Why ship direct from China?

Why ship direct from China?

One of the challenges of selling products online is shipping.

We'd all like to pay as little as possible, but we want our order to arrive quickly - and to be sure that it will arrive!  If there is any delay, we'd like to know where our item is - and be reassured that it really has been sent!  And of course it should arrive in good condition, nicely packaged. And from the seller's point of view, we want to know that the item was in fact delivered. 

I often marvel at people buying a $3 item from Hong Kong on eBay, including free shipping to anywhere in the world!  Although sometimes, I note (on AliExpress, for example) that items which include "free shipping" are often more expensive than the identical item without "free shipping", so "free" seems to have acquired a new meaning...

Shipping within or from Australia is particularly expensive.  Sure, there are alternatives and it's possible to get discounts if you're a bulk sender (I'm not...), but if I go to the local post office to send a small item such as a Christmas Star kit to someone in the same suburb in Sydney, it will cost me a mimimum of AUD $7.45 (USD $5.77) - just for the postage.

Using "SFC" ("Send From China", www.sendfromchina.com), I could send that same item from Shenzhen in China to Australia for CNY 7.8 (USD $1.26).  That's using bulk mail with no tracking, and it could take up to a month to arrive, but the message is clear: I can ship an item from China to Australia for less than a quarter the cost of sending the same item across the street in Sydney!!

Nevertheless, Australia Post's basic parcel service provides basic tracking and usually only takes 2 or 3 days for delivery, so unless I was selling $5 items the $7.45 shipping cost isn't too bad.

 

The situation is much worse for international shipments!  And these days, most of my customers are international...

To send that same Christmas Star kit to the US by Australia Post's basic Air Mail service costs USD $10.92.

But that doesn't include tracking - and tracking is very important.  Customers often ask me "when will my order arrive?", or "why is it taking so long?".  Occasionally, a customer has claimed that their order was never delivered and, having no proof that it was delivered, I've given them the benefit of the doubt and provided a full refund, or shipped a replacement.  To avoid these problems, ideally I'd only offer shipping services that provide at least basic tracking, enough for the customer to see that their order really is on its way, and for me to confirm that it really was delivered.

If we add basic tracking to that Christmas Star shipment to the US, the cost rises to USD $16.33 - and that's for a service with a typical delivery time of 2 weeks.

Suppose the customer wants it faster than that?  Australia Post's cheapest "express courier" option, with a delivery time of up to 4 days, is USD $43.37!!
I've looked at alternatives such as DHL, and they are no better.

Now compare that with SFC's shipping costs from Shenzhen: I could send the same item to the US for USD $2.03, with basic tracking and a delivery time of up to 10 days - that's less that one eighth the cost of the equivalent service from Australia!

Or, sending via UPS in China, with a delivery time of up to 4 days, is USD $17.32 - less than half the cost of the equivalent express service from Australia.

 

It's worse again for some countries.  For example, someone in Romania recently ordered a Wombat board.

Australia Post doesn't offer air mail shipping with tracking to Romania.  So, if I want to insist that all shipments include tracking, the cheapest option for shipping from Australia to Romania is a courier service costing USD $49.43!!

But I could use SFC to ship the Wombat board direct from China to Romania for only USD $7.48 - much more acceptable!
And express delivery (up to 7 days) to Romania is available for only USD $15.84 - less than a third the cost of shipping from Australia.

 

So it seems a no-brainer to ship my products, which are manufactured in Shenzhen, direct from China to my customers located around the world, instead of shipping from China to Sydney and then expecting my customers to pay the high cost of shipping out of Australia.

Of course, there are risks with doing that - I'm trusting my business to a third party who I can't easily supervise being the biggest one.  Communication is another - I don't speak Chinese!  I need to be able to give them clear instructions, and discuss any issues with them without misunderstanding.

So when I visited Shenzhen in April, I visited SFC, they answered my many newbie questions, and I inspected one of their warehouses and watched them performing their various processes - picking items off shelves, packing, weighing, labelling, sorting - all systematic and based on barcodes with visual checks along the way.  If you've ordered a Wombat board, you will have seen a barcode on the box - that was required by SFC.

I decided to use SFC to ship the Wombat boards, and if successful I will use them for future products, and probably the PIC training boards if I have another batch of them made.

Of the many logistics companies based in Shenzhen, why choose SFC?  They certainly aren't the cheapest possible option - I'm sure that local Chinese manufacturers, working directly with Chinese shippers, can do much better, making possible those amazing "free shipping" deals on low-cost items.  But they have people who speak English, thorough processes, and infrastructure that inlcudes a web-based console that allows me to place orders and see the status of my inventory and shipping.  They also provide an API for shopping cart integration, and although I haven't been able to get it to work properly (not SFC's fault - my hosting provider, Fatcow, doesn't properly support SOAP from PHP scripts...), I do have a basic integration in place, which presents customers only shipping options available to their country and the cost based on total order weight.

I also sent a few test orders to myself, using various delivery methods, before getting SFC to ship Wombat boards to customers.  They all worked well, and they have shipped more than 100 orders so far with no problems - except one that was my mistake.  I used Excel to reformat customer addresses for batch upload to SFC, and in the process I dropped the leading '0' from one person's postal code.  Lesson learned - "postal code" is not a numeric field!  Leading zeros must be retained!

Overall I'm happy with their service and hope to continue to use them for future products.

Sure, the costs are a little higher than the raw shipping costs I gave as examples above, because there are handling and materials fees associates with picking items off the shelf and packaging then sending them, and of course I have to pay for the storage space used in the warehouse, but it's still much better than the overheads associated with sending parcels overseas from Australia, where I have to pack each order myself, fill out the customs form, take a trip to the post office, wait in line, and then show my ID to someone who has seen it a hundred times before (the processes must be followed...).

And although it's a strange feeling to never see the items I'm selling (they go straight from the factory in China to the warehouse in China), it's kind of cool to be able to sit in Sydney and, with a few mouse clicks, have a package shipped from China to pretty much anywhere in the world!

 

Posted by David Meiklejohn

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