China is a popular location for multinationals to launch new products into international markets due to its ability to quickly produce large quantities of goods at low prices. However, choosing the right facility requires careful consideration of several factors, such as quality control, regulatory requirements, market access, and transportation infrastructure.
In this article, the strategies for choosing a fulfillment center in China and why China is the preferred location will be discussed. The article will cover the definition of a China fulfillment center, the types of centers, and how they operate. Additionally, the article will provide key points to look for when choosing a China fulfillment center and strategies for making the best choice.
Key Takeaways
- China is a popular location for multinationals to launch new products due to its ability to quickly produce large quantities of goods at low prices.
- Choosing the right fulfillment center in China requires careful consideration of several factors, such as quality control, regulatory requirements, market access, and transportation infrastructure.
- When choosing a China fulfillment center, it is important to consider the types of centers available, how they operate, and to have a clear strategy in place.
What is a China Fulfillment Center?
A China fulfillment center, also known as an order fulfillment center or distribution center, is a warehouse that receives products from manufacturers in China and then ships them to retailers and customers for sale. The process of receiving the product, storing it in the warehouse, and shipping it out to retailers can be done by one company or by multiple companies working together.
Types of China Fulfillment Centers
China has a variety of fulfillment center types that cater to different business needs. Some common types of China fulfillment centers include:
-
Third-Party Logistics (3PL) Providers:
These are independent logistics companies that offer warehousing, order processing, and shipping services. They are often used by businesses looking to outsource their logistics and supply chain operations. Like shipping from China to Amazon FBA directly.
-
Cross-Border E-commerce Fulfillment Centers:
These fulfillment centers specialize in handling international e-commerce orders. They are equipped to manage customs clearance, currency conversion, and international shipping.
-
Traditional Warehouses:
These are standard storage facilities that can be used by businesses for storing goods. They may not offer specialized e-commerce services but can be suitable for businesses with straightforward storage needs.
-
Bonded Warehouses:
Bonded warehouses are authorized by the government to store imported goods without paying customs duties until they are sold. This can be advantageous for businesses importing goods into China.
-
Temperature-Controlled Warehouses:
These specialized fulfillment centers maintain specific temperature and humidity conditions to store products that are sensitive to environmental factors, such as food, pharmaceuticals, and cosmetics.
-
Dropshipping Centers:
Some fulfillment centers in China offer dropshipping services. They hold inventory and fulfill orders on behalf of e-commerce businesses, allowing them to ship products directly to customers without handling inventory themselves.
-
Crowdsourced Fulfillment:
This is a newer model where individuals or small businesses offer their storage space and shipping services to e-commerce businesses. It’s a cost-effective way to access storage and shipping resources.
-
Direct-to-Consumer (DTC) Fulfillment Centers:
These centers cater to businesses focused on selling their products directly to consumers. They often integrate with e-commerce platforms and offer personalized packaging and branding options.
-
Multi-Channel Fulfillment Centers:
These fulfillment centers are designed to handle orders from multiple sales channels, including e-commerce platforms, marketplaces, and brick-and-mortar stores. They provide a centralized solution for managing orders from various sources.
-
Specialized Fulfillment Centers:
Some fulfillment centers specialize in specific industries or niches, such as fashion, electronics, or health products. They may offer services tailored to the unique needs of those industries.
How Does a China Fulfillment Center Operate?
A fulfilment center is a third party company that handles the logistics required to get orders from businesses to their customers. It eliminates the need for businesses to pack, address, and send out each order themselves.
When customers purchase something from online retailers, such as Amazon, eBay, or Etsy, they are sending their order to a fulfilment center. The order is packed up and sent to the warehouse where it is sorted into boxes based on its destination.
China Fulfillment Centers usually have three major areas:
-
Receiving area – Items arrive here via trucks, trains, planes, etc. These items are received from manufacturers and sorted into their respective categories.
-
Storage area – Here, items are stored until they are picked up.
-
Pickup area – Items are picked up by customers and delivered to their homes.
