for Reaffirming the Importance of the Postal Service’s Integrated Delivery Network for All Americans
Morning Consult Opinion: Thank You Congress for Reaffirming the Importance of the Postal Service’s Integrated Delivery Network for All AmericansMorning Consult published an op-ed from John McHugh, chairman of the Package Coalition, commending House and Senate postal reform legislation that would help ensure the long-term viability of the U.S. Postal Service and further maintain competitive, affordable package delivery services for all Americans. See below for key quotes:
Packages are more important than ever to Americans and U.S. businesses
“Public attention and support for the Postal Service is at an all-time high, given thereliance on the service for voting by mail and its role as a ‘lifeline’ delivering medicinesand essential goods throughout the pandemic…In another sense, however, the language is an important confirmation of the core strength of the Postal Service and is essential to its future viability. The pandemic accelerated mailing and shipping trends in ways that will require policymakers to think differently about the role of the Postal Service as a critical part of the nation’s economic infrastructure.
Postal reform must maintain an integrated delivery network for mail and packages at least 6 days a week
“For example, the bills recognize the importance of the Postal Service’s maintaining an integrated delivery network for mail and packages at least six days a week. In one sense, this language merely codifies longstanding postal policy. The Postal Service provided integrated delivery services of mail and packages for over 100 years, ever since Congress mandated that the Postal Service provide a competitive package delivery service to protect Americans in rural and remote areas of the country who were being exploited by private delivery companies…
“By codifying the integrated delivery language, Congress is reaffirming its prior policy direction that the Postal Service should leverage the network efficiencies it generates by delivering mail and packages together. As Congress intended, the Postal Service passes on these cost efficiencies in the form of lower prices to American businesses and consumers, thus, ensuring fair competition and affordable delivery services for all Americans.”
This postal legislation maintains the status quo, which is competitive and profitable
“An integrated delivery network is essential to the continued vitality of the Postal Service’s letter mail and package businesses and to the ideal of a self-sustaining Postal Service. The network efficiencies of an integrated delivery network have enabled the growth and profitability of USPS’ competitive package business. And the Postal Service uses the profits from its packaging business ($11 billion above costs in FY2020), to help defray the costs of maintaining a nationwide mail delivery network. Without the positive financial contribution from its package business, the Postal Service would have to look to letter mailers or Congress to fund its operations…”
“The bipartisan language codifies the status quo and reflects the Postal Service’s strategic vision of the future. Abandoning the notion of an integrated delivery network would be a radical departure from the way the Postal Service has always operated. Forcing the Postal Service to operate parallel, duplicative delivery networks would harm, not help, the Postal Service and the businesses and consumers that rely upon it for affordable delivery services. Such a change would only benefit private competitors by making the Postal Service less competitive.” ***
Keep up with the Package Coalition by following us on Twitter (@PkgCoalition) or visiting our website.
Ocean Network Express (ONE) continues to expand its current refrigerated container (reefer) fleet by adding another 27,500 new units (including 850 units equipped with advanced Controlled Atmosphere (CA) technology) to meet the growing demand for refrigerated cargo around the world. This new investment comes on the heels of 5000 units (all 40’HC) invested by ONE in early 2020, which demonstrates its strong commitment to meet the demand for containerized reefer trade.
Despite the challenges triggered by COVID-19, the global refrigerated container trade showed strong resilience in 2020 compared to dry cargo and ONE expects this growth to be maintained in 2021. ONE is currently working towards the application of the latest IoT technology into its fleet of reefer containers which provides real time visibility of critical information such as the temperature and humidity inside the container, thereby enhancing cargo care during the entire voyage.
Hiroki Tsujii, Managing Director, Marketing & Commercial in Ocean Network Express (ONE) commented “ONE now has one of the largest and youngest reefer fleet in the world, equipped with the most advanced technologies designed to handle perishable cargo demand. Since inception, ONE has been consistently investing in new reefer containers, which in turn has helped to position ourselves in a strategically important & growing business segment.” ONE’s Global Reefer Business
Ocean Network Express Pte. Ltd. 7 Straits View #16-01 Marina One East Tower Singapore 018936 Co. Reg. No. 201708450C Planning team based at ONE’s HQ in Singapore, develops ONE’s global reefer marketing and business strategy through the close monitoring of market demand and the close collaboration with ONE’s regional reefer teams located around the world. ONE’s Reefer technical team is available both on board and on shore providing round the clock assistance and monitoring of its customers’ precious reefer cargo throughout the voyage.
