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Cracking The China Supply Chain: A Step-by-Step Guide to Using China Warehouses Like a Pro
You have come to the right place if you are new and just learning about warehousing! We will give help you know more about it!
Is it needed for your business? Can it help you save time and money?
We want to make it as clear as possible so you can see the advantages of it to your business. At the end of the topic, you can message us if there is something that we still need to answer for you.
Do you know that a China warehouse can help you in many ways? Aside from using it only as storage, you can now use it for an E-commerce store and for managing your supply.
You may think renting a space in a China warehouse is expensive. Or if it is really practical to use one. Yes, it can be an added expense, but once you learn its functions and apply it to your business, your import and export process will be faster, more secure, and more profitable.
Our topic for today will cover the uses and guides to what storage in China can offer. Read on!
1) What is warehousing?
It is a system or a process of storing goods for inventory or distribution. Companies can use them for large purchases when they need to keep them all in one place. Afterward, they send it to their customers or other locations. They can rent a space for a short or long time.
It is an all-in-one location where you can store, ship, and do other things for your products. You don’t have to worry about how to handle your purchases. Staff in the warehouse can take care of it. Some services are:
- Inventory tracking
- Pick up from the supplier
- Receiving stocks
- Cross Docking
- SKU Kitting
- Storage Location
- Inventory Management
- Supply Management
2) What is a China Warehouse?
If you buy products from China and need storage, you rent a spot or space in a China warehouse. You can store your items there for as long as you need.
If you import and have several suppliers, you need a warehouse. You can stock them there for safety. You can take them out of the warehouse when you are ready to ship them.
In China, there are so many warehouses. You can access some, while others you cannot. Some are rented for storing products. Some are used for product fulfillment and shipping. Others are used for logistics.
Nowadays, more clients worldwide trust its services because of its low cost, better service, more space, etc. The buildings are improved, and more services are being offered.
3) What is the capacity of the China warehouse?
There is a significant demand in China for this service. After the pandemic, more clients increased their need for their product storage.
So you might be wondering how big or what size there is. In general, the China warehouse totaled 1,145 million square meters. High-standard warehouses cover an area of 345 million square meters.
Some are adding up more floors to their buildings. This is to accommodate the needs of their clients. They can do more services as well because of added spaces.
2. Types of China Warehouses
In China, you can find not just two but FIVE types of warehouses. We will explain each one below:
The government owns public warehouses. They are the opposite of private ones in that anyone looking to rent a storage space for cheaper rates can access them. They only provide storage services.
Since not everyone can have or put up their private warehouse, the government provided this service for those who need storage for an affordable rate.
Aside from the government, private companies can own one. They apply for a license issued by the government. Then, they are allowed to have it rented out for public use.
An individual or a business can own or build one for this warehouse type. It can be a storage or work as a fulfillment center and distribute goods as well.
A single or sole owner runs it. If you ask about its benefits, there are two: good management of the employees and managing the whole system.
Regarding rates, it can be a little expensive for startup companies. However, they can benefit more from this since they can monitor it. They can see what is happening in their products and more. Access is not an issue at all. They can have complete control of the operation anytime.
3) China Bonded Warehouse
When the imported goods go through the Customs process, they are stored here. They follow specific guidelines and processes as soon as the goods arrive. You have to pay taxes when goods are stored in a bonded warehouse.
Some popular ones are:
- EPC Warehouse China
- MOL Logistics
- Shanghai Jinhan
4) Fulfillment Centers
Do you have an E-commerce store? If you need a warehouse to ship your store item to clients worldwide, you need a 3PL or a fulfillment center.
The Amazon Warehouse in China is one good example. For Amazon FBA merchants, they choose this service. As a fulfillment center, they have access to shippers. They process orders and ship them to customers once the order is placed.
The process is quicker because the shipper will pick up the item to be sent right away. This ensures that items will be shipped to clients on time and as promised.
5) Distribution China Warehouse
When a product is almost near the end of the supply chain, it will be put into this facility. The products will be prepared for distribution. The last stage will be the distribution to sellers or suppliers.
3. What are the benefits of a China Warehouse?
1) Offers Lower Cost
Is it really cheap? Yes! In China, you can get everything at a lower cost. You can pay taxes, labor fees, raw materials, and more for a low price. It includes renting a warehouse. It could mean savings for your business.
China is known for its low shipping rates and supply chain management. Imagine what it can do for your business if you can store your goods for a reasonable price. You can get things moving in a faster way.
2) Provides quick delivery
Your products can reach their destination fast and quickly with a warehouse service. Imagine the struggle of not receiving your goods on time. That can affect your business big time!
For example, your freight forwarder who has a warehouse has collaborations or partnerships with shipping companies. They can make the shipping of your goods faster!
China has modern infrastructures and facilities. They have advanced systems for their ports and transportation. It allows quick shipping since most buildings are near the major ports.
