China has become the largest e-commerce market in the world, with total sales twice the size of the second-largest: the U.S.A. Since China is also the manufacturing capital of the World, it makes sense, therefore, for dropshipping start-ups to consider outsourcing their e-commerce fulfillment to a growing and competitively advantageous industry, with a strategically beneficial geographical location.
No Storage Costs
One benefit of outsourcing your start-up's fulfillment to China is that there is little to no stock that you need to store, as many goods are outsourced directly from China. Due to this being the case, it may relieve an enormous amount of financial pressure for a start-up, as there is no need to warehouse thousands or even millions of dollars of goods that may never sell or be cleared.
As a fulfillment center expedites all of the physical procedures in e-commerce, such as storage, packaging, distribution, etcetera, there is no need for a start-up to rent or purchase a warehouse or storage space, which means a huge short-term upfront financial saving, which can then be put into other essential parts of the business. This is especially useful for new or growing products, which are not quite established yet, as the producer themselves may not be able to store them either. Warehouse space is also far less expensive, and therefore much more cost-effective in China than in other parts of the world, which makes a fulfillment center a much less costly alternative to renting, purchasing or building one's own warehouse or storage facilities.
The lack of needing to facilitate warehouse storage, packaging and shipment means that a start-up can also avoid the costs and technicalities that come with employing warehousing staff and can rather focus on more essential activities directly related to growing their e-commerce or dropshipping company, such as marketing and sales growth.
Packaging and packing costs can also be significantly lowered, as bulk purchases of packaging will be far less costly. China also has a sizable and globally competitive packaging material industry, which holds a worldwide competitive advantage. Therefore, the costs of sourcing packaging material from China are much lower than they would be elsewhere, which translates to even further savings on top of those that would be gained from buying in bulk.
A further consideration for any e-commerce or dropshipping company to take into account is that order fulfillment is never, usually, the primary activity or objective of such a business. Therefore, outsourcing to a more cost-effective, efficient and market-growing fulfillment company based in China, the start-up can save far more financial resources, while focusing on the important aspects of growing their company, such as marketing, product sourcing, and sales growth, etcetera.
Grow Your Business
A fulfillment center can also aid an e-commerce business by offering greater adaptability in terms of order growth and scale, by allowing the company to focus on increasing their sales without worrying about storage, packaging, and shipping. This can be of great use during busy seasons, or when the company wants to expand both their product and customer base. Outsourcing the more physical jobs to focus on growing the business can be of great benefit to an e-commerce company wishing to facilitate exponential growth, without the worry of storing enough products, and fulfilling an increase in orders.
China's logistics infrastructure is also one of the most advanced around the world, which ensures that start-ups need not worry about the quality of the service that they offer to their customers or the time it takes for orders to ship. Outsourcing to a fulfillment center based in China can also cut down on delivery and fulfillment time and ensures that the e-commerce company only needs to deal with one fulfillment process, rather than many, another time saving and cost-effective advantage.