As e-commerce continues to grow and expand globally, the decision to choose between China fulfillment and US fulfillment services becomes more critical for brands looking to expand their markets. Shipping from China can offer cost savings, efficiency, and flexibility, but it’s important to consider the freight costs, varying shipping methods, and potential customs fees. In this article, we will compare the benefits and drawbacks of China fulfillment and US fulfillment services to help you make an informed decision.
Pros and Cons of Shipping and Fulfilling from China
Shipping from China allows for a significant reduction in inventory risk and cash flow compared to traditional models. In general, a middle-scale eCommerce company will only need 1,500 units of inventory needed upfront instead of 27,000 units using the traditional US fulfillment models combining ocean freight and US warehousing. Shipping from China allows for shorter lead times and more flexibility in scaling up, as opposed to US fulfillment, which may result in lost sales and longer wait times for inventory replenishment.
Pros of using China fulfillment:
- More efficient shipping
- Lower inventory risk
- Lower warehousing cost
- Lower packaging cost
- Faster delivery time to Asia consumers
Cons of using China fulfillment:
- Longer delivery time to US local consumers
- Potential global logistic disruptions may cause more delivery time in general
- Harder to control product quality
Cost and Time Comparison
Shipping from China may offer potential benefits in terms of cost and time compared to US fulfillment options. Still, it’s essential to consider freight costs, varying shipping methods, and potential customs fees.
Comparing a made-in-China product weighted 0.1KG and the buyer located in US:
|US Fulfillment||China Fulfillment|
|Transportation means||Ocean Freight||Worldwide carrier options|
|Delivery time to customers||~2 days with local express delivery||3 – 12 days from China|
|Delivery cost to customers||from $10 via USPS||from $5|
|Warehousing cost||Generally higher in US||Generally lower in China; You can further optimise the cost by speeding up the product delivery time from the factory to the China fulfillment center|
|Packaging cost||Generally higher in US||Lower in China|
Spaceship’s standard shipping option takes around 7 – 12 days direct to consumers using a combination of air carriers and local postal services, and the costs can be cheaper than US fulfillment combining ocean freight, 60 – 90 days storage fee, and local delivery costs.
China Fulfillment vs. US Fulfillment
Shipping from China can be cheaper and more efficient than using US fulfillment services, resulting in more savings and the ability to open up global markets. Shipping from China can result in more savings, but you need to consider lead times and customs fees. Shipping directly from China can be cheaper than US fulfillment services due to lower customs fees, flexible options, and shorter shipping times while avoiding additional warehousing and receiving fees. Shipping from China has become more efficient and cost-effective in recent years, allowing for fast and consistent delivery to the US in as little as five to ten days, and it is not limited to dropshipping.
Most of the dropshippers no longer engage in traditional dropshipping and instead control their own stock, with some also receiving assistance in sourcing and developing products. China fulfillment offers flexibility and cost benefits, leading to an increasing number of brands shifting from US fulfillment to China fulfillment, with no drawbacks. Fulfilling from the US first is beneficial for fast shipping and during supply chain disruptions, but there are certain products that cannot be shipped from China, so the decision doesn’t have to be one or the other.
Spaceship provides the best alternative to dropshippers who are looking for evolving their dropshipping businesses to more sustainable eCommerce businesses. Personalized packaging and marketing inserts can help them build the brand quickly and cost-effectively. They can also update their packing rules at any time, anywhere with just a few clicks in order to align their sales and marketing strategy.
Connect with Spaceship Fulfillment.
Get 30 days free storage when you book demo.
Mixed Model of US and China Fulfillment
Consider offering a mixed model of US and China fulfillment to provide the best options for customers expanding their markets internationally. Investing in US or local fulfillment is not necessary unless you are doing high volume and can consistently send containers to your local 3PL. Ship from China in bulk to get the best average cost, use a China fulfillment center as a backup plan, and consider shipping directly from China to other parts of the world for cost savings.
eCommerce owners can separate US and international orders by using different fulfillment centers and notifying the customer when stock is available. Set different shipping options in Shopify, prioritize working with a fulfillment center in Shenzhen for efficient international shipping from China, and communicate product details with the Chinese fulfillment center. Send a sample to your fulfillment center before shipping to avoid surprises, ensure they have a real warehouse, an efficient receiving process, and understand different shipping methods to effectively communicate with customers.
In conclusion, shipping and fulfilling from China may offer cost savings, efficiency, and flexibility for e-commerce brands expanding their markets internationally. While there are potential benefits to using China fulfillment services, it’s essential to consider freight costs, varying shipping methods, and potential customs fees. A mixed model of US and China fulfillment services may provide the best options for customers looking to expand their markets internationally. By prioritizing communication with your fulfillment center and considering your specific needs, you can make an informed decision about whether China fulfillment services are right for your e-commerce brand.