Alibaba.com has launched a groundbreaking logistics and shipping service that is expected to slash shipping costs for buyers using the e-commerce company’s AliExpress platform.
First, a bit of backstory: Alibaba.com grew into the world’s largest B2B online tradingwebsite by positioning itself as a matchmaker between buyers and sellers, relying on fees for premium memberships for most of its revenues. In the past year, Alibaba.com has been beefing up its business model to include numerous additional services aimed at small businesses, among them AliExpress, a wholesale tradingservice geared to buyers who wish to purchase as few as one item (instead of large-scale commercial orders typically placed by Western buyers with Alibaba.com’s mostly Chinese manufacturers).
Since its launch in April, the popularity of AliExpress has been hampered by issues surrounding international shipping of small orders, the cost of which is often prohibitively high relative to the value of the merchandise being sent. Alibaba.com’s solution: create a service enabling smaller orders, from one buyer or from several, to be pooled into shipments large enough to qualify for bulk carrier rates.
Launched Jan. 18, Fulfillment by AliExpress will knock up to 30 percent off total international shipping costs, according to Alibaba.com. Businesses can use the service to order a single product from a single supplier, or multiple products from multiple suppliers. “AliExpress was designed to give even the smallest business a competitive global trade advantage by offering better prices on smaller-quantity orders,” said David Wei, CEO of Alibaba.com, in a press release.”Adding the Fulfillment service to the AliExpress platform allows us to further extend the international buying power of small businesses around the world, making the shipping and delivery of their business-critical goods as easy, safe and convenient as possible.” The service includes coverage for the domestic leg of shipping products from factory to port, but is currently only available to buyers purchasing from Chinese manufacturers.
Alibaba isnot chargingmembers to use the service, which is provided via a partner. GELS Enterprise Shanghai Co. handles back-end warehousing, shipping and logistics. GELS is offering buyers a choice of discounted shipping rates from international carriers such as UPS and EMS. Other carriers are expected to be added in the future.
By establishing itself as a de facto freight consolidator, Alibaba.com is getting more deeply involved in the international trading process than typical Internet-based B2B companies. Although buyers who use Fulfillment by AliExpress will have to pay two shipping fees—one for the China leg of the trip, another for overseas transfer—the service offers buyers someadded perks. Users can contact AliExpress directly for delivery updates and track their shipments online. In addition, pre-shipment inspection is available. When goods arrive at a GELS warehouse, for anextra fee the logistics company will verify that there is no exterior damage to the goods and that the physical characteristics of the shipment, such as quantity, color and size, match the order.Inspection does not guarantee the quality of the goods, but does help buyers reduce the risk of receiving damaged or non-conforming goods, according to Alibaba.com.