The benefits of partnering with a China fulfillment partner are enormous. Ecommerce businesses won’t be able to take advantage of these benefits unless they choose a fulfillment center that best fits their business needs.
EcommOps has watched many ecommerce business struggle when it comes to selecting a fulfillment center in China. To help resolve this problem, we’ve developed a guide for choosing a China fulfillment center. We’ve also gathered our top eight recommendations of fulfillment centers in China as a starting point for businesses to begin their search.
How to Choose the Best Warehouse and Fulfillment Center in China
Since the best fulfillment center in China for your business varies depending on your specific business needs, there are several steps to follow. This process should not be rushed. It’s important to make sure the fulfillment center you choose:
- Can execute your preferred fulfillment strategy
- Have real warehouses and are experienced working with the best courier lines
- Are located in the optimal spot for direct fulfillment
- Has the capacity to fulfill your specific product
- Offers a fair price while providing the resources and services you need to grow
Let’s take a look at where to start!
1. Understand Your Fulfillment Needs
In order to choose a fulfillment center that’s a good match for your business, you need to understand what you need out of a China fulfillment partner. Let’s examine some modern supply chain strategies that appropriately leverage direct-from-China fulfillment that your business should consider:
Hybrid Fulfillment to One Target Market
If your business is only focused on one market (for example, the U.S.), using China fulfillment to create a hybrid strategy may be a supply chain goal. Here’s an example how using hybrid fulfillment to target a single market can look:
- You place a traditional bulk order, shipped by sea freight to your local fulfillment center in the U.S.
- When stock runs low in the local warehouse, you switch to fulfilling orders from your China fulfillment center while you place another large volume order to be shipped by sea freight.
- The China fulfillment center ships orders to customers until your local warehouse is restocked, in which case fulfillment is again completed by your local warehouse.
This kind of hybrid fulfillment strategy lets you take advantage of the lower cost and faster shipping times of traditional large volume ordering, but allows your business to not over or understock inventory when customer demand is uncertain.
However, in order to use this strategy, your fulfillment center needs to have the capacity to identify which orders need to be fulfilled from which warehouse. If you want to pursue hybrid fulfillment, make sure your fulfillment center candidates have demonstrative experience planning and executing a hybrid fulfillment strategy.
Hybrid Fulfillment: Local Fulfillment Fulfills Local Orders, China Fulfillment Fulfills International Orders
If your business has struggled to break into international markets, you may want to consider a hybrid fulfillment strategy. With this hybrid strategy, your local fulfillment would remain anchored to a traditional supply chain (large volume orders being shipped by sea freight to your local fulfillment center), but your China fulfillment partner would handle any order that required international shipping.
EcommOps has developed multiple hybrid fulfillment strategies that focus on leveraging China fulfillment to ship international orders with huge success. Direct-from-China fulfillment can cut international shipping costs to places like the U.K., E.U., and Australia by more than 50%. More than 50% of our order volume is to non-U.S. markets, making us experts in hybrid strategies.
If this is a fulfillment strategy that seems appealing to you, you need to make sure that a potential fulfillment center:
- Has experience working with international shipping lines
- Can develop strategies for each specific international market you want to enter (which can be nuanced depending on the country)
Fulfill All Orders from China
Finally, your business may chose to fulfill all orders from a China fulfillment center. If this is your preference, your options for fulfillment centers will be more broad, since this strategy is more straightforward and requires less planning and operational processes.
While you do lose some benefits of traditional fulfillment (like access to 2-day shipping), the benefits of direct-from China fulfillment are still available. Given the lower inventory risk, additional flexibility, and the ease of not having to manage multiple fulfillment points, many businesses have chosen to move all fulfillment to China, regardless of their target market.
You’ll have several fulfillment centers to choose from, but you still may want to make sure that your final choice is capable of hybrid fulfillment. It may be a strategy you want to consider in the future, and if you choose a partner that can’t do it, you’ll be stunting your own ability to grow and scale your business as you see fit.
While this list isn’t all-inclusive, questions like these can help you to pinpoint the key needs and challenges your business is facing.
2. Begin Searching for China Fulfillment Centers
Once you have a good idea of what your business needs, then it’s time to start looking for fulfillment centers in China that may be able to meet those needs. It’s good to collect a solid list of potential candidates when you start looking (usually five) that don’t have any immediate red flags.
As you go through this process, there are many questions that will end up disqualifying fulfillment candidates from your list:
Are They a Legitimate Fulfillment Center?
The history of China shipping can be traced to ePacket and dropshipping, and while both served a purpose in beginning the industry, both have fallen out of favor in exchange for more traditional, reliable fulfillment.