For more information on ONE’s refrigerated cargo offerings, visit our website: https://www.one-line.com/en/advanced-page/refrigerated-cargo
The Package Coalition works to preserve an affordable, reliable and profitable postal package delivery system as an essential part of America’s infrastructure and economic growth.
April 22, 2021
About the USPS Board of Governors
This morning the Senate Committee on Homeland Security & Governmental Affairs will hold a hearing on President Biden’s nominees to become Governors for the U.S. Postal Service. Ahead of the hearing, here’s what you need to know about the Board of Governors:
“The Package Coalition commends the Postal Service for embracing the importance of investing in the future to maintain a 6 to 7-day-a-week integrated delivery network for mail and packages. We look forward to continuing our work with policymakers and the Postal Service to preserve an affordable, reliable and profitable postal package delivery system.”
The Basics
Up to 9 governors on the Board
Appointed by the U.S. President, confirmed by the Senate
The Board was established by 1970’s Postal Reorganization Act
Governors can serve up to 7-year terms; no person may serve more than 2 terms
Up to 5 of the 9 governors may belong to the same political party
Appointments are made when there are vacancies or for the remainder of an unexpired term
The Board meets regularly; all meetings are open to the public
6 governors are needed to achieve an ordinary quorum
Board of Governors Responsibilities
Elect the postmaster general — only the Board has the power to remove the postmaster general
Anton A. Hajjar – former general counsel to the American Postal Workers Union
Amber F. McReynolds – currently the CEO of the National Vote at Home Institute
Ronald Stroman – previously served as Deputy Postmaster General and Chief Governmental Relations Officer for USPS
Current Board of Governors Members
Ron A. Bloom, chairman (D) – appointed by President Trump and confirmed by the Senate in 2019, Bloom was unanimously elected by the Board to become Chairman in February 2021.
Roman Martinez IV, vice chairman (R) – appointed by President Trump and confirmed by the Senate in 2019, Martinez was unanimously elected to serve as Vice Chairman in February 2021.
John M. Barger (R) – appointed by President Trump and confirmed by the Senate in 2019, Barger will serve for the remainder of a term that expires in December 2021.
Robert M. Duncan (R) – appointed by President Trump and confirmed by the Senate in 2018, Duncan previously served as Chairman until February 2021. His term expires in December 2025.
Donald L. Moak (D) – appointed by President Trump and confirmed by the Senate in 2020, his term expires in December 2022.
William D. Zollars (R) – appointed by President Trump and confirmed by the Senate in 2020, his term expires in December 2022.
Strong 2021 Numbers for Ecommerce Demonstrate Need for Affordable, Reliable Package Services
NRF: Strong Retail Sales Expected With Increased Vaccinations & Government Stimulus “The dramatic increase of nearly 18% in March retail sales over the same period last year confirms that a confident consumer is driving the economic rebound, and that should continue through the remainder of 2021,” said NRF President and CEO Matthew Shay. “American households are clearly feeling the full effect of additional fiscal stimulus, gains in the job market and the reopening of the economy. Although there have been some recent issues related to vaccines, consumer confidence remains high and an optimistic outlook for the future continues to grow. Retailers remain committed, transparent and emphatic about prioritizing customer and employee safety as they welcome shoppers back into their stores this spring.”
Mastercard Report Reveals “E-Commerce a Covid Lifeline for Retailers” With consumers kept at home throughout the pandemic, a new report from Mastercard found that ecommerce comprised $1 out of every $5 spent on global retail in 2020 — compared to $1 out of every $7 in 2019.
Approximately 20-30% of the pandemic-related shift to ecommerce is expected to be permanent
Essential retail sectors like groceries saw some of the biggest growth in ecommerce; 70-80% of the shift to grocery ecommerce will likely be permanent even beyond the pandemic
International ecommerce grew by as much as 30%
Consumers are purchasing at a larger number of websites and online marketplaces than ever before
The Package Coalition is an alliance of America’s top retail, e-commerce and logistics companies committed to preserving reliable and affordable postal package delivery services. The Postal Service delivers packages directly to the doorstep of more than 161 million delivery addresses across the country, contributing trillions of dollars to the US economy and supporting millions of jobs and small and medium sized businesses. Keep up with the Package Coalition by following us on Twitter (@PkgCoalition) or visiting our website.
FedEx is conducting standard daily operations across portions of the U.S. recently affected by the winter storms. Previous hazardous conditions across the U.S. have subsided and FedEx is now back to standard daily operations.
Note that there may be on-going service delays until recovery efforts conclude across the country.