3) It improves supply chain management.
In the supply chain process, warehouses perform big roles to make it available to the end users. Thus, using warehouses can serve as the focal point for the chain. The result of this is faster lead times and enhanced customer service.
4) It uses a WMS app for warehouse operations.
WMS (Warehouse Management System) is an advanced technology tool to manage the supply chain. It aims to resolve glitches and issues that can delay the processing of goods. The system is used for:
- inventory tracking
- picking or packing
5) Wide network of suppliers
Suppliers avail their services too! Their products are stored in a building where the major ports are. This can provide a vast network of reliable suppliers.
6) Efficient shipping and logistics network
The warehousing and logistic network plays a significant role in efficient shipping. The shipping process is seamless and speedy when the warehouse and the shipping companies work hand in hand.
4. What are the Services of a China Warehouse?
There’s no better place to assemble all your purchased products from your suppliers than in a warehouse. You can have them stored there for a short or long time.
If you want to avoid a time gap between production and consumption, warehousing is the best option. You remove the burden of where to store the products when you are still waiting to be ready to ship them. It is an essential part of your supply chain.
2) Product Selection and Packing
This is very common in retail distribution and a helpful service offered by a China warehouse. They pick your goods and pack them before shipping.
3) Order processing and management
This is part of the fulfillment process wherein the warehouse staff packs and ships the order to your customer. It entails urgency so that you will get customer satisfaction and excellent service.
So, when you avail of this service, the staff will send the order to the carrier or shipper to deliver it within the expected turnaround time.
The warehouse can ship the goods to you on your chosen carrier. They assist you with the process and ensure you’ll get the products safely and on time.
Another valuable service is consolidation shipping. If you have several suppliers, they will wait for them to arrive in the warehouse to send them to you as one shipment. They can also help you get the best freight forwarder that can lessen the cost of shipping.
5)Product Return processing
If you have a product return policy in your business, the warehouse can handle this for you. Your customers can send the product, which will be received in the warehouse. Depending on the service you availed, your replacement process can also occur from there.
6) Cross Docking
In China, a warehousing operation called cross-docking facilitates quick fulfillment of backorders. They offer services for distribution. They transport the items there from the receiving port.
Cross-docking saves money and time on labor and delivery, product management, and storage. This eliminates the middleman and lowers costs by having the items flow directly from the supplier to the customer.
7) SKU Kitting
SKU Kitting is the process of combining several SKUs to create a new SKU. The products are packaged during this procedure to guarantee secure delivery.
The goods are purchased, packaged, or delivered as a single “kit” with a special SKU. It can help by boosting income and slow-moving item sales. Kitting can decrease expenses by speeding up the picking and packing processes and minimizing mistakes.
8) Storage Location
One of the best warehousing functions is choosing the location where you want to store your goods. If you are in the E-commerce business, you can run the business and send the product to your customers anywhere through the warehouse of your choice.
9) Inventory Management
When you use a China warehouse, you can obtain a secure product storage solution with inventory management. It helps you get an accurate inventory, save on costs, avoid excess stocks, and develop good supplier relationships.
10) Supply Management
A China warehouse uses a Supply Chain Management System or SCM.
It is software that controls the flow of materials, information, and resources associated with any goods or services you sell. It can manage and monitor everything from the time you purchase raw materials to the final product delivery.
5. Factors to Consider When Choosing a China Warehouse
Because of the many options, you can see online, choosing the best is confusing. Do not forget about these factors before closing a deal with a warehouse:
1) Price and Rates
When you go to Chinese platforms or when you simply search from Google, it will show you an estimate or bracket pricing of their rates. Always check for their minimum requirement.
You can shortlist the companies within your allotted limit if you have a budget. You can message them and get quotes and compare them all.
Where is your supplier or your suppliers located? Do not choose a warehouse that is too far from your suppliers because it will add additional costs to you. Choose a central location or the nearest one to your major suppliers.
3) Your Business Needs
What helps in this area is to know the difference between a warehouse and a fulfillment center. A fulfillment center is busier than a warehouse because it doesn’t just store your products but ships them out once an order is placed.
When you only need a space to store your items for the short or long term, you can opt to choose a private or public warehouse. If you have bulk or many products that need to be stored and kept, choose a warehouse and see what other services they offer that can suit your business needs.
4) Strategic Seaport
If you can get a warehouse where your goods will be shipped, that’s favorable. Because your delivery expense from the warehouse to the port can be expensive if it’s far. It can also be risky when transporting products and might cause damage or stealing.
Have you heard the news about the China warehouse explosion? Importers should choose a warehouse that makes safety their top priority. Select one with no instance of red flag issues like explosions, theft, incorrect invoice information, damages, etc.