There are artifacts from early China shipping that remain, like “fulfillment centers” that don’t actually have a warehouse and are instead operated out of an office or even a garage. While they aren’t as common as they were in the peak of dropshipping, there are still many fulfillment providers that aren’t real 3PLs.
Your business cannot scale with these low-quality service providers, so it’s important to make sure you look for fulfillment centers with real warehouses, fulfillment processes, and enterprise resource planning (ERP) systems.
Do They Have Experience Utilizing the Best DTC Shipping Lines?
The fulfillment industry has developed enough in China that there are a number of high-quality shipping lines, like YunExpress and 4px. However, there are still lines that are not ideal for direct-to-consumer (DTC) shipping, like ePacket. Your chosen fulfillment center needs to be familiar with these shipping lines and to know how to choose the best one for your business.
Even if you know what shipping line you want to use, there’s still a lot of shipping options within brands. Which options you choose needs to be carefully considered and will be dependent on your target market and your product type.
Generally, the best shipping lines are strictly B2B, meaning they don’t accept individual parcels like the United States Postal Service (USPS) would. B2B shipping lines will only ship parcels delivered to them by a fulfillment center, so your chosen candidate needs to have a working relationship with the top shipping lines in order to operate efficiently.
Where Are They Located?
The location of your fulfillment center is critical to your overall success. The best location for a fulfillment center is in the Shenzhen and surrounding region, which includes Dongguan and Guangzhou. This is where all of the top couriers are based and many factories are located in close proximity. EcommOps is based in Shenzhen for this reason.
There are two other locations that fulfillment centers often advertise as great locations, but that’s not necessarily the case when you take a closer look:
- Shanghai Fulfillment, and surrounding areas: Shanghai is often touted as a great location for a fulfillment center, due to the close proximity of factories and being a major port area. However, China-based airports have a lot of restrictions on what can be shipped via air freight, and the proximity to factories is a minimal benefit.
- Hong Kong Fulfillment: While it’s good for a fulfillment center to be close to Hong Kong, it’s not ideal to be located in Hong Kong. Storage and labor is much more expensive in Hong Kong, and since it’s a special administrative region of China, products have to be imported to fulfillment centers there, which will raise your costs.
Hong Kong fulfillment centers and Shanghai fulfillment centers, despite being popular options for foreign businesses, are not recommended by industry insiders. International logistics experts recommend using the Shenzhen region for international order fulfillment services. There aren’t any other locations in China that offer an advantage for fulfillment centers, so other locations should be avoided.
How Efficiently Can They Integrate Fulfillment Process for My Brand?
Not all China fulfillment centers are familiar with working with western brands, which means they may not have the integrations or processes required to work with your company. It’s not uncommon for fulfillment centers to use spreadsheets to process orders and track updates. This isn’t necessarily bad, but it can be prone to error and requires manual processing on your end.
If you use a platform like Shopify or Woocommerce, the fulfillment center will ideally have some kind of app integration to process orders and update tracking information directly to your store. If they don’t, you may need to consider another center that can integrate into your existing tech.
Finally, if you use a custom funnel or other custom back-end systems, you’ll need to make sure that your fulfillment center candidates support API integrations.
How Easily Can I Communicate with Them?
Even a great China fulfillment center isn’t going to do much for you if you don’t understand how they operate or if you can’t clearly communicate. Many fulfillment centers will have limited English ability, and even if you find one that clearly speaks English, you may find cultural differences that create misunderstandings.
Just make sure you take the time to see if you can clearly communicate and if their business operations will be a good match for how you want to operate your business.
3. Research and Compare China Fulfillment Candidates
Once you have a shortlist of fulfillment centers, now is the time to invest in deep, meaningful research. Take time to see the specific services they offer, how those services compare to other candidates on your list, which fulfillment centers have the services that would best meet your business needs.
If you’re not sure services you should be looking for, here are some important fulfillment services that not all fulfillment centers provide:
- Organized inventory management
- Handling factory relations (and finding a supplier, if you need one)
- Product modifications, including branding and customizations
- Custom API integration for your online store
- Crowdfunding fulfillment
- Third-party platform (FBA/FBM) fulfillment services for Amazon, Ebay, and more
Keep in mind that a fulfillment center may provide a service that they don’t necessarily advertise, so it may be worth directly asking a potential candidate what services they do or do not offer.
Not All Fulfillment Centers Ship All Products
In addition to making sure the specific services you need are offered, you also need to confirm that your potential fulfillment partner is actually capable of shipping your product. The last thing you want is to go through the entire process of choosing a China fulfillment center, only to have to start the process completely over because they are unable to ship your product.
