How to Start Your First Cross Border Supply Chain

How to Start Your First Cross Border Supply Chain

Supply chain decides success or failure of your online business. If the supplies failed, the subsequent chain will never exist. There are many reasons that an online seller will maintain a cross border supply chain, including:

  • Supplier Availability. Different suppliers have different expertise and coincidentally they are always far away from you.
  • Cost & Manpower. It’s expensive to setup technology, equipment and physical presence. To reduce the supply chain cost, you may choose the nearest domestic suppliers.
  • Target Market. Sometimes, shipping from oversea suppliers directly to your buyers may be cheaper compared to shipping from your business location.

Since there are needs to have a cross border supply chain, here are the FIVE ways to reduce risks in cross border supply chain.

Work with suppliers who answer your queries

Every relationship requires effective communication. And, the first step for effective communication is to get connected! Get as much communication methods as possible from your suppliers! Mobile number, website, email, WhatsApp, WeChat, Facebook, Twitter, local office number and anything else that you can think of!

Trust is important but things can get very tricky when everyone are far apart geographically, especially when things have gone wrong. So, always connect with suppliers through their preferred method and greet them to see how fast they reply to your query. If the supplier did not manage to reply on time before cooperation, mostly they cannot be relied when something went wrong.

Do not make assumptions

Product quality determine your brand status and returned customer rates. And, quality issue can get expensive too. Study claims that quality impacts 30%-70% of the final cost of the product. Factors that may increase the cost of products can come from:

  • Rejected parts that needs to be replaces, returned or fixed
  • Production schedule being delayed
  • Buyer dissatisfaction and warranty cost

And so, do not make any assumption. Anything you requested from suppliers, always cross-checked upon receiving it (especially the first batch) before shipping directly to buyers. AllSome had experiences helping our clients to discover a batch of 10,000 pieces of wrongly manufacturerd fashion items.

Besides, all tasks, requirements, design details and any promises from suppliers, always maintain a black & white agreement to avoid unnecessary dispute in the future.

Start with a focused market

When selling products, start with a niche user group with targeted characteristics. As long as it’s affordable, start with single market and test the supply chain to ensure suppliers, fulfillment & logistics and buyers experience are smooth and perfect. Then, consider of increasing the efficiency and reducing the overall supply chain cost. After everything is stabilized, you are ready to move to a new market!

Approach knowledgeable and experienced fulfillment partners

Experienced and helpful partners can save you tons of works and times. To support your cross border supply chain, they need to have a solid understanding towards customs, taxes & duties and shipping options.

To mention on tax & duties, there are two types:

  • Delivery Duty Paid (DDP) – It means the online sellers (senders) will be paying for it. It can speed things up in case the parcel is taxable.
  • Delivery Duty Unpaid (DDU) – It means the buyers will pay for the duty. For some circumstances, it’s the deal between online sellers and the buyers. It will however bring some inconvenience when the recipients were unreachable and additional cost will arise for return parcel, lost parcel and/or giving up the parcel.

If you choose a fulfillment partner who doesn’t advice you on these aspects, you will eventually find yourself stuck in a rut with the inefficiency that will cost your business.

Avoid over-promising buyers for delivery time

Buyers now are demanding for same day delivery. So, do not over-promising the buyers for delivery time as it will hurt all parties. The following as some time buffer that you should consider when estimating the delivery schedule:

  • Supplier delivery. Although everyone hope everything can move smoothly but emergency always happened, especially during peak season. Add 3 – 7 days of buffer on top of supplier promised delivery dates.
  • Fulfillment – Quality Check. First batch, we suggest to check through all the items. For subsequent batch, can reduce to 10% – 25% of random check based on needs. And, it takes times. Choosing an effective & dedicated fulfillment partner is essential as quality check can be done within a day.
  • Fulfillment – Check in & Tagging. For proper fulfillment facility & service, inventory will be check in. This step involved tagging the item one-by-one. And, it takes times too.
  • Fulfillment – Pick & Pack. So, this is after buyers placed order, the order need to be ready for shipment.
  • Shipping Time. This is referring to how long the buyer can receive their package after it left the fulfillment facility.

In fact, buyers are willing to wait as long as the product is within their expectation.

Cross border e-commerce is an exciting venture that every online seller should not miss. Prepare well and enjoy!

AllSome Fulfillment, your dedicated cross border fulfillment partner that listen. Reach us today: Click to Visit Website

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