Mercado Libre operation is always confronted with the problem of warehouse allocation. As warehouse allocation is the basis of operation, different warehouse allocation methods will bring different influences to sellers. Many people believe that the overseas Fulfillment by Mercado Libre in Mexico is more convenient because of its lower cost and no restrictions, while FBM (Fulfillment by Mercado Libre) can get more traffic support and higher delivery efficiency. So which is better? The following small edition of Cross-border services in Latin America will analyze the advantages and disadvantages of Mexican overseas warehouses and FBM for your reference.

Advantages of Mexican overseas warehouse:

1. Reduce logistics costs. Shipping from overseas warehouse, logistics costs will be lower than domestic delivery.

2. Shortening of logistics timeliness. Shipping from overseas warehouse can save the time from home to abroad, greatly shorten the transportation time and speed up the timeliness of logistics.

3. Improve store praise. After placing an order, customers are most concerned about after-sales service, which includes time limitation, goods return and exchange, etc. When customers have these requirements, we can use overseas warehouses to provide after-sales service, which not only solves customers' worries, but also improves store satisfaction.

4. Improve product exposure. If abroad have their own warehouse, the local customers in online shopping, generally preferred stores from local delivery, because buyers are in mind earlier received your parcel, so for sellers can largely reduce the receiving time for buyers, but also improve the product visibility, increase the monthly sales, to promote sales of the shop.

5. Help market expansion. On the other hand, if sellers pay attention to word-of-mouth marketing, their products can not only gain recognition from buyers in the local market, but also help sellers accumulate more resources to expand the market and expand the sales field and scope of products.

Disadvantages of Mexico's overseas holdings:

1. At the beginning of Mercado Libre, when the shipment volume is small and orders cannot be formed quickly, it is not appropriate to choose overseas warehouses. Although FBM reduces the profit margin, it can help sellers increase the exposure rate of their products. Once the products are recognized by the market, they can consider increasing their profits.

2. The delivery speed of overseas warehouses is slower than that of FBM, and certain delivery fees are required, which may cause negative comments from customers.

Advantages of FBM:

1. FBM operation service is free of charge while enjoying fast logistics. Platform sellers do not have to pay any fees except for the shipping costs of the final journey.

2. Truly realize same-day or next-day delivery, greatly improving user experience.

3. Sellers don't have to deal with after-sale logistics problems. Mercado Libre platform is fully responsible for after-sale logistics.

4. Products participating in the FBM program will be featured by The Mercado Libre platform. Compared with similar products, they will have more exposure, higher ranking, and sellers can open paid advertising services.

5. Sellers can participate in FBM products exclusive platform activities and master broader promotional resources.

6. The seller can choose whether to cover shipping for the customer or not, and enjoy the corresponding final freight discount according to the commodity price.

Disadvantages of FBM:

1. High cost reduces profit margin. Mercado Libre charges a fee per cubic foot of warehouse space. There is also a long-term inventory charge for slow-selling items. Fees for miscellaneous items such as packaging, shipping, handling, customer service and product return and replacement are also high.

2. Sellers must comply with the transportation and packaging standards of FBM products on the platform. Such packaging standards may not be suitable for their own products, resulting in high damage rate and high return and exchange rate during express delivery.

3.Mercado Libre defaults to FBM warehousing, with high initial logistics costs.

4. The goods returned and exchanged by the buyer belong to second sale and cannot be sold as new products.

5. Huge freight costs will be incurred when the product is returned to the seller, which will be borne by the seller, and the seller also needs to pay for the destruction of the product.

In short, Mexican overseas warehouses and FBM each have their own advantages, and the specific choice is still based on their own actual situation. Of course, if you have any questions, you can contact the customer service of Latin American cross-border service, and you will certainly get a satisfactory answer!Disadvantages of FBM: