only removes the warehouse lease costs from your profit & loss but also lower costs to pick and pack and reduced IT systems costs, not to mention time and cost to employ extra staff at peak season. Holding stock in a European warehouse particularly suits low value, fast-moving lines and high-demand items, particularly at peak season. A 3rd party will also be able to provide you with a high quality returns service.
3) Reduce your costs and improve cashflow
Once you have the right warehouse location the freighting of goods from China to Europe can be via air (2-5 days) or sea (25 days). A 3rd party provider will reduce your freight charges and manage all of the freight handing and customs import formalities releasing you from that headache.
If your outsource provider has a bonded warehouse you can significantly improve your cashflow e.g. delay your quarterly VAT payment for several months and reduce your sales taxes, particularly if goods are low value and moving across borders.
4) Send higher value goods direct from China
Shipping goods directly from China using a local fulfilment provider, perhaps in downtown Shenzhen, or a drop ship partner is best suited to higher value products for several reasons. It warrants use of a more expensive express service (approx $20+); shipping times are well within a realistic 7 day maximum for customers to receive the item and you do not need to hold stock in a UK or European warehouse.
5) Limitations of sending directly from China
Sending low value goods can potentially be a good option for slower moving lines or new lines that are unproven, but it is not without its downsides if cheaper postage services are used, typically $5 – $10 using China Post. At peak season the quality of service drops off– quite simply, higher demand causes all of the space on cargo planes to be filled up, which can lead to a decrease in customer satisfaction!
Help is on hand
As is often the case, selecting the correct approach will depend on your priorities. Help and guidance on choosing the right option is available from global companies such as ProFS who specialise in the end-to-end shipping of goods from China to consumers on behalf of online retailers.
