Expanding eCommerce with Bonded Warehouses

Expanding an eCommerce business into international markets offers significant growth opportunities, yet it also brings challenges, particularly in logistics and regulatory compliance.

One strategic solution to address these challenges is utilising bonded warehouses. These specialised storage facilities can help eCommerce retailers manage inventory, defer customs duties, and streamline operations, to facilitate smooth international expansion.

Understanding Bonded Warehouses

Bonded Warehouses
These are secure storage facilities which have been authorised by customs to store imported goods before they are released into the local market or exported to another country. These goods, termed as “bonded goods,” are held until customs duties, taxes, and other charges are paid.

The Function of Bonded Warehouses

• Duty Deferment: Retailers can defer payment of customs duties and taxes until the goods are released or sold, improving cash flow.
• Extended Storage: Goods can be stored for extended periods, aiding in inventory management during seasonal fluctuations.
• Value-Added Services: These warehouses often offer additional services such as packaging, labeling, and order fulfillment.

Benefits of Bonded Warehouses

Financial Advantages

One of the primary benefits of bonded warehouses is the deferment of duties and taxes, which can significantly improve cash flow, allowing businesses to allocate resources more strategically. Retailers only pay these fees when the goods are released for consumption, unlike non-bonded warehouses where duties are due upon arrival.

Operational Flexibility

Goods can undergo various manipulations such as sorting, repacking, cleaning, and labelling under customs supervision. This flexibility is particularly beneficial for eCommerce retailers who need to adapt quickly to market demands and seasonal changes.

Enhanced Security and Compliance

Bonded warehouses are subject to strict customs regulations, ensuring high security, which protects inventory from theft or damage, and compliance with customs procedures is streamlined, reducing the risk of regulatory issues.

The Process of Using Bonded Warehouses

Receiving and Storing Goods

When goods arrive at a bonded warehouse, they are stored under a warehouse bond. The warehouse proprietor and importer incur liability at this stage, but duties and taxes are deferred.

Inventory Manipulation and Manufacturing

Stored goods can be manipulated or undergo manufacturing processes while in the bonded warehouse. For example, raw materials can be transformed into finished products, ready for market release once duties are paid.

Order Fulfilment

Bonded warehouses should serve as the fulfilment centre for online orders, handling picking, packing, and shipping of orders. This integration simplifies the supply chain, ensuring efficient delivery to customers.

Release and Payment of Duties

Goods are released from the bonded warehouse for consumption once all necessary duties and taxes are paid. This process marks the transition of goods from bonded to non-bonded status, ready for the market.

Selecting the Right Bonded Warehouse

eCommerce retailers should consider several factors:

Bonded warehouses offer eCommerce retailers a strategic advantage in international expansion. By leveraging these facilities, retailers can defer duties, improve cash flow, efficiently manage inventory, and ensure compliance with customs regulations.

The additional services and operational flexibility provided by bonded warehouses make them an attractive option for businesses looking to establish a strong global presence.

Utilising bonded warehouses can minimise risks and costs associated with international trade, paving the way for successful and sustainable growth in new markets.

Noatum Logistics operate 23 secure warehouses on four continents, offering bonded and non-bonded storage (under the same roof) with dedicated eCommerce, value-added warehouse and fulfilment space.

Support for retail customers include omnichannel solutions with specific value added services for retail, wholesale and eCommerce channels

Inventory management and materials handling are managed seamlessly by warehouse control systems, which link directly into order, courier and returns management systems.

Bonded warehouses that are endlessly adaptable to provide the perfect customs compliance, tax deferment, storage and fulfilment solutions, whatever and wherever your requirement.