As always, FedEx appreciates your business and your patience during weather-related disruptions. We encourage you to continue to check fedex.com for the latest news.
Alibaba.com vs AliExpress: what are the differences
Alibaba.com
Alibaba.com and AliExpress are two platforms that have largely contributed to the success of thousands of eCommerce businesses. These two platforms are sister companies operated by the same owner Alibaba Group that plays a leading role in the online retail world.
However, Alibaba.com and AliExpress offer unique buying and selling experiences with different features for different types of buyers and sellers.
In this post, we’re going to compare Alibaba.com and AliExpress to give buyers and sellers a better idea of which platform is right for their needs. We will cover key features of each platform, typical buyers, typical sellers, associated costs, and additional professional services.
To wrap things up, we will provide a side-by-side comparison of these two powerful platforms and discuss which is the best option for B2B buyers and sellers.
Alibaba Group: an overview
Alibaba.com and AliExpress are both parts of the Alibaba Group. Alibaba Group was founded by Jack Ma in Hangzhou, China in 1999 with the mission “To make it easy to do business anywhere.”
The different subsidiaries of this group have been at the forefront of the emergence and growth of eCommerce and technological development. In addition to Alibaba.com and AliExpress, Alibaba Group owns and operates Taobao, Tmall, Lazada Group, Alibaba Cloud, Alipay, and Alibaba Pictures Group.
One notable mention of Alibaba Group is that portion of the group’s annual revenue is donated to environmental conservation.
What is Alibaba.com?
Alibaba.com was founded in 1999 as Alibaba Group’s first business unit, and it has become a driving force in the world of cross-border B2B eCommerce. It is one of the world’s largest business-to-business wholesale eCommerce platforms that connects over 150,000 suppliers to over 10 million buyers from over 190 countries and regions.
Business buyers come to Alibaba.com intending to source parts to produce the final goods, buy finished products to resell or to find items needed to operate their business. These buyers send 300,000 inquiries to Alibaba.com sellers each day.
Alibaba.com sellers have a digital storefront, also called a “mini-site”, visible to buyers to showcase products and OEM/ODM production capabilities. Sellers can use the built-in marketing and CRM tools to reach and retain customers. They can interact with customers on their own terms and own the customer relationships and contact information.
The platform also provides a toolbox full of resources to facilitate buyer-seller communication and offers logistics solutions and payment protection to help them navigate the world of B2B eCommerce with ease.
Key features of Alibaba.com
Alibaba.com was built with both buyers and sellers in mind. Here are a few features that the platform has to support traders on both sides of the transaction:
Tools for lead generation
CRM tools
Request for Quotation (RFQ) marketplace
Easy-to-navigate workbench
Market and industry analytics tools
Auto-translation to 18+ languages
Comprehensive order management
API integration for advanced customizations
Typical sellers
There are several types of sellers on Alibaba.com: manufacturers, wholesalers, exporters, trading companies and agents, etc. The common ground between all Alibaba.com suppliers is that they sell to other businesses.
Typical buyers
Alibaba.com is a B2B platform, which means that the typical buyers are other businesses. Some types of buyers include B2C retailers, sourcing agents, wholesale distributors, manufacturers, and even other B2B sellers.
Professional services
Alibaba.com offers an array of professional services, including:
Alibaba.com Freight international logistics services
On-boarding support and seller success services
Trade Assurance – a free order protection services
Product inspection and monitoring services>
These services are designed to enhance the sellers’ and buyers’ experience and help them to find success in the B2B marketplace.
What is AliExpress?
AliExpress is one of the top cross-border online B2C eCommerce marketplaces in the world. This platform was created as an offshoot of Alibaba.com back in 2010 as a place for businesses to sell directly to consumers.
Different from Alibaba.com that we talked about earlier, AliExpress, as a retail division of Alibaba Group, is open to individual consumers from all over the world who buy products “as is” without a minimum order quantity.
This platform works just like other generalist B2C platforms and is often compared to Amazon, Etsy, and eBay. Buyers come to AliExpress to look for quality goods at attractively low price, and it has become a perfect place for dropshipping due to its wide selection of goods and competitive prices, secure buyer protection, and ability to purchase in a very small amount. Independent sellers can register and sell products directly to hundreds of millions of buyers worldwide.
⭐Tip: How does dropshipping on AliExpress work?
Dropshippers shop on AliExpress to select suitable products for their website, but they don’t actually buy anything from the suppliers until someone makes an order on the website. Dropshippers then send the order to the supplier, and the supplier will directly ship the products to the buyer, not to the dropshipper.
Key features
AliExpress offers many wonderful features. Some of these resources include:
Automatic translation to 18 languages for a localized user experience
Conversion to currencies from 51 countries
Support for 38 local payment channels for secure payment and transaction
Sellers on AliExpress are typically SMB that sell products to consumers. Different from Alibaba.com, sellers on AliExpress are probably not manufacturers themselves, but third-party individuals that serve as middlemen to buy the products from factories in large volume and sell them in small volume on AliExpress, but buyers still get a competitive price for the goods.
Popular types of sellers on AliExpress include clothing, electronics, beauty, tools, home improvement, and appliance retailers.
Typical buyers
AliExpress positions itself as a B2C platform, so the typical buyers are consumers. AliExpress currently has over 150 million buyers in 220 countries and territories worldwide.
Because the prices on AliExpress are so competitive that are close to wholesale prices and the platform offers a huge selection of nearly everything, a large number of buyers on AliExpress are actually resellers looking for dropshipping. Dropshipping on AliExpress is ideal for those who want to start an online eCommerce business without significant capital investment and who don’t want to worry about inventory or delivery.
Professional services
AliExpress does offer several professional services for both buyers and sellers:
AliExpress Shipping
It is the one-stop shipping method that is officially provided by AliExpress and Alibaba Group’s Cainiao Network. As an end-to-end cross-border logistics service, it contains the first-mile pickup service, consolidation service, international line-haul service, customs clearance service, and last-mile delivery service.
The platform also provides different shipping options to choose from, such as UPS, FedEx, DHL, EMS, e-Packet, etc. Shipping costs will vary depending on where you are located and the delivery speed. And for most products, free shipping by AliExpress Shipping and Cainiao Network is offered. It usually takes as short as 1 week to as long as 2 months.
Buyer Protection
AliExpress offers a buyer protection policy that guarantees secure transactions and protects buyers from scammers. It promises your money back if the item you received is not as described, or if your item is not delivered within the Buyer Protection period.
Whenever there is a dispute, the buyer can first contact the seller for an informal resolution. If an agreement cannot be reached, buyers can simply raise a claim by filing a ticket to AliExpress. AliExpress will act as a mediator to make sure you will get a refund in 15 days.
Alibaba.com vs. AliExpress: a side-by-side comparison
Now that you have a decent understanding of both Alibaba.com and AliExpress, let’s take a look at how the two measure up to one another.
Raw materials, customizable products, ready-made products
Ready-made products
Pricing
Negotiable
Fixed
Shipping cost
Vary depending on the shipping terms agreed upon by buyers and sellers
Typically free
Minimum order quantity
Yes
No
Private labeling
Yes
No
Financing options for buyers
Yes
No
Order protection
Yes
Yes
Dispute resolution
Yes
Yes
Key differences between Alibaba.com and AliExpress
As you can see, Alibaba.com and AliExpress are very similar but serve two different purposes. The main difference has to do with the nature of the transactions that each platform is suited for.Alibaba.com is a B2B platform that carries out transactions between businesses. AliExpress is a B2C platform that facilitates transactions between businesses and consumers.
Many buyers are attracted immediately to Alibaba.com whether they are businesses or not simply because of the attractively low pricing of products on the site. However, Alibaba.com has minimum order quantities in place, meaning buyers must buy in bulk to access the wholesale rates.
AliExpress, on the other hand, still has relatively low prices but does not have minimum order quantities.
When it comes to commission and take rates, sellers on Alibaba.com pay 0% on most transactions. AliExpress sellers pay up to 8%.
Although these platforms are different, neither is better or worse. Which you should use totally depends on your goals as either a buyer or a seller. Consumers are better off shopping on AliExpress, and businesses are better off sourcing products or materials on Alibaba.com.
How to use Alibaba.com
Here is a quick rundown of what you can expect as either a buyer or a seller on Alibaba.com.
How to buy from Alibaba.com
Step 1: Register a free buyer account on Alibaba.com to get started.
Fill out as much information as you can in the account settings because suppliers are more willing to work with serious buyers and established businesses.
Step 2: Find products and sellers.
On Alibaba.com, business buyers can work with sellers to create customized products or find products that already exist and are “Ready to Ship”, which means that those products can leave the facility within 15 days of when your place an order. Buyers can find products and sellers in different ways:
1. Begin your search in the search bar. Filter the results by different criteria, including minimum order quantity, price, supplier’s country, supplier certifications, and more.
2. Go to pavilions. Check out themed pavilions from top-ranking products to country-specific exports.
3. Send a Request for Quotation (RFQ). Post a request for a quote in the RFQ market and specify what you are looking for, and sellers will reach out to you with offers.
You can check out a seller’s profile, credentials, and other information shown on the seller’s mini-site to assess whether they are best for your sourcing needs. Those badges on a seller’s profile help you know what steps they took to prove themselves as a trusted partner:
Gold supplier: Sellers that are paid members and that have been verified as businesses with commercial or industrial capabilities.
Verified supplier: Sellers whose company profile, management system, production capabilities, product, and process controls have been assessed, certified, and/or inspected by third party institutions.
Trade Assurance supplier: Sellers who can accept payment through Alibaba.com, enabling Alibaba.com payment and order protection.
Step 3: Order right away or contact suppliers for more information.
If you find existing products that meet your needs and are ready to purchase them, you can order right away by click “Start Order” from the product detail page and then proceed to quick and easy checkout.
B2B buying process usually involves more back-and-forth and is thus much lengthier than B2C buying. Therefore, oftentimes, business buyers like you will be more cautious assessing suppliers and want to contact suppliers to negotiate prices, ask for customizations in your orders, and learn more about their businesses.
Buyers on Alibaba.com can reach out to suppliers directly by clicking “Contact Supplier” and sending an inquiry.
Step 4: Place an order and receive your goods.
Alibaba.com offers multiple secure online payment methods including online bank payment (e-Checking), credit cards, telegraphic transfer (T/T), and provides financing options and payment terms for qualified buyers in selected countries and regions.
To ensure the products meet your specifications, you can always request a sample before placing a full order to avoid risks. Alibaba.com also has other order protection measures for buyers such as the production monitoring and inspection services that will send a local team to a seller’s facility and inspect the products before shipment.
When it comes to cross-border shipping and logistics, buyers can use Alibaba.com Freight for a reliable and transparent experience. It provides ocean freight, air freight, and air express & air parcels from mainly China to worldwide.
How to sell on Alibaba.com
Step 1: Create a seller account on Alibaba.com and activate your seller membership.
As a new seller, the first step you need to take is to register a free seller account on Alibaba.com. The seller registration is completely free and you can get a feel for how the platform works before committing to a paid membership, also known as the Gold Supplier membership.
Alibaba.com offers multiple Gold Supplier membership packages depending on the location of where your business operates. Subscription to paid membership will unlock more advanced features and support that you will need to succeed.
Unlike some other online selling platforms, Alibaba.com does NOT charge sellers a commission rate for each item sold, therefore, sellers can bring home a larger percentage of their earnings.
To activate the paid membership, sellers also need to go through a Business Verification process which establishes the validity of your company’s status and authorized contact person.
Step 2: Complete seller profile, post products, and launch your mini-site.
To make sure buyers can find you and trust you well enough to place an order or send an inquiry, it is essential for sellers to complete their profile, post all products they have in their catalogs and optimize for visibility, and build and decorate mini-site to create a digital storefront showcasing your capabilities and brand identity.
A dedicated account manager will guide you throughout the process and you can also check out the abundant educational resources in the online seller learning center.
Step 3: Reply to inquiries and get orders.
Sellers will start to receive inquiries from buyers, after listing products. Replying to inquiries in a quick and professional manner is critical to converting inquiries into sales. Sellers can easily manage all the communication in the My Alibaba workbench or from the AliSupplier mobile app.
⭐TIP: Inquiries that are responded to within four hours have 30% more follow-up responses from potential buyers.
At the same time, Alibaba.com is dedicated to ensuring a positive end-to-end experience for your buyers with Trade Assurance – the order protection and secure payments service of Alibaba.com. This service makes it easier for buyers to trust working with sellers around the world, which makes it easier for you to close the sale. This also helps you streamline your process with all messages, orders, and payments in one place.
How to use AliExpress
AliExpress is very user-friendly, so getting started on the platform as either a buyer or seller is pretty easy.
Here is a brief walkthrough for users on either end of the transaction.
How to buy from AliExpress
Buying on AliExpress is just like buying on any other online storefront.
First, go to AliExpress, click on the “Join” button, and create an account to shop away! You can also opt to sign in with Facebook, Twitter, Instagram, Google, Apple, and other social platforms.
From there, you can browse products by category or search for something in particular. Results can be filtered by price, ratings, shipping county, shipping cost, and returnability. You can also sort by price, newest listings, and best match. If you have specific items that you want to look for, just type it in the search and it will show you all the relative goods.
