Amazon AWD V.S. What is the difference between third-party overseas warehouses? How to choose?

Since Amazon announced that it would increase warehousing configuration service fees in 2024, many people have begun to notice the existence of AWD warehouses.

If you want to know more, you can click here.

Next, let’s answer some common questions asked by many sellers. The functions of Amazon AWD and third-party overseas warehouses seem to be very similar. How do I choose?

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The role of Amazon AWD and third-party overseas warehouses

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Most sellers operating on Amazon will send their goods to Amazon's warehouses and use FBA (Fulfillment By Amazon) for shipment. In this way, in addition to getting a higher weight in Amazon's keyword rankings, they also don't have to worry about anything about shipping. question. However, there are several major problems with using FBA to ship goods.

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1. High transportation costs
2. May pay long-term transportation fees or low-demand inventory fees
3. There is an inventory capacity limit

In order to solve these problems, many logistics companies began to build overseas warehouses, which also led to the popularity of third-party overseas warehouses. A large number of mainland logistics companies have gone to the United States to build overseas warehouses, allowing sellers to store goods there. The price is lower than that of FBA. When replenishing goods, they can directly replenish goods from overseas warehouses to FBA, and there will be no problem of inventory capacity. But as long as it is a profitable business, Amazon will find a way to grab it, so Amazon also launched its own low-cost storage warehouse, called AWD (Amazon Warehousing & Distribution)

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Advantages and disadvantages of AWD and third-party overseas warehouses

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Next, we will directly compare the advantages and disadvantages of AWD and general third-party overseas warehouses.

• AWD warehouse
  • Advantage
    • Directly sold by Amazon, guaranteed, Amazon will be responsible for any problems
    • One-stop management, no need to switch systems
    • No warehousing configuration fee
    • When FBA is out of stock, it will automatically replenish the stock
    • There is no cost difference between off-peak and peak seasons
  • Disadvantages
    • It is currently not possible to ship to other warehouses or designated addresses because there is a problem with the internal labeling system. It may not be until the end of 2024 or 2025 that the development is completed.
  • No win, no loss
    • No limit on storage quantity
    • The warehousing prices are similar, both are cheaper than FBA

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• Third-party overseas warehouse
  • Advantage
    • The cost may be a little cheaper, but not really much cheaper
    • Can be shipped directly to other platforms such as Walmart and directly shipped to sellers
    • Storage and shipping fees for oversized items may be lower
  • Disadvantages
    • The quality is unstable, and the goods often disappear and cannot be found.
    • Difficult to communicate and deal with problems
    • To switch systems, cannot be managed within Amazon
    • If you deliver goods to Amazon, you still need to pay an additional warehousing configuration fee.
  • No win, no loss
    • No limit on storage quantity
    • The warehousing prices are similar, both are cheaper than FBA

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Summarize

Many logistics companies will strongly promote their overseas warehouses, saying that AWD may not be stable enough in its early stages, but from our observation, overall, if you are a seller who only sells on Amazon, AWD is a very good one. The choice is inexpensive, convenient and guaranteed. Usually, third-party overseas warehouses are used.

If nothing happens, it will be fine. But if something happens, it will be extremely troublesome. But from our point of view, just the guarantee of direct sales from Amazon. If you lose something or have an accident, you will lose money. AWD has already won a big win! Since AWD is still a relatively new option, if you have any questions, please feel free to email us and we will update the answers here to share with you!

Discussion mailbox: service@logistiic.com

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Further reading：

If you want to know how to create an AWD warehouse order,You can refer to this article

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