Along with Shopify became more and more popular in dropshipping business, there are more and more different order fulfillment ways occured in order to provide more cost effective order processing and faster shipping solutions. Some dropshippers insist supplier fulfillment, some choose China warehouse fulfillment service while others select EU USA warehouse fulfillment service. Which one is the best for Shopify dropshipping? Let’s take a look the advantages and disadvantages for suplier fulfillment, China warehouse fulfillment and EU USA warehouse fulfillment service.
Pros and Cons of supplier fulfillment service
When we dropship from Aliexpress supplier fulfillment service is the most common way to ship orders to clients. The advantages of Aliexpress supplier fulfillment is obviously:
- No extra order fulfillment fee. The product cost already included the order fulfillment fee, thus no extra service fee;
- Cheap shipping rates. Aliexpress supplier mainly offer China post air mail and standard shipping as free shipping service, which is cheap enough;
- Easy to communicate. The supplier customer service knows the order status very well and can be updated on time;
- No stock. This is so called dropshipping, you do not have to stock anything, less money required to start up.
While the disadvantages of Aliexpress supplier fulfillment service is also obviously:
- Quality issues. The supplier fulfillment usually pay less attention on product quality inspection, thus there are usually more aftersale works;
- Long time delivery. The delivery time usually 30 to 50 days, during 2020, the package delivery upto 2 to 3 months;
- Expensive shipping rates for business courier. When you apply faster shipping service on Aliexpress you will see it is extremely expensive and hardly to afford;
- Promotional info. In order to attract more traffics some Aliexpress suppliers put the coupon code, thanks card and other promotional info into the package, which will affect the user experience and secondary purchase rates;
- High product cost. Since the product cost include shipping fee and fulfillment fee, thus the product cost usually higher and no discount available even wholesale;
- No consolidation service. If you have multiple suppliers on Aliexpress, which means one order include multiple suppliers need to be fulfilled multiple times, which not only waste shipping cost but also affect user experience as the products have different brand labels.
Thus Aliexpress supplier fulfillment service usually applied by startups which the Shopify store orders arent stable and do not have high demands on delivery time.
Pros and Cons of China warehouse fulfillment service
The same as Aliexpress supplier order fulfillment service, the products stocked and shipped from China to EU and USA. But the China warehouse fulfillment service played a middleman role by the following Shopify dropshipping services:
- Sourcing/purchasing service. In addition to Aliexpress, the China warehouse could help you source and buy from more Chinese B2B and B2C websites with competitive price;
- QC service. The China warehouse will help you check the product quality before shipping from China, and then remove the supplier label packaging as well as the coupon cards, at last return exchange the products have flaws;
- Label packaging customization. In order to assist dropshipper marketing requirements, the China warehouse also help to customize label, tag, thanks card, coupon code, packaging with store logo;
- Repacking and barcode. The products with good condition will be repacked with plain packaging or customized packaging, then print product sku as barcode to stick on the packaging for recognization purpose in the warehouse;
- Inventory warehousing. The warehouse will scan the barcode to recognize products and shops to update inventory and warehouse postion in the ERP system;
- Print shipping label and packing list. Once the inventory updated, the ERP could calculate the orders that are complete to fulfill; the warehouse people could start to print shipping label and packing list for each of them;
- Pick pack. The warehouse people could pick up from the warehouse based on product SKU and warehouse position based on the packing list, after that pack them one by one;
- Shipping from China. In addition to commonly China post air mail and ePacket, China warehouse usually provide faster shipping courier at more cost effective price, 5 to 15 days shipping from China to USA and EU countries;
After we know the dropshipping services provided by the China warehouse, let’s take a look at its advantages and disadvantages dropship from China.
Pros of China warehouse fulfillment service
From the dropshipping service listed above we can easily see the advantages of China warehouse fulfillment service for Shopify dropshipping:
- Automated order fulfilment. The order fulfillment can be automated after integrated with warehouse ERP system, dropshipper focus on more important works for dropshipping business;
- Personalized service. Compared to Aliexpress supplier, China warehouse offers more personalized service include sourcing purchasing, remove label packaging, customize label packaging, package consolidation and more shipping courier shipping ways;
- Better user experience. No matter QC service, label and packaging service, consolidation service or faster shipping service etc. All aim to provide better user experience to reduce aftersale works and increase user loyalty;
- Flexible marketing. China warehouse have more flexible ways to assist store marketing during holiday promotion and hot sell season promotion;
- Cheaper product cost. The warehouse could always provide cheaper product cost than Aliexpress, not to mention best seller product wholesale price which will greatly increase profit margin;
- Cost effective service fee. Some charge service fee based order quantities, the more orders the cheaper fee; some charge on each service they provided, for example, purchase service fee, QC service fee, warehousing fee, pick pack fee etc. Compared to hire warehouse people, the warehouse order fulfillment fee is extremely cheap.
Cons of China warehouse fulfillment service
There are also some disadvantages apply the China warehouse fulfillment service:
- Total cost might be not cheaper than Aliexpress. If you need China warehouse to source and purchase for you, the total cost include product cost, Shipping cost from supplier to warehouse, service fee and international shipping fee. Although the product cost is cheaper than Aliexpress, the total cost might not be cheaper as there has service and international shipping fee compared to Aliexpress free shipping;
- Longer processing time. If you do not have stock inventory in warehouse, then the warehouse need to purchase once you have new orders which usually takes 2 to 4 days from supplier to warehouse, warehouse processing takes 1 to 2 days usually; If you have stock for best seller products then it can be shipped in 12 hours;
- Higher shipping cost. Since China warehouse usually provide faster shipping delivery time from China to EU and USA, the shipping cost is more higher than Aliexpress standard shipping, but more cheaper than their courier shipping;
When dropshipper choose China warehouse fulfillment service they usually in the developing phrase of the business, with daily 30 to 400 or even more orders, they have enough profits margin and focus on store marketing and important research works.
In order to provide even faster shipping solutions and make their business more and more competitive, more and more Chiese supplier and warehouse start to provide EU USA warehouse fulfillment service as they are similar to Amazon FBA and provide 2 to 4 days delivery in local country. However, the product price need to cover the shipping cost, custom tax and VAT etc. Which already not that cheap, also the overseas warehouse human source are also more expensive thus the service fee wont be cheap enough, of course, you can also sell higher price to cover the cost.
In addition, if you are planning to apply EU USA warehouse by your own stock inventory, there will be huge stock inventory need to ship from China regularly and there are huge capital occupided, thus it need you to have very stable sales everyday, else the warehouse fee plus other service fee will eat most profits.
After compared the advantages and disadvantages of China warehouse fulfillment, Aliexpress supplier and EU USA warehouse fulfillment, we can easily see that different stages of the dropshipping business have different requirements, for startup dropshipping, money saving is the biggest concern, thus Aliexpress supplier fulfillment is better choice, once the business growing to stable orders, a Chinese warehouse fulfillment service is a better fulfillment choice for personalized services, Once the dropshipping business growing more bigger it requires even more faster local delivery, thus Amazon FBA or EU USA warehouse would be the best one.