Other fulfillment center key sections are as follows:
-
Delivery area – This is where the orders are delivered.
-
Warehouse – This is where the products are stored until they need to be picked up or shipped.
-
Transportation system – This is how the items get from the warehouse to the pickup area and/or delivery area.
-
Customer service – This is where customers can find answers to questions about their orders.
-
Order processing – This is where orders are processed and payments made.
-
Packaging – This is where packaging materials are prepared for shipping.
-
Shipment – This is where the packages are loaded onto trucks and transported to the retailer.
Outsourced third-parties, known as 3PLs, fulfill orders for retailers by handling the logistics of shipping and receiving products from manufacturers. This includes receiving customer orders, processing them, stocking products, managing inventory, shipping, and warehouse operations.
Some examples of 3PL China Fulfillment Centers include:
-
Supplyia Consolidation/FBA
-
NextSmartShip
-
Fulfillmen
-
VHK LOGISTIC
-
Yue Shing Logistic Company
-
Kerry Logistics
-
CTSI Logistics (Hong Kong)
-
Evergl
Things to Look for When Choosing a China Fulfillment Center
When selecting a fulfillment center in China, it is important to consider various factors to ensure that the facility can meet your business needs. Some of the key points to look for when choosing a China fulfillment center are:
These Are More Key Points to Look for When Looking for a China Fulfillment Center
Technology
One of the most important things to consider when choosing a China fulfillment center is the technology that the facility uses. Modern technology like RFID tagging can help to improve the efficiency and accuracy of order fulfillment processes.
Logistics Services
The logistics services provided by the fulfillment center should also be considered. It is important to ensure that the facility can handle your shipments efficiently and provide excellent logistics services.
Inventory Management
The facility should have efficient inventory management systems in place to ensure that your products are managed effectively.
Pricing
Pricing is another important consideration when choosing a China fulfillment center. It is important to compare the pricing of different facilities to ensure that you are getting competitively priced services.
Reliability
The reliability of the fulfillment center is also an important factor to consider. You should look into the company’s operating history and whether they have had any issues in the past.
Security
The facility should use secure methods of handling your data to ensure that your business and customer information is protected.
Safety
The fulfillment center should also use safe practices to protect their employees and your products.
Environmental Sustainability
Environmental sustainability is becoming increasingly important in business operations. You should consider whether the facility practices sustainable methods of operation.
Compliance
The fulfillment center should follow all laws and regulations to ensure that your business is in compliance with local and national laws.
Reputation
The reputation of the company is also an important consideration. You should look into the company’s reputation to ensure that they have a good track record.
Service Level Agreement (SLA)
The fulfillment center should guarantee a certain level of service through a Service Level Agreement (SLA).
Warranty
The facility should offer warranties on their service to ensure that you are protected in case of any issues.
Some Strategies for Choosing a China Fulfillment Center
Choose a Location with Good Access to Major Highways or Railroads
Choosing a location that has good access to major highways or railroads can help to ensure that your products can be transported efficiently.
Consider the Proximity to Major Cities
The proximity to major cities should also be considered when choosing a fulfillment center. Being close to major cities can help to improve the efficiency of order fulfillment processes.
Look at the Availability of Utilities
It is important to ensure that the facility has access to utilities such as electricity and water.
Make Sure You Can Get Easy Access to a Nearby Airport
Easy access to a nearby airport can help to ensure that your products can be transported quickly and efficiently.
Check Out the Local Economy
The local economy should also be considered when choosing a fulfillment center. A strong local economy can help to ensure that the facility has access to a skilled workforce and other resources.
China Fulfillment Center Conclusion
When selecting a fulfillment center in China, it is essential to take into account all the factors mentioned above. This will enable you to locate a facility that caters to your specific requirements. Supplyia FBA prep is a reliable option that boasts a strong reputation and seamless integration capabilities, making order fulfillment a breeze. As a product sourcing firm, Supplyia is committed to providing its clients with the best possible solutions. In addition to their proven technology-based solutions, they can also help you connect with trustworthy suppliers. Contact them today for a personalized quote and start growing your business.