Strategies For Choosing A China Fulfillment Center
China is the world’s largest manufacturing hub and has maintained its’ status for 12 straight years. The country offers a wide range of advantages to companies that choose to make their products in China, including low-cost labor, advanced technology, English proficiency, and proximity to markets.
In addition, 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.
Table of Contents
What is a Fulfillment Center?
A fulfillment center, also known as an order fulfillment center or distribution center, is a warehouse that receives products from manufacturers 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.
The term “fulfillment” implies that the entire process takes place within a single location. However, many fulfillment centers are actually located at several different sites. In some cases, these locations may be miles apart.
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.
The main purpose of a fulfillment center is to receive goods from manufacturers and ship them to retailers. This means that the items must be stored until they are ready to be shipped. It’s important to note that not all fulfillment centers do this type of work. Some only handle inventory management tasks such as tracking orders and managing inventories.
Types of China Fulfillment Centers
Generally speaking, fulfillment is a comprehensive solution, and a decent logistics center should be able to help you with every logistics process you deal with in your eCommerce company. However, some companies are strictly focused on specific sectors and product types.
We can indicate four major subtypes of fulfillment centers:
- Clothing fulfillment companies (they usually deal exclusively with clothing and fashion products)
- Fulfillments companies that provide services for online retailers.
- Bookstores and magazine stores that sell used books and magazines. These companies often provide additional features such as advanced printing options).
- Fulfill orders from food manufacturers and have warehouses fully equipped for storing food items such as refrigerated storage units, for example.
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.
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
- 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, 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.
Why Do You Need a China Fulfillment Center?
China has remained the world’s largest manufacturer for the twelfth consecutive year, with industrial output rising by 3.1 percent last year to reach $4.8 trillion.
According to statistics released by the Chinese government, China’s manufacturing sector accounts for almost one third of the world’s total manufacturing output. From 2016 to 2020, the average annual increase in the added values of the high-technology manufacturing industries is expected to be 4.9%, which is higher than the average annual increase in industrial added values.
The added values of the IT services and software industries are expected to grow from 1.8 trillion yuan to 3.8 trillion yuan, and their share of GDP is expected to rise from 2.5% to 3.7%.
China has an advanced logistics industry. Because of its well-developed eCommerce platform, China’s domestic transportation is one of the quickest. Its top-notch intelligent logistics system can easily deal with tens of millions of parcels per annum.
In addition to transporting goods manufactured in China to the rest of the globe, there are numerous international shipping services from China to other nations. Apart from DHL, FedEx and different multinational delivery corporations, there are lots of freight forwarding companies and dedicated cargo carriers. If your items are huge in quantity or size, you may also decide on superior quality and inexpensive transport solutions. China’s benefits in the logistics sector are unparalleled to any other nation.
China also has an advanced logistics industry. Because of its well-developed eCommerce platform, China’s domestic transportation is one of the quickest. Its top-notch intelligent logistics system can easily deal with tens of millions of parcels per annum.
In addition to transporting goods manufactured in China to the rest of the globe, there are numerous international shipping services from China to other nations. Apart from DHL, FedEx and different multinational delivery corporations, there are lots of freight forwarding companies and dedicated cargo carriers. If your items are huge in quantity or size, you may also decide on superior quality and inexpensive transport solutions. China’s benefits in the logistics sector are unparalleled to any other nation.
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 thing is 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.
You also need to make sure that the facility has good infrastructure. It’s important that the facility has an efficient transportation system. 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.
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?
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?
The Following are Some Strategies for Choosing a China Fulfillment Center:
- Choose a location that has good access to major highways or railroads.
- Consider the proximity to major cities.
- Look at the availability of utilities such as electricity and water.
- Make sure you can get easy access to a nearby airport.
- Check out the local economy.
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 NextSmartShip, 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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