First and foremost: I send over 10k packages per year, world-wide, from China - from several eCommerce stores, and also from crowdfunding campaigns.
This is a long post. If you’re looking for a quick answer:
Visit: China Fulfillment - Warehouse Expert - it answers your questions in depth.
Contact Victor at SPNS (team@spnslogistics.com) - my recommendation.
I’ve tried four of the most popular China-based shipping providers (SendFromChina, Floship, Shipwire, SPNS) - so am in a position to provide feedback based on them all.
Secondly, I'll try to be as in-depth as possible, to provide a solution for the 'best' and 'most economical' possible.
Price and market position are certainly important factors when considering alternative eCommerce providers. However, decision should not be based on price alone.
As an eCommerce merchant, your business model is to deliver a product to a customer, as quickly as possible. As such, your fulfillment partner is key to your customer's satisfaction, your company's reputation, and the success of your entire business.
There are fixed costs in eCommerce fulfillment: paying workers, paying rent, paying packaging, paying logistics companies. At some point, a lower price means you are removing service. Removing service means removing customer satisfaction. Likewise, paying an unreasonably high price will also impact your customers: higher product cost, more expensive shipping, and ultimately less income.
The key is finding a middle ground: define the features that are important to your customers, and find the fulfillment partner that provides these features with the most competitive price.
Moving on to your answer:
I think you can automatically ignore Hong Kong based solutions.
Hong Kong is expensive. It has the world’s most expensive real estate, and much higher wages than China. You pay for this premium.
Furthermore, Hong Kong based providers use third-party warehouses. This means you’re paying a premium on an already premium price - and your packages have longer processing times, as they’re processed in two systems (your fulfillment partner, and then the warehouse)
Finally, if you’re manufacturing in China, Hong Kong warehouse can be exceptionally dangerous. There is a free-trade agreement for China to Hong Kong, but not between Hong Kong to China. This means that if you ever need to re-ship goods back to your factory for reworking / repairs / reprocessing - you will have to pay 17% import duty even though the products were made in China.
For reference, Hong Kong based providers that use third party warehouses:
- Floship
- Zhenhub
- Shipwire
Prices from these suppliers are without exception 30 - 50% more expensivethan a China based provider - and have slower processing times.
China Based Providers
Now we’re back in China, we’ve just saved 30 - 50% - we’re onto the “cheapest” solutions.
You mentioned “seamless” as an important - and you’re right - it’s vital.
If you chose incorrectly here, it may cost up to 15% of your profit.
Logistics and delivery are highly complex mechanisms. Customers change address, or miss deliveries. Planes get delayed. Packages get lost. All in all, between 3 - 8% of deliveries will have some type of problem; 95% can be resolved with intervention.
Delivery problems fall into two categories:
- Resolvable with intervention
- Unresolvable with intervention It is vital that your eCommerce fulfillment partner provides support for both situations.
Resolvable with intervention
In many instances, packages are 'undeliverable' due to a mistake in the address. This typically means that the package will have already arrived in the destination postal office, not far from the customer - and just needs a correction. Most shipping partners will allow for address updates and one re-delivrey attempt.
Typically the window to update the address and redeliver is small - and shippers will only accept updates from the sender: the warehouse.
A quality fulfillment partner will resolve these issues on your behalf - by contacting the customer and contacting the shipping company.
Unresolvable with intervention
Sometimes, a package cannot be delivered - typically due to loss or destruction. In this instance, insurance can be claimed against the courrier. However, insurance levels depend from shipper to shipper, and claims can only be initiated by the sender - ie, the warehouse.
Unless your logistics partner initiates and follows insurance claims on your behalf, purchasing insurance will simply cost your more money.
Each eCommerce fulfillment provider will have processing and delivery times, ie: orders processed within 6 -24 hours, 6 days per week. As an eCommerce merchant, you communicate these times to your customers - and they expect these delays to be respected.
If the dispatch delay is not respected, your customer will expect and legally have rights to a full or partial refund.
Unless your warehouse partner provides "Service Level Agreement": you will pay for your warehouse's mistakes.
Finally, onto the recommendations.
- SendFromChina
- Cheap
- Does not provide an SLA
- Does not provide delivery assistance for recoverable packages
- Does not lodge insurance claims on lost packages
- ChinaDivision
- Cheap-ish
- Does not provide an SLA
- Does not provide delivery assistance for recoverable packages
- Does not lodge insurance claims on lost packages
- SPNS
- Cheap
- Provides an SLA
- Provides full delivery support
Why believe me?
We started with SendFromChina. We suffered ~5% package loss. We’d paid insurance on each package, and got nothing back. We lost money.
We moved to Floship. We got slammed by slow processing (ie, 5 days before dispatch), dishonest billing (hidden charges on ‘Free packaging’) and ~45% more expensive than SendFromChina
We moved to SPNS. Our monthly cost halved. Our delivery rate is 100%. Our customers are delighted.
I would recommend: Contact Victor at SPNS (team@spnslogistics.com)
I would also recommend reading: Warehouse Expert - it’s a site dedicated to answering your question - and provides case studies with pros and cons for each major warehouse provider in China and Hong Kong.