We highly recommend you paying attention to the followings to assess sellers and products:
Ratings, the number of customer reviews, and the number of orders shipped. Typically, you can look for products that have a rating above 4.0, and more than 100 orders shipped. You can also check the real pictures uploaded by paid buyers to the customer reviews.
Detailed seller ratings and feedback history that is shown on the seller’s minisite page. On the “Feedback” tab on a seller’s minisite page, you get a breakdown of the seller’s feedback history and its “Positive Feedback” percentage.
Free shipping and free return. Check out if free shipping and free return is offered.
Simply add items to the cart and continue browsing until you are ready to place the order. Once you finish shopping, you can view all the items you intend to buy and either pay them in total or select specific items to pay for. Fill out all necessary checkout information and select payment methods to complete your transaction. AliExpress offers a variety of payment methods, including credit cards (Visa, MasterCard, Maestro, American Express, etc.), PayPal, Wire Transfer, West Union, etc.
How to sell on AliExpress
Step 1: Check your eligibility.
AliExpress allows sellers who have a registered company to open an online shop on the website to reach millions of buyers all over the world. While Alibaba.com allows sellers from nearly all countries in the world to register and sell on the platform, AliExpress only supports businesses whose tax location is one of the following: Mainland China, Russia, Spain, Italy, Turkey, France.
Step 2: Signing up to sell on AliExpress is absolutely free.
Contact information of the company and the legal representative
Once you submit this information, AliExpress will respond within 2 business days to let you know if you’re clear to start selling.
While creating a seller account on AliExpress is completely free, the seller has to pay the marketplace a commission of between 5% and 8% only for the items sold, depending on the product category. Other than that, there is no minimum or fixed overheads or arrangement fee.
Step 2: Upload products and customize your storefront.
After you’ve been verified and your seller account being activated, it is time to upload your products with prices and descriptions.
Sellers can use the “Product Information Template” and “Price Inventory Template” provided by the platform to bulk update products using the Excel spreadsheets and manage stock and prices. “AliExpress Assistant” is another tool that can sync with Magento 1, Magento 2, and Prestashop store and allows sellers to upload commodities in batches.
If you are selling branded products on the platform, you can also apply to become an official store or authorized sellers of the brand and enjoy more exposure and privileges in the platform and increase your trustworthiness to the buyers. You can also apply and register a new own brand that’s not already in the AliExpress trademark database.
Decorating and customizing your store is important to build up your brand image and provide customers with additional service and promotional information for your shop.
Step 3: Ship products and receive payment.
As a seller, you can use your own logistics solution to ship customer orders by setting up your own shipping template, including free shipping and shipping cost by weights and other dimensions. You can also use the door-to-door logistics solutions provided by AliExpress’s logistics partners and Cainiao Network.
The sales payment will be paid within a maximum of 15 days after the buyer confirms the delivery or after the expiration date. You can check your balance in your My AliExpress workbench. To withdraw money from your AliExpress balance, you need to associate your bank account.
Why choose Alibaba.com?
As a B2B seller or manufacturer, Alibaba.com is the way to go. It is equipped with all of the tools you need to successfully grow your business online.
The platform is well-suited for sellers with different goals, including entering the international market, testing a product in the market, expanding your wholesale business, and more.
Thanks to the professional features and easy-to-navigate platform, selling on Alibaba.com is accessible to businesses both small and large.
Direct vs indirect exporting: which is best for your business
Alibaba.com
Breaking down the borders on your business and exporting to foreign markets is a great way to take your business to the next level. It helps you to widen your pool of prospective customers and build brand recognition all over the globe.
There are two major types of exporting that help businesses go global: direct and indirect exporting.
In this post, we’re going to compare direct and indirect exporting so that you can determine which model will work best for your business. We will take a look at the advantages, disadvantages, and best use cases of each.
To wrap things up, we will talk about how eCommerce platforms like Alibaba.com can help you streamline your global expansion.
Exporting: the basics
Exporting is the act of selling something to a buyer in another country. It is also commonly referred to as “international trade.”
In general, exporting comes with a wide range of benefits for businesses of any size. The biggest benefit is expanding your customer base by tapping into foreign demand. This helps you multiply your potential earnings while reducing your dependence on your local market.
As we mentioned, there are two different business models that exporters use. One is direct exporting and the other is indirect exporting.
What is direct exporting?