While you need to directly confirm with a China fulfillment center if they can ship your product, there are a few general guidelines you can consider on your own to know if your product can be shipped. You’ll want to make sure:
- The final product is produced in China
- The product can fit into parcel sized packages (sizes can vary, but the most common is 60cm in one dimension, and the cumulative width, length, and height not exceeding a total of 90cm)
- Your products are generally lightweight (freight shipping is sensitive to weight, and costs are most efficient for products under 2kg).
In addition, you’ll want to avoid products that have set restrictions on if shipped via air freight, or if they have customs restrictions. Common products that are restricted include:
- Flammable items
- Medicines, supplements, and nutritional products
- Foods and beverages
- Goods considered dangerous or are already otherwise restricted
- Counterfeit products
- Liquids over 100ml in each individual container
5. Discuss and Negotiate Pricing
Lastly, if it looks like a fulfillment center is going to be a good match, it will be time to discuss and negotiate pricing. It can actually be tricky to compare pricing between fulfillment centers, since there’s so much variation between the shipping lines used and the specific services that a fulfillment center may offer.
Consider Shipping Lines
You need to make sure that you are comparing the same (or equitable) shipping lines between different fulfillment providers. Shipping lines can be as fast as 5-8 days or as long as weeks or months, so be sure to look at the cost and the kind of shipping that’s offered.
Ideally, you’ll ask each fulfillment candidate to quote you multiple lines, which will make it easier to compare across providers. Remember, it may be tempting to go with the cheapest shipping line, but it’s far more important to choose the shipping line that makes the most sense for your fulfillment strategy.
If you don’t take the time to look at all the fees a fulfillment center may charge, you might get caught with some unexpected, hidden fees. While the specific fees that your business will face varies from provider to provider, some common ones that you’ll face include:
- Warehousing and storage fees
- Pick and pack fees (or order fulfillment fees)
- Value add services, like labeling
Understanding what fees a fulfillment center may charge will help you find the best fit for your business.
Beware of the Lowest Priced Offer
The lowest price offer isn’t necessarily the best overall value. There are a lot of ways a fulfillment center can offer an unexpectedly low price, and that’s often by not hiring enough labor, not planning for enough warehouse capacity, and not investing in the right technology that will help make warehouse operations efficient.
Investing in a warehouse based only on a low offer can create future problems for growth. If your chosen provider isn’t set to scale as your business grows, you may end up having to start over with a more appropriate fulfillment center. It’s best to take the time and choose a provider that offers a fair price and the services you need to grow.
EcommOps: The Best China Fulfillment Center
We truly believe we offer the best China fulfillment experience for clients that have needs that match our services. EcommOps offers unique benefits that are hard to find in a fulfillment partner. If you’re committed to working with Chinese suppliers and using a direct-from-China fulfillment strategy, EcommOps is second to none.
Some of our unique benefits include:
Premier Warehouse Location
Our warehouse is located in Shenzhen, China, which is the ecommerce hub of China. This means we’re positioned to take advantage of the best shipping routes. Our warehouse is close to a number of China suppliers, which dramatically cuts down factory lead times.
Superior Order Fulfillment and Shipping
EcommOps fulfills orders in a single day, and oftentimes even faster than that. Once orders are fulfilled, your business also gets to take advantage of our 5-8 day direct-to-customer shipping times. This shipping time includes shipping to international customers, making it possible to break into new markets where slow shipping times have previously negatively impacted the customer experience.
Premade and Custom API Integration
We are able to integrate into most major online stores, like Shopify, so your transition to China fulfillment is seamless. If your fulfillment needs are straightforward, one of our pre-made APIs may be a great match for your online store. Our tech experts can create a custom API for clients with more robust technical needs.
Branding Consultation and Product Customizations
EcommOps is more than just a fulfillment center. We can help our clients develop packaging that more appropriately represents their brand. We can also work directly with factories to ensure that product customizations and iterations improve the product without sacrificing overall quality.
If you already work with a supplier that’s a great fit for your business, EcommOps can make that relationship even easier. We can manage factory relations, helping communicate your needs more clearly and efficiently. We ensure there are no unexpected quality problems with your product orders.
International Shipping Expertise
One of the biggest challenges of breaking into an international market is long shipping times and high shipping prices. EcommOps specializes in making international fulfillment more efficient, and we regularly save our clients 50% or more on international shipping by properly leveraging direct-from-China fulfillment.
Ready to Upgrade Your Supply Chain?
If you’re ready to partner with one of the best fulfillment centers in China, EcommOps is ready to chat! Contact us, and our experts will be ready to review your fulfillment needs and to determine which of our services will be a great match.