However, there is another business model to fulfill customers’ orders placed through online stores :dropshipping.

Dropshipping is an order fulfillment system in which a business completes orders by shipping from third parties (wholesalers and manufacturers) to buyers without overstocking.

How does dropshipping work

1. Deliver goods from the supplier and seller to the domestic warehouse;

2. Handled warehousing, checked packages, used logistics system to enable sellers to timely monitor and manage inventory, grasp and warn inventory, and also connected with ERP system used by sellers to synchronously manage orders and sales channels;

3. Sorting goods according to orders, and providing value-added services, such as labeling and changing labels, packaging and packaging, taking photos, testing, etc.; Arrange delivery afterwards;

4. According to the after-sales service requirements of the returned and replaced goods, secondary delivery or destruction treatment shall be carried out if the goods are restored and need to be processed.

The flexibility and convenience of third-party logistics 

Which types of e-commerce sellers need

1. Spontaneous cargo

For FBM self-delivery sellers, 3PL can solve the problem of timeliness and stability of delivery and distribution for sellers. Providing satisfactory delivery service for consumers is also one of the directions to improve the quality of store operation, but also to increase customer viscosity.

2. Lots of orders

Processing orders in large quantities is the strength of third-party logistics providers, which can not only save a lot of time costs for sellers, but also reasonably turn over storage inventory and provide high-quality logistics services.

3. Expand business scale

The expanding business scale requires the optimization of other aspects of service at the same time, and 3pl is an important pillar of the logistics link. Reduce or reduce the delivery of orders or logistics problems, caused by unnecessary losses and customer loss, is also the seller to expand the scale of business need to pay attention to.

As a powerful third-party logistics company, DM Fulfillment is a global order processing center that can quickly fulfill orders and deliver goods to overseas customers. After 13 years of experience in the logistics industry, DM’s warehousing capacity, order processing capacity, transportation services, and delivery level, cooperating with overseas local express delivery packages, can ensure that DM’s overall capacity can meet the current and future needs of sellers.

1. First-leg transportation costs: logistics costs incurred in transporting goods from domestic to destination warehouses according to different logistics methods;

2. Warehousing fees: services incurred when goods enter warehouses, including product testing, shelving and management fees; And the cost of holding goods in warehouses, usually based on the storage period and the volume occupied by the goods;

3. Delivery fee: According to the logistics system, when the order is pushed to the operating end of the warehouse, the warehouse provides a consignment service in time, and the logistics cost of the product delivered to the customer;

4. Value-added service fees: value-added services such as transit, labeling and replacement, return and exchange services, photography, and cargo detection.

Different from the cross-border logistics transportation

The third-party warehouse reduce the logistics cost

1.Low storage cost: compared with Amazon FBA, the storage cost of warehouse is relatively lower, so the product profit can be better guaranteed;

2.The use of warehouse timely replenishment for FBA (FBA transfer) : especially during the peak season, in order to timely match the surging market demand, the use of third-party warehouse replenishment for FBA inventory, not only can ensure the aging, but also reduce the international transportation costs caused by the peak season;

3.Standardize the return process to reduce the cost of return: sellers can use warehouses to retest and classify returned products from Amazon: for products with defects or quality problems, sellers can use warehouses for corresponding treatment; For products without quality problems, sellers can use warehouses to repackage, label and resell. This can save 80 percent of logistics costs compared to sending the product back to China from Amazon.

4.Overall transportation cost: choose the overall cost-effective warehouse service, bulk stock to warehouse in advance, sellers can avoid the peak season logistics costs rising period. On the other hand, due to the large quantity of goods, relatively preferential prices can be obtained to a certain extent.

The whole set of logistics and warehouse service system provided by DM is more perfect and mature, which mainly provides one-stop solution of cross-border e-commerce warehousing and logistics for e-commerce sellers. warehouse processing center covers European and American countries, for sellers to rapidly expand the market, is also an important service basis.

First of all, the transportation time is long, because cross-border e-commerce needs several stages, including domestic procurement, domestic transportation processing, international transportation, customs clearance, overseas local distribution and other links.

Then we need to know which link causes the overall cargo logistics transportation time to be too long.

Usually, what sellers can do is to deal with domestic goods and other links, and choose third-party logistics services in a faster and more convenient way. Compared with express delivery, the timeliness and stability are comparable, and the price is more suitable for most sellers.

How can third-party logistics providers provide convenient and fast global logistics services?

How can 3PL  provide convenient and fast services?

DM provides the service of global shipment

For example, the domestic warehouse of DM provides the service of global shipment, as well as basic cargo handling and value-added services.

The popularity of Temu, the cross-border platform of Pinduoduo, in overseas markets has also encouraged many sellers to look for safe and stable domestic logistics providers in order to timely expand the opportunity of overseas markets. With DM warehouse in Guangdong, SF Express can deliver goods to Temu’s Zhaoqing warehouse within 24 hours for sellers.

In addition, DM overseas storage covers countries such as the United States, Canada, Britain, Germany, France, Australia, etc., which can solve the needs of sellers for FBA head and transshipment, and also support sellers to prepare goods in advance and deliver goods to overseas consumers in time.

These steps and processes are aimed at solving the problem of long shipping times for Dropshipping and more cross-border sellers.