Direct exporting is when a business sells directly to buyers in other countries. There is no middleman, which means that as a seller, you don’t have to worry about a third-party company taking a cut. Some businesses also open a foreign branch of their companies in the country where they plan to expand into or have a business representative on the ground.
With direct exporting, the export company will handle all client communication and negotiations with international business. This includes being solely responsible for acquiring new customers, setting up contracts, marketing activities, selling items, and dealing with international logistics and payment. You’re also in control of every transaction, which means you can represent your brand the way that makes the most sense. When you have the resources for this sort of task, it can work in your favor.
While direct exporting has many perks, it can be a bit difficult, especially for sellers that are just starting to introduce their products to foreign markets. Sellers need to forge their own partnerships and relationships.
In the event that things are not going as planned and you decide to pull out of the foreign market, you don’t have to worry about losing excessive amounts of money since direct exporting doesn’t use a contract with a middleman.
😃Advantages of direct exporting
Here are some top advantages of direct exporting:
Greater degree of control over all stages of the trading and transaction process
Eliminate intermediaries and own higher profit margins of your own
You own your client relationships
Greater flexibility to redirect or pull off your marketing activities
Hands-on experience gives you more insights into the market to boost your competitiveness
Working directly with buyers helps build brand loyalty
🤔Disadvantages of direct exporting
Although you can certainly gain a lot from running a direct export business, there are also a couple of cons to be aware of:
Difficult for sellers with limited experience and resources
Higher financial investment is required to carry out all the exporting efforts
Requires specialized teams with specialized knowledge, which means bringing on new hires
More responsibilities and a higher degree of risks
You must find buyers and cultivate a customer base of your own
For small manufacturers and start-ups who do not have adequate infrastructure and knowledge about exporting into foreign markets, they may feel that the intermediary is worth the cost and thus opt for the indirect model of exporting.
Direct exporting best use case
Direct exporting is best suited for larger companies that have the resources to invest in specialized teams to break into foreign markets.
If you are considering direct exporting, it is wise to check if the countries that you intend to export to have similar guidelines on products, products, and selling. This will make it easier for you to sell in that foreign market.
It is also a good idea to assess profitability based on the physical distance between your warehouse and the places that you will be selling in. If it is too expensive to ship the products to a specific destination, you may be better off not selling in that country or selling through a third-party company to cut costs.
What is indirect exporting?
Indirect exporting means you make the sale to a third-party company that subsequently sells directly to international buyers or importers. Since indirect exporting involves middlemen to handle nearly all the export operations, it is the least expensive and the quickest approach to enter foreign markets for smaller companies.
Two types of companies that take on the intermediary role are Export Trading Companies (ETC) and Export Management Companies (EMC). ETCs are companies that will buy your products on behalf of their clients whereas EMCs will simply manage your transactions. The difference between the two is that ETCs assume some sort of risk by purchasing stock, whereas EMCs don’t typically hold any stock of their own.
In simple terms, ETCs generally work on behalf of buyers and EMCs work on behalf of sellers. Both of these third-party companies generally operate in the same country as the seller. Since sellers generally choose ETCs and EMCs are in the same country, they can still sell to far-off countries without having to worry about compromising profits.
😃Advantages of indirect exporting
Choosing an indirect approach to exporting, a business can often reduce the risks associated with trading internationally. Below are some of the indirect exporting benefits:
The brunt of the work is handled by the intermediary, from international shipping to legal and financial aspects of the global trade, so you don’t need to worry about it.
No exporting experience or knowledge is required, and no or very few extra hires is needed.
ETCs and ECMs can tap into existing partnerships, helping you expand globally faster and increase your sales volume.
Fewer limits on where you can sell.
You don’t have to invest time and budget to find your own buyers.
🤔Disadvantages of indirect exporting
While there are benefits of indirect exporting, the following are the considerations to keep in mind because of your lack of control over the entire process:
You own fewer profit margins, as profits will be shared with the export house or agents.
You have less control over the prices of your products and how your brands and products are represented internationally.
Too much dependence on the commitment of the partner and if the middleman you work with is less competent, it may hinder the overall exporting activities and sales of your company.
You don’t own relationships with clients and can’t provide value-added services.
You are unable to learn about the market hands-on and can’t develop communication with and understanding of the market trend and consumers.
Indirect exporting best use case
Indirect exporting is best suited for small businesses that are new to exporting and international trade or do not have the resources to build a specialized exporting team.
Direct vs. indirect exporting: a side-by-side comparison
Now that you know what each of these exporting business models entails, let’s take a look at direct and indirect exporting side-by-side.
