How to choose between direct shipping and 3PL order fulfillment? After reading the following pros and cons, you may have an idea
Factory direct sales.
advantage
Low budget and low risk. There are no inventory or storage fees to pay, and cross-border sellers only pay handling fees and shipping fees for the products they have already sold. This advantage is especially important for start-ups.
Carefree. There is no need to worry about picking, packaging and shipping, the direct selling service providers will handle these processes, they usually have logistics teams for picking and packaging, and they also work with multiple shipping Courier companies to get discounted shipping rates.
shortcoming
Uncontrollable. Since direct selling service providers will handle everything, you won’t have control over any of the processes, which can be difficult when your store receives a large number of orders in a short period of time. When the situation occurs, neither the consumer nor you can solve the problem on time.
High error rate. While factory direct sales are cost-effective, sometimes cross-border sellers find they have to pay for unhappy customers. Manufacturers are often more focused on getting more orders than providing professional order fulfillment. Sometimes there is a problem with wrong packaging.
Complex transportation. If cross-border sellers use direct sales and have multiple suppliers, shipping becomes very complicated. If a customer buys multiple products from different suppliers, he or she will receive multiple packages, and the owner will have to pay shipping for each package.
No after-sales. When a direct shipping provider messes up packaging or shipping, consumers complain to the shop owner, not the supplier.
Advantages and disadvantages of Dropshipping
advantage
- Low cost and low risk: no inventory and storage costs, only pay the handling fee and freight of sold goods, suitable for small or unstable order volume start-ups.
- Save time and labor: Suppliers are responsible for picking, packaging, transportation, and use cooperative logistics to reduce freight costs.
shortcoming
- Lack of control: Difficulty in timely intervention when orders surge or logistics problems (such as delays, damage) affect customer experience.
- High error rate: The supplier may send the wrong goods (color, size, etc.), resulting in customer complaints and refund costs.
- Complicated freight: multi-supplier orders need to be shipped separately, customers receive multiple packages, and freight costs are stacked.
- After-sales pressure: Customer problems are borne by the owner, and excessive complaints may lead to penalties and damage credibility of the platform.
Pros and cons of Smartdropping
advantage
- Control of the whole process: support inventory management, package tracking, return processing, etc., real-time monitoring of logistics status, provide package tracking number, problems can be dealt with in time.
- High satisfaction guarantee: accurate packaging, fast distribution (such as holiday time protection), complex needs can also be met, reducing the risk of customer complaints.
- Diversified logistics schemes: flexibly choose or upgrade schemes according to budget, timeliness, season, etc.
- Low cost for startups: As affordable as dropshipping, it is a good Chinese order fulfillment center for startups.
shortcoming
- Need to prepare a small amount of inventory: compared with the direct sales model, need to bear part of the inventory cost (but can be minimized to control the risk).
- Rely on advance planning: It is necessary to incorporate order fulfillment into the marketing plan (such as comparing the plans of multiple service providers before the peak season) to ensure that the budget and experience are controllable.
There are six steps to what happens when goods arrive at smartdropping’s warehouse:
- Inspection: unpack the goods, check the quality, ship the unqualified products back to the factory and record the inspection results.
Print and paste SKU barcode: Print SKU barcode stickers according to the form provided by the customer, stick them on each unit and check them carefully
Make inventory: Scan products into the smartdropping inventory management system
Order synchronization: E-commerce business owners can synchronize orders from their online store to their order fulfillment system with one click through multiple platform integrations
- Picking and packing: includes the following 3 processes
1 Labeling: Print and attach custom labels
2 Repackaging, etc. : Use bags or other packaging to pack ordered products to ensure the integrity of the product during transportation
3 Matching and assembly: Put a variety of products in one package to reduce costs.
- Shipping products: Shipping packages to consumers worldwide in the most suitable mode of transportation, ensuring speed and low cost. Once the package is shipped, the tracking number is sent to the consumer, typically within 24 hours of the Smartdropping warehouse.
Smartdropping is such a great platform, please feel free to contact us.