With strong growth in international ecommerce, some grand companies with significant overseas sales frequently consider the option of local warehouses in their operating countries.
This question usually comes in a number of guises:
The answer to these questions is usually fairly simple – stay with warehouses in your target market for as long as possible. Why? Here are the four main reasons.
This has the dual benefit of speedier refund processes (which customers like and enables them to spend the returned cash sooner), less markdown on returns, and a lower parcel cost, shipped from the local country rather than from China. However, even for this to pay off, a good level of scale is needed, and generally it works best in large demand countries such as the USA.
However, this does lead to the next challenge – as growth continues, a single warehouse cannot handle the volume of stock held and the demand patterns, particularly at the seasonal peak in the run up to Black Friday and Christmas. As the warehouse gets larger, sourcing enough labor can become very difficult.
The simple options are to extend the warehouse, move to a larger warehouse, move out discrete activities, such as returns processing and non-collectables (larger items that are delivered separately), and extend the delivery promise at peak.