Due to the advantages of the geographical location of the warehouse, local delivery, compared with domestic delivery, greatly shortens the delivery time, but also reduces the operation time of customs clearance and clearance, and can save the cost of choosing the logistics method with higher price in order to improve the efficiency.

In addition, many third-party warehouses will cooperate with local distribution, which also speeds up the logistics timeliness of the whole process. For consumers, they also have better experience and trust in the logistics and transportation services provided by sellers.

II. After-sales treatment and store operation

III. Intelligent storage management

Generally speaking, the logistics system of the third-party warehouse is equipped with perfect process functions, including warehousing, inventory management, order management, package tracking, data analysis and so on.

Moreover, the logistics system can be connected with the cross-border platform, which also realizes the data sharing and convenience of use for these sellers.

In general, the service of warehouse is more comprehensive, providing integrated warehousing and distribution services, and the price is more in line with the cost calculation of sellers. Providing long-term and stable transportation of goods for sellers is also one of the service purposes of warehouse.

The third party warehouse refers to the transnational logistics mode in which enterprises export goods to the third party warehouse in batches according to the general trade mode to achieve local sales and distribution.

Different from self-built warehouses and FBA warehouses, the management right of self-built warehouses is in the hands of cross-border e-commerce enterprises or in cooperation with warehousing enterprises.

Establish and improve the external warehouse business by leasing or cooperating with other enterprises, and realize the construction and business improvement of the external warehouse.Leasing mode will generate operating costs, logistics costs and storage costs, while cooperative construction mode will only generate logistics costs.

If the FBA of Amazon is to be compared, many problems of warehouses can be communicated with customers in a timely manner. In terms of customs clearance, it can also provide customers with receiving goods and tariffs, and the price is much cheaper than FBA.

Generally speaking, the advantages of the third-party warehouse are as follows:

1. It helps increase profit margins on single products. According to eBay, the average price of goods stored in warehouses is 30% higher than direct mail.

2. A stable supply chain helps increase sales. Relevant data show that the sales volume of goods shipped from warehouses is several times higher than that of goods shipped directly from China in the same category.

3. The centralized transportation mode adopted by warehouses breaks through the restrictions of commodity weight, volume and price, which is conducive to expanding the variety of sales.And it can greatly reducing the average freight of a single commodity. For example, when the weight of goods exceeds a certain weight, there will be obvious cost advantage, which also effectively reduces the cost of logistics management.

4. Stable sales and more and better buyer feedback will improve the seller’s customer performance. Data on eBay shows that sellers who use warehouses tend to have higher rates of positive reviews.

Lack of third party warehouse? 

Through professional development, third-party logistics companies have pooled information networks and accumulated specialized capabilities for different logistics markets, including transportation, warehousing and other value-added services.

Through the integration of global logistics resources, third-party logistics provides sellers with multi-channel quality logistics services, and uses the mode of freight collection to greatly reduce unit transportation costs.

Using the global warehousing and distribution network and services, greatly shorten the delivery time, help customers improve the shopping experience, establish a brand image. Third-party logistics provides sellers with personalized services, develops customer-oriented, low-cost and high-efficiency logistics solutions, and creates favorable conditions for enterprises to win in the competition.

Third-party logistics companies have the ability to integrate key logistics information, such as air and sea freight quotes, domestic and international transportation volumes, international customs clearance documents, etc.

Because of the rich logistics resources of third-party logistics companies, it is flexible to obtain such information and provide corresponding prices and services. But for other non-logistics companies, getting this information can be expensive and difficult.

3. Intelligent information technology improves service quality

Some people think that the introduction of JIT mode is to reduce the inventory pressure on the platform, but from the perspective of the seller, in fact, the seller’s delivery time and processing speed is higher requirements.

Then the sellers play the JIT mode well, in fact, also improve their service quality and speed. It is obvious that the platform may therefore give traffic bias to JIT sellers and recommend quality vendors.

According to the cross-border platform Temu of Pin-Duo, merchants who are far away from Guangdong Province can either set up warehouses in Guangdong Province (such as partnering with other merchants) or choose third-party service providers such as Yuncang.

This provides different channel options for sellers to achieve the time requirements of delivery within 24 hours and delivery to the warehouse within 48 hours (the status of the inventory shows the delivery and receipt respectively).

DM domestic cloud warehouse in Guangdong play a strong advantage, can be used as Temu warehouse for the seller emergency stock, and for the seller to provide each batch of the first month free warehouse rent preferential, more than 12,000 square meters of warehouse area, for sellers to ensure sufficient storage capacity.

At the same time, DM has docking platform designated Shunfeng channel, delivery within 24 hours.

In addition, according to a series of warehousing rules formulated by Temu, the operation processing of DM domestic cloud warehouse also provides the sellers with great flexibility, including the operation of labeling, packaging specifications, etc., to achieve the same standard for JIT mode sellers as for ordinary stock mode.

Especially in the peak season may face the problem of warehouse bursting, domestic cloud warehouse has become a JIT mode, a cost and time optimal solution. It can not only ease the tension and control of the sellers on the timeliness and complex operation of logistics, but also let the sellers have more time and energy to turn to the product operation and marketing.

Finally, I also wish the sellers to adapt to the JIT mode as soon as possible and achieve great sales!