Strategies For Choosing a China Fulfillment Center

Mar 31, 2024 Chapter 5. Shipping

Many multinationals use China as a platform to launch new products into international markets because they can quickly produce large quantities of goods at very low prices.

However, it’s not just about price — choosing the right facility requires careful consideration of factors such as quality control, production time frame, regulatory requirements, product liability concerns, market access, language capability, transportation infrastructure, and more.

In this article, we will discuss strategies for choosing a fulfillment center in China and why China is the preferred location.

 

 

 

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.

In the eCommerce world, since the online store is integrated with OMS of the fulfillment center, in most cases is the order information will be synced to the fulfilment center automatically and shipped directly to the customer’s address. Some fulfillment centers have their own trucks and drivers who deliver the goods to the customer. Others use third party carriers such as FedEx, UPS, DHL, China Post and USPS etc.

 

 

 

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 your business to their door. It eliminates the need for you to pack, address, and send out each order yourself.

When you purchase something from Amazon, eBay, Etsy, or any other online retailer, you’re sending your order to a fulfilment center. Your 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:

  • 1) Receiving area – Items arrive here via trucks, trains, planes, etc. These items are received from manufacturers and sorted into their respective categories.
  • 2) Storage area – Here, items are stored until they are picked up.
  • 3) 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.

 

Costs:

3PLs typically charge a fee per item or per shipment based on how much work they perform. They usually charge a percentage of the total cost of each shipment. Some companies will charge a flat rate for every shipment regardless of size.

 

 

Some Examples of 3PL China Fulfillment Center:

  • Supplyia Consolidation/FBA
  • NextSmartShip
  • Fulfillmen
  • VHK LOGISTIC
  • Yue Shing Logistic Company
  • Kerry Logistics
  • CTSI Logistics (Honkong)
  • Everglory Logistics
  • Jiayou International Logistics
  • Fulfillment Bridge.

 

 

If you’re looking for a new fulfillment center for shipping products to amazon fulfillment center from China, you might want to look at their websites. Do they list all the different types of facilities and give you information on each one? Check out whether they have a website with information about the company.

 

 

 

Things to Look for when Choosing a China Fulfillment Center

When choosing a China fulfillment center, there are several things that you should consider. The most important things are:

  1. whether the facility has adequate room for growth. You may decide to expand your business if you think that you’ll be able to handle more volume than what you currently do.
  2. You also need to make sure that the facility has good infrastructure. It’s important that the facility has an efficient transportation system.
  3. Also, you should check to see if the facility has a clean environment. You don’t want to be transmitting diseases via your goods and products.
  4. Another factor to consider is the location of the facility. Is it close to your target market? Are there many competitors nearby? Will it be easy for you to transport your products to the facility?
  5. You should also consider the quality of customer service at the facility. Is it easy to reach someone who can answer questions?

 

 

These Are More Key Points to Look for When Looking for a China Fulfillment Center.

  • Technology – Does the facility offer modern technology like RFID tagging?
  • Logistics Services – Does the facility provide excellent logistics services? Can they handle your shipments efficiently?
  • Inventory Management – Does the facility manage inventory effectively? Are their systems efficient?
  • Pricing – How do they price their services? Is it competitively priced?
  • Reliability – How long has the company been operating? Have they had any issues?
  • Security – Do they use secure methods of handling your data?
  • Safety – Are they using safe practices in order to protect themselves and others?
  • Environmental Sustainability – Do they practice sustainable methods of operation?
  • Compliance – Do they follow all laws and regulations?
  • Reputation – What kind of reputation does the company have?
  • Service Level Agreement (SLA) – Do they guarantee a certain level of service?
  • Warranty – Do they offer warranties on their service?

 

Some Strategies for Choosing a China Fulfillment Center:

  1. Choose a location that has good access to major highways or railroads.

  2. Consider the proximity to major cities.

  3. Look at the availability of utilities such as electricity and water.

  4. Make sure you can get easy access to a nearby airport.

  5. Check out the local economy.

 

 

Shipping from China to Amazon FBA Directly- [Free Inquiry]

 

What is the difference between 3PL and fulfillment center?

The terms “3PL” and “fulfillment center” are often used interchangeably, and there is some overlap between the two. However, there’s a subtle difference in scope:

  • Fulfillment center: This refers to a physical warehouse facility that stores, picks, packs, and ships products for businesses. It’s a more general term encompassing the core functions of order fulfillment.
  • 3PL (Third-Party Logistics): This is a broader term that refers to companies that offer a wider range of logistics services beyond just order fulfillment. These services can include:
    • Warehousing and storage
    • Order fulfillment (picking, packing, shipping)
    • Transportation and freight management
    • Inventory management
    • Returns processing
    • Customs brokerage
    • Value-added services (e.g., product assembly, labeling)

 

Here’s an analogy:

Think of a fulfillment center as a kitchen. It’s where the core tasks of preparing and sending out orders happen (picking ingredients, cooking, packaging). A 3PL, on the other hand, is like a full-service restaurant. It includes the kitchen (fulfillment center) but also offers additional services like taking orders (customer service), managing deliveries (transportation), and even providing ingredients (sourcing).

In short:

  • Every 3PL company includes a fulfillment center. They offer fulfillment as part of their broader range of logistics services.
  • Not every fulfillment center is a 3PL. Some fulfillment centers might only focus on the core picking, packing, and shipping functions.

 

Here’s a table summarizing the key differences:

Feature Fulfillment Center 3PL (Third-Party Logistics)
Scope Warehousing and order fulfillment Warehousing, order fulfillment, and various additional logistics services
Services Picking, packing, shipping Picking, packing, shipping, transportation, inventory management, returns processing, etc.
Focus Core fulfillment functions Broader range of logistics solutions

 

 

 

China Fulfillment Center Conclusion

When choosing a fulfillment center China make sure that you consider all the above points. This way, you’ll be able to find a facility that meets your needs. You may consider supplyia FBA prep, to grow your business exponentially owing to its strong reputation and robust integration capabilities making it easier for you to fulfill orders.

As a product sourcing company, we believe our clients deserve the best. In addition to our proven technology-based solutions, we can help you connect with a reputable and reliable supplier. Get a custom quote from us today and get to work.

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