More than 33% of online stores use dropshipping as their source of fulfillment. While it has its benefits, such as low costs and convenience, it does have one major drawback. Chinese New Year.
Many dropshippers work with wholesalers that are from China, or use websites like Alibaba and Aliexpress to fulfill orders. The Chinese new year is different than most of the world, running from February 5th to 19th in 2019.
That means during this time of the year, if you are a dropshipper, you won’t be able to get your orders filled on time, causing a huge delay. This can seriously cut into your revenue, and perhaps most importantly, it can give your customers a poor experience. They’ll have to wait much longer for their order or be disappointed when you notify of them of shipping delays.
How do you get around this? By using local product fulfillment services. You already have a relationship with a wholesaler in China. Now, you can take it to the next level by purchasing product in bulk.
This can be shipped directly to a fulfillment center near you, where they will pack and ship it on your behalf. You’re also going to be able to get large quantities at a discount, reducing your costs compared to ordering one product at a time.
Want to learn how to get around the Chinese New Year with this strategy? Then keep reading as we guide you step-by-step how to do so.
Why you’re missing out by not using local product fulfillment
There are countless benefits that you gain when working with a stateside product fulfillment company. Here are some of the many upsides you can look forward to.
1 – It prevents you from losing extra revenue
The Chinese New Year lasts for approximately two weeks. If your business generates $5,000 per week on average, that’s $10,000 in revenue you’re now losing because of delays.
Bringing your fulfillment stateside allows you to continue shipping out orders despite the holidays. With so many other dropshippers sourcing from China, this means that you also get to stand out among competitors.
2 – You gain more control of the process and your business
Sacrificing control is one of the biggest downsides to dropshipping. You don’t own the product or manage the inventory. You’re depending on another party, and you must take responsibility for anything that goes wrong — including delays during Chinese New Year.
When you build a relationship with an order fulfillment company, you gain back control of your business and the shipment process. You are in charge of inventory, when items are shipped, and even how fast.
In fact, a study published in the Nang Yan Business Journal found that the most important factors in inventory management are:
- Creating a strategic partnership and long term relationship with suppliers and customers.
- Always maintaining a healthy level of inventory, not too little or too much.
- Improving the IT infrastructure of the order fulfillment process to make collaboration easier.
In other words, having more organization, control, and communication is key to success. This brings us to our next point.
3 – It makes the ability to scale easier
Do you plan to expand your eCommerce store over time? With the eCommerce industry looking to increase to $4.8 trillion by 2021, there’s more potential than ever for you to scale.
However, there’s one issue. Dropshipping is a limited business model. You need to depend on a third party to not only manufacture products, but also send out orders. Once again, you’re sacrificing control, and that will hurt your ability to scale.
Product fulfillment companies instantly remove this problem. With warehousing capabilities and online integration, you don’t have to worry about not being able to send out orders or limited quantities. This means that you can scale your business and inventory with no hiccups.
However, there’s one issue. Dropshipping is a limited business model. You need to depend on a third party to not only manufacture products, but also send out orders. Once again, you’re sacrificing control, and that will hurt your ability to scale.
Product fulfillment companies instantly remove this problem. With warehousing capabilities and online integration, you don’t have to worry about not being able to send out orders or limited quantities. This means that you can scale your business and inventory with no hiccups.
4 – You can brand your packages
What kind of impression do you think your customer gets when a beat up box from China arrives at their doorstep? It probably isn’t very good. It can also confuse them when it has a Chinese address and no labelling related to your brand. (Never forget about Yelp, it can kill your business.)
Private labelling, or the practice of placing your brand on a generic product, can greatly improve the growth of your eCommerce business. The fashion marketplace Myntra is a great example of this.
The company began creating private label product lines in 2017, and they now take up 22% of their total sales. With a $1 billion annual run rate, that is a seriously impressive number. Myntra also achieved 1.6 million orders in three days from a special sale during this period.
Product fulfillment companies can place custom logos and other branding onto packages before they are shipped out. This will impress your customers, prevent any confusion, and make your business appear more professional.
5 – Faster shipping times
26% of online shoppers in the United States will abandon their cart if shipping times are too long. Dropshipping from China can commonly take weeks with ePacket and other slow shipping methods. Imagine how many sales you might be missing out on because of this.
Upgrading to a local product fulfillment company will ensure that your customers are satisfied with faster deliveries. This can also help lower the amount of chargebacks or refunds that your store receives due to late orders.
6 – It improves customer satisfaction
Late orders and buggy tracking codes aren’t uncommon when dropshipping from China. It’s a surefire way to upset your customers, and 33% of Americans will stop shopping from you after one poor customer service experience.
This problem is solved when proper systems and more reliable shipping modes are used by a fulfillment company. The customer gets their order quicker, and they will also have peace of mind being able to watch the process, from the moment it leaves the warehouse, until it show up at their door. Along with good support and an optimized website, this greatly improves customer satisfaction.