6. What are the Best Warehouses in China?
We’re naming a few companies that are listed as the best warehouses in China:
- Guangzhou Wanhang Logistics
- Prime Ocean Air Logistics
- Honstrans International
- CBIP Logistics
- Elee China Logistics
- Cosco Shipping Logistics
- Advanta Sourcing
- JiuFang E-commerce Logistics
- Sanity Freight International
- AEB Logistics
- JIL Group Hongkong Limited
There are still hundreds of small to upscale warehouses that you can find in China. Please message us if you need help finding the one suitable for your business needs with price estimates.
How to Rent a Warehouse in China:
- Look for warehouses like Alibaba Warehouse China or AliExpress Warehouse China for rent on Chinese platforms. Some trusted sites are Made in China, Alibaba, or Global Sources.
- Check the details based on your qualifications, like structure, location, type, certifications, etc.
- Take note of the minimum requirement or MOQ of the warehouse and the price.
- Send a message to the company to inquire. Compare each warehouse.
- Get a sourcing agent in China to work with you and avoid hassles and problems when communicating with the company.
1) How much does it cost to avail of a warehousing service in China?
The average monthly price for warehouse space in China is 44.3 yuan per square meter or as low as $0.80/square ft. On average, the rent for a China warehouse costs around $1.10/square ft.
Prices depend on some factors or services. Some may offer $1-$8 with a minimum space of 1 cubic meter. The cost of inspection service can range from $2-$15. It can cost $1-$10 per kilogram for consolidation shipping.
To get an estimate, please message us, and we will discuss the details.
2) What are the disadvantages or challenges when using a warehouse?
One of the challenges you can face is the language barrier. In China, not everyone can speak English very well. If you do not speak Chinese or are not good at English, you need to hire someone to communicate on your behalf. To overcome this struggle, you need to hire a warehouse provider with a staff who can speak English and is professional.
Another disadvantage would be compliance issues. Ensure you only work with companies like JustChinaIt because you should only work with experts. If not, you may bear the risks, and your imports can face extra charges or not get clearance in Customs.
You know there are millions of products in China, some counterfeits. Choosing and working with the right supplier and getting help from a professional sourcing agency can help you avoid this.
3) Where can you find an affordable warehouse in China?
If you search through Google, you will find many options from ads or forums. You can do your research for any of your choices, but we recommend that you check warehouses from these cities:
- Guangzhou Warehouse
- Shenzhen Warehouse
- Shanghai Warehouse
- Yiwu Warehouse
- Ningbo Warehouse
- Xiamen Warehouse
4) How do you choose the right warehouse for your business?
Before you decide on what warehouse to get, you can take a look at these crucial factors as your guide to choosing the right one for your business:
Location– Getting a warehouse near the port where you will ship the goods from is highly suggested. It is easier and more economical when it is close to your suppliers. When you have several suppliers from different places, choose the one which is the center and accessible to all.
Type of warehouse– You can take a look again at Chapter 2 to see the types of warehouses. Nowadays, there are hundreds of clients looking for suppliers for cheap and saleable items like clothes and shoes.
For example, Shein clothes are in demand for import. If you want to sell or import these clothes, you can find suppliers storing their stocks in Shein Warehouse China.
Security and WMS– Pick a warehouse with a top-notch security and management system, enough workers, and warehouse equipment.
Always store your goods at a facility with a strong security system for protection. Look for a warehouse where you won’t have to be concerned about your items being damaged or stolen because there isn’t enough employees or equipment to man it and do the warehouse tasks.
Team up with a sourcing agent– A China sourcing company like JustChinaIt can offer you numerous benefits. Get a list of all accredited warehouses from all cities of China through our channels and network.
Working with someone you can trust can get your business up to the next level. We always tell our clients and partners to build a strong support system because working with suppliers and shippers is difficult. With the right agent, you will get the best warehouse for your product with competitive rates and the best location.
5) What kind of buyers should use a China warehouse?
Whether you’re a start-up, small, medium, or large business, you will need a warehouse if:
- You have several suppliers across China
- You need to consolidate your orders and ship them together
- You are an FBA Amazon shop owner
- You want to avail of extra services like product inspection, packing, quality audits, packaging, etc.
- You need product management and an inventory system
- You want to save on the operational expense
- You do not have the capacity to build your own product warehouse
- You need storage with competitive rates and easy access to suppliers
- You are importing and shipping from major ports in China
- You are a distributor, and you need storage for your products
Running a business is not easy, but having options to manage it can be very helpful. One example is renting a warehouse in China that can help you manage your supply.
There are numerous advantages you can benefit from renting a warehouse and when availing of its services. The prices of warehouse rentals in China are cheap but high-quality. There are many quality warehouses today, so you can worry less about incidents of warehouse explosions in China.
China is a marketplace that can offer so much to anyone! The prices of products and services are affordable to consumers or clients who want to expand their business. One of the needs is a place to store purchases from their suppliers.
If you are looking for a cheap alternative to manage your product and supply, you can talk to us now about using a China warehouse.