Amazon warehouses are overflowing and TEMU is rising. How can sellers seize this peak season?

FBA warehouse explosion, merchants are slow

Although Amazon has added several new warehouses in the United States, such as FSD1 in South Dakota, ABQ2 in New Mexico, PSC2 in Washington State, and subsequently MIT2 in California and GFU3 in Arizona, the demand during the year-end peak season still exceeds its carrying capacity.

Due to serious warehouse overflows, frequent cancellations of contracts, skipping of contracts and inability to deliver goods to warehouses, the goods are in transit for a long time and the time to put on the shelves is greatly extended.

Some sellers even said that the goods have been waiting for more than 20 days after entering the warehouse and have still not been put on the shelves. In the past six months, it has basically taken more than 10 days for the goods to be put on the shelves.

Many sellers are facing the dilemma of out-of-stock. Even if they adopt the fast method of air transportation, it is difficult to ensure that the goods can be warehoused in time during the peak season.

For example, some sellers’ goods were shipped as early as early August, but to date, these goods have been stranded in the PSC2 warehouse for nearly 75 days and have not yet been successfully delivered; some sellers sent goods through air transport channels last month, but they are still in a reserved status and have not been put on the shelves for sale.

At the same time, some sellers saw new opportunities in the difficulties of the Amazon platform. They turned to the TEMU platform and took advantage of its rapid growth in the European market to achieve rapid business development.

Temu's rise in Europe

Since TEMU officially entered the European market in 2023, it has quickly won the favor of consumers with its unique business model and highly competitive pricing strategy.

In countries such as Norway and Finland, TEMU has even surpassed other companies including Amazon and occupied a significant market share.

According to data, Denmark, as the world's 22nd largest e-commerce market, is expected to reach $18.2943 billion in revenue by 2024. The recognition of the Temu platform in the Danish market has soared to an astonishing 71%, and its popularity has even surpassed many well-known and established online stores in Denmark.

Meanwhile, the proportion of Danes who shopped online at Temu increased from 32% in May to 39% in September this year.

Many people think that Temu is the easiest platform for newcomers to get started. As an e-commerce platform that adopts a buyer system, the quality and cost-effectiveness of products on Temu have become the core factors that determine its market competitiveness. Mastering profit calculation skills, being proficient in product selection strategies, and boldly distributing products are crucial to achieving profitability on this platform.

Some sellers shared their experiences. They used Temu's semi-hosting model to ship in small batches (such as dozens of pieces) to test styles. After half a year of exploration and practice, they gradually mastered the essence of Temu's operations and currently can achieve a net profit of 300,000 yuan per month.

However, both Amazon sellers and TEMU sellers face challenges in inventory management during the peak season. Faced with the influence of various force majeure factors, third-party overseas warehouses have become one of the most effective solutions.

Overseas warehouses become the key to supply chain during peak season

As an important part of the cross-border e-commerce supply chain, overseas warehouses become increasingly important during peak seasons. By establishing overseas warehouses, merchants can:

When FBA warehouses are under pressure during peak seasons, overseas warehouses can provide effective inventory management solutions to ensure that goods can be turned over in a timely manner, shorten delivery time, and improve customer satisfaction.

By pre-storing some goods in overseas warehouses, sellers can better deal with the problem of FBA warehouse overflow and avoid additional costs due to warehousing defect fees. At the same time, centralized warehousing and distribution in overseas warehouses can also reduce overall operating costs.

Overseas warehouses provide sellers with more flexibility, such as adjusting inventory according to market demand, responding to orders quickly, etc. This flexibility helps sellers better grasp market opportunities and improve overall operational efficiency.

Overseas warehouses not only ensure that goods are put on the shelves in a timely manner, but also ensure the smooth flow of funds and optimize overall operational efficiency.

In the future, overseas warehouses will not only be a simple warehousing and distribution center, but also a comprehensive service center integrating inventory management, order processing, after-sales service, etc. Therefore, it is recommended that sellers take full account of the advantages of overseas warehouses when formulating sales strategies to cope with various challenges during the peak season.