Case Study: How can a brand increase its profit by 30% through overseas warehouse + return and re-shipment strategy?

1. Background Introduction
   A cross-border e-commerce brand (hereinafter referred to as “Brand A”) mainly sells household goods, and its main market is Europe and the United States. In the past, Brand A adopted the traditional direct mail model, but due to high logistics costs, long delivery cycles, and high return rates (about 15%), the profit margin was severely squeezed.

In 2022, Brand A decided to adjust its supply chain strategy and adopt the “overseas warehouse + return and re-shipment” model to optimize costs, improve customer experience, and ultimately achieve the goal of 30% profit growth.

2. Problem Analysis
   High logistics costs: The logistics cost of a single piece in the direct mail model accounts for 20%-30% of the selling price, which seriously affects the profit margin.

High return rate: Consumers in the European and American markets have high requirements for delivery timeliness and product quality, and the return rate has been maintained at around 15% for a long time.

Inventory backlog: Under the traditional model, returned goods need to be returned to China, and the processing cycle is long. Some goods cannot be resold due to out-of-season or damaged packaging, resulting in waste.

3. Solution: Overseas warehouse + return and re-export strategy
4. Layout overseas warehouses to optimize logistics efficiency
   Shorten delivery time: Set up overseas warehouses in Germany and the United States to achieve local delivery, and shorten the delivery time from 15-30 days to 3-5 days.

Reduce logistics costs: Bulk replenishment to overseas warehouses by sea transportation, the logistics cost of a single piece is reduced by 40%.

Improve customer experience: Faster delivery and local return and exchange services improve customer satisfaction and increase repurchase rate by 20%.

2. Establish a return and re-export mechanism to reduce losses
   Local quality inspection and refurbishment: Set up a return processing center in the overseas warehouse to inspect, clean and repackage the returned goods to ensure that they can be resold.

Flexible pricing strategy: Slightly defective goods are re-listed at a discount price (80%-90% of the original price) to reduce inventory backlogs.

Donate or recycle unsaleable goods: For goods that cannot be resold, cooperate with local charities or recyclers to reduce storage costs.

3. Data-driven optimization of SKU management
   Through sales data analysis, reduce the replenishment of slow-moving products, focus on promoting high-turnover products, and reduce inventory pressure.

Dynamically adjust overseas warehouse inventory to avoid out-of-stock or backlogs.

IV. Implementation effect
Indicator Before implementation After implementation Improvement
Average logistics cost 25% 15% -40%
Return rate 15% 10% -33%
Returned goods secondary sales rate 30% 70% +133%
Customer satisfaction 4.2/5 4.7/5 +12%
Overall profit margin 18% 23.4% +30%
V. Key success factors
Localized operation: Overseas warehouses shorten logistics time and enhance customer trust.

Efficient return management: Reduce losses through local refurbishment and secondary sales.

Data-driven inventory optimization: Accurate replenishment and reduce the risk of slow sales.

VI. Industry Inspiration
Overseas warehouses are the key to improving cross-border competitiveness: especially for categories with high return rates and high customer unit prices.

Returns are not costs, but opportunities: through reasonable handling, returned goods can create additional revenue.

Dynamic adjustment strategy: optimize inventory and pricing based on market feedback to maximize profits.

VII. Future Outlook
Brand A plans to further expand the coverage of overseas warehouses (such as Australia and Japan), and introduce AI forecasting systems to optimize inventory turnover, with the goal of increasing profit margins to more than 25% in the next two years.

Conclusion: Through the “overseas warehouse + return and re-export” strategy, Brand A not only reduced operating costs, but also improved customer experience and repurchase rate, and ultimately achieved a 30% profit growth. This model provides a replicable success experience for cross-border e-commerce.