China is one of the largest markets for cross-border commerce. While China enjoys a steady stream of demand, some US retailers are wary to jump on the bandwagon for fear of slow, order lead times. To help interested retailers procure Chinese wholesale, this article summarizes some commonly used shipping methods.
Wholesale Order Lead Time
Order lead time is defined as the time which elapses between the receipt of the customer’s order and the delivery of the goods, according to the International Journal of Operations and Production Management. This means that order lead time is composed of processing time and shipping time. Processing time is the time it takes the distributor to acquire and prepare a customer’s merchandise. Shipping time is the time it takes for the order to arrive after it has been processed.
A courier service is defined as a company which delivers messages, packages and mail and is known for their speed, security, tracking service, and specialization. This service is recommended for retailers that have smaller orders and value fast shipping.
1) Standard Shipping: Shipping methods like China Post and ePackets are considered standard shipping methods in China. They offer the security and tracking services couriers are known for at a lower price. The only setback is that the shipping speed is a little slower than express courier services. In fact, ePackets tend to take an average of 7-12 business days to arrive. China Post packages tend to take an average of 10-20 business days, according to Business Insider.
2) Express Shipping: Courier services like Fedex, UPS, and DHL offer speedy, trackable shipping. Fedex, DHL, and UPS’s average shipping time is 5-8 business days. However, these couriers are pricier than China Post and ePackets.
For retailers with slightly larger shipments or products, air freight is available. Air freight is almost as quick as courier service shipping. It averages at 2 to 10 days shipping. Some large retailers that specialize in smaller products opt for air freight. However, air freight is subject to customs clearance. Customs clearance can result in delays, fines, and even lost cargo.
Retailers that need huge amounts of goods often benefit from sea freight. Cargo ships can carry large amounts of merchandise at a lower cost than air freight. Retailers that specialize in cumbersome products often prefer sea freight. A drawback of sea freight is long shipping times. Shipping time for sea freight from China can last up to 60 days. A second drawback of sea freight is customs clearance. Customs clearance can significantly slow down sea freight shipping. Like air freight, it can also pose a financial issue in the form of fines and import taxes. Some customs agents will ransack shipments to search for illegal merchandise. More often than not, customs agents will not repackage ransacked goods. The retailer is forced to cover repackaging costs.
Drop-shipping means providing goods by direct delivery from the manufacturer/wholesaler to the customer. Retailers who do not want to keep stock in their store can benefit from drop-shipping. The supplier handles the shipping aspects and the retailer pays for the products/shipping fees. Drop-shipping is not a perfect model, however. Some suppliers can mess up orders and the retailer is faced with the backlash from the customer.