Direct Exporting
Indirect Exporting
Requires a middleman
No
Yes
Suitable for global expansion
Yes
Yes
Who finds the buyers?
The seller
The middleman
Best use case
Sellers with experience in international trade;
Sellers with access to resources to build a specialized team;
Sellers that are new in the foreign market;
Sellers that prefer to outsource international trade;
Associated costs
Investment in a specialized team
Commission to a third-party
Advantages
Higher profit margins;
A greater degree of control;
Own direct customer contact;
Hands-on experience and knowledge gain;
Risks transferred to the third-party;
Faster access to international trade;
Less capital investment;
No knowledge or experience is required;
Disadvantages
A higher degree of risks and more responsibilities to take on;
Higher capital investment;
Specialized knowledge and new staff hire required;
Fewer profit margins with middlemen taking a cut;
Less control over the entire process and brand image;
Don’t own client relationship;
To decide which type of export business to start, you can think through the following questions and carry out initial research:
the size of your company
the demand for your products oversea and your unique selling point
whether the market is already saturated
how much time, resources, and money you can invest and your expected ROI
your exporting experience and knowledge
your tolerance for risks
How to use Alibaba.com for global expansion
Whether you choose to use the direct or indirect approach to exporting should depend on your exporting goals and what sort of resources you have access to. However, if your end goal is to take more profits home and effectively scale your business globally, transitioning to eCommerce and online selling is the way to go for businesses of any size. And Alibaba.com, the world’s leading online B2B trade platform, has everything you need to reach your global sales potentials.
Our platform has an existing pool of 10+ million buyers your business can tap into. It also provides auto-translation, communication tools, CRM tools, Request for Quotation marketplace, logistics solutions, and many other tools and support.
Additionally, the Alibaba.com platform offers onboarding support and other professional services which makes it a great option for sellers who has zero exporting or online selling experience. Our support team can help you customize your online storefront, add your products, access market analytics, determine demand trends, and more.
Of course, Alibaba.com is just one of many B2B marketplaces, but it is one of the leaders that has helped the eCommerce industry to grow to the magnitude that it is today.
How Crimark, a small family coffee company, expand into exporting for the 1st time with help from Alibaba.com
Crimark is a small coffee business with 20 years’ experience in the industry but never exported to sell their award-winning coffee products abroad. Claudio Trenta, the owner of the company, is very excited about the good results and clientele they gained from selling on Alibaba.com.
“Before Alibaba.com we never exported. We are only a small family-run coffee company but Alibaba.com has helped us to understand how to export and enabled us to realize our export dream.”
Today, President Biden signed the American Rescue Plan Act, a $1.9 trillion stimulus bill intended to address the continued negative public health and economic impacts of the COVID-19 pandemic. Many provisions within this legislation aim to assist small businesses and individuals across the country, some of which may benefit sellers and the businesses they operate. The text of the bill can be found here, with full summaries of specific policies here.
Relevant package details include:
Small Business and Tax Provisions
$15 billion in new funding for Economic Injury Disaster Loan (EIDL) grants targeted to underserved small businesses.
$10 billion for the State Small Business Credit Initiative, which provides resources for state governments to set up programs that can leverage private capital for low-interest loans and other investment to help small businesses and entrepreneurs.
Extends the paid sick and FMLA leave tax credits created in the Families First Coronavirus Response Act of 2020. Provides payroll tax credits for employers who voluntarily provide paid leave through the end of September 2021.
Extends the employee retention tax credit established by the CARES Act through December 31, 2021. Expands eligibility for the credit to new startups that were established after February 15, 2020, and companies if their revenue declined by 90% compared to the same calendar quarter of the previous year. The credit would be capped at $50,000 per calendar quarter for startups.
Cash Payments to Individuals & Families / Unemployment Benefits
Provides $1,400 in direct payments to individuals and dependents.
Extends enhanced unemployment insurance until September 6, 2021. This includes the Pandemic Unemployment Assistance (PUA) program, which expands eligibility for the self-employed, gig workers, freelancers and others in non-traditional employment who do not qualify for regular unemployment insurance, as well as the Pandemic Emergency Unemployment Compensation (PEUC) program, which makes additional weeks of benefits available to workers who exhaust their state benefits. All other CARES Act and Families First Act unemployment programs are similarly extended until September 6, 2021.
We will continue to monitor developments at the federal, state and local level and provide regular updates about small business policies and assistance that may be made available, and will continue to advocate for resources and policies that support small businesses in this challenging time.
