How will you deal with the logistics of expanding into US e-commerce? We ask Glowkey CEO Seki about the differences between 3PL and Amazon FBA and the benefits of local inventory

Glowkey Co., Ltd. was founded in 2011 and is a company that supports Japanese companies expanding into the United States.

We have logistics bases in the Los Angeles area and mainly operate 3PL (Third Party Logistics) warehouses, providing comprehensive support for logistics for the United States, including importing, customs clearance, product storage, and post-order shipping.

It has warehouses in Gardena and El Segundo, Los Angeles, and is used as a logistics base for Japanese companies to sell products in the United States.

In particular, we have a system in place to provide consultation in Japanese, making it easy to use even for companies entering the U.S. market for the first time.

There are many 3PL operators in the United States.

Among these, Glowkey's strength is its ``logistics system that allows Japanese companies to safely entrust their sales in the United States.''

Specifically, there are six major characteristics.

1. Japanese language support by Japanese staff

Communication is a surprisingly big hurdle when using an overseas logistics company.

At Glowkey, you can give instructions, consult, and troubleshoot in Japanese while collaborating with local staff.

If a logistics problem occurs, you can consult in Japanese, which is a great relief for companies that are not used to overseas logistics.

2. Excellent location with easy access to LAX and ports

The location of the logistics base is also a major feature.

The warehouse is located approximately 15 minutes by car from Los Angeles International Airport (LAX) and is easily accessible from the Port of Long Beach and the Port of Los Angeles.

This makes it easy to transport products from Japan by container ship or by air.

3. Real-time inventory management using WMS

Glowkey has introduced a WMS (warehouse management system), which allows you to check inventory status and shipping status by SKU in real time.

Furthermore, by linking with EC channels such as Shopify, Amazon, and eBay, it is also possible to link order information to the warehouse and streamline shipping operations.

As the number of e-commerce orders increases, automation through system collaboration becomes more important.

4. Easy to reduce shipping costs within the US

At Glowkey, we reduce shipping costs within the United States by consolidating multiple packages and negotiating with shipping companies.

In some cases, it may be cheaper to transport all the products to the United States and then deliver them locally, rather than shipping each product internationally from Japan one by one.

This difference becomes larger as the number of orders increases.

5. Support for import and customs clearance operations

When exporting products to the United States, not only logistics but also import procedures are required.

At Glowkey, we also support import-related operations such as dealing with importers for companies that do not have a US corporation, as well as FDA-related procedures and customs clearance arrangements.

We are not just a warehouse that stores and ships products, but we also have the ability to provide comprehensive consultation on everything from importing to the United States to selling.

6. Flexible logistics support for each product and company

One of the major benefits of 3PL is that it allows logistics designs to be tailored to each company's operations.

Glowkey not only supports regular EC shipping, but also shipping for refrigerated and frozen products, food, cosmetics, and B2B.

In some cases, the returned product is inspected and if necessary, the product is repaired and returned to a salable condition.

The ability to design logistics operations according to the characteristics of companies and products is a unique strength of 3PL.

In some cases, the introduction of 3PL has actually reduced logistics costs.

One apparel manufacturer was shipping approximately 350 orders per month from Japan using DHL.

The logistics costs in that case would be approximately $11,500 per month.

So we moved our inventory to Glowkey's U.S. warehouse and switched to local delivery, which resulted in a monthly cost of approximately $8,650, including warehouse costs and U.S. shipping costs.

As a result, logistics costs were reduced by approximately 25%.

Shipping to Japan is simpler when the number of orders is small, but as sales volume increases, it may be possible to reduce shipping costs by having local inventory.

In some cases, there are benefits not only in terms of logistics costs but also in terms of customs duties.

The video introduced the case of a sports manufacturer that was subject to a 25% tariff on a product with a selling price of $100.

Previously, customs duties were based on the selling price, resulting in a customs duty of $25 per product.

On the other hand, by reviewing logistics and import methods and importing products to local warehouses first, it was possible to review the base amount for calculating customs duties, and there were cases where the amount of customs duties per product could be significantly reduced.

He also introduced a case study that resulted in approximately $4,000 in tariff reductions based on 200 cases per month.

As a result, they were able to lower the selling price for consumers, which led to an improvement in the purchase rate.

*The handling of customs duties and import prices differs depending on the product and transaction conditions, so please check with a customs broker or expert for actual operation.

Another typical logistics method for e-commerce sales in the United States is Amazon FBA.

FBA is an abbreviation for "Fulfillment by Amazon," and it is a service where you deposit your products in Amazon's warehouse, and Amazon handles everything from storing the products to shipping and delivery after placing your order.

Amazon has a distribution network throughout the United States, so delivery speed is a major strength.

On the other hand, in order to use it, you must follow Amazon's delivery rules, packaging rules, labels, inventory limits, etc.

If you deviate from the rules, you may not be able to deliver the product to the warehouse, or additional measures may be required.

In addition, storage costs may increase during long-term storage or during busy periods, so be careful with products whose sales volume is difficult to predict.

Amazon also has a service called "MCF (Multi-Channel Fulfillment)."

This is a system that allows you to use inventory stored in FBA to fulfill orders received from channels other than Amazon.

For example, you can ship items ordered through Shopify from your FBA inventory.

However, orders placed within Amazon take priority, so delivery via MCF may take longer depending on the situation.

Additionally, because you share inventory limits with FBA, your inventory levels may be affected by delivery restrictions.

Therefore, while there is an advantage of being able to use Amazon's logistics infrastructure, there is no change in the fact that you are dependent on Amazon's rules and mechanisms.

If you are selling mainly on Amazon, FBA is a strong option because of its strong delivery network.

On the other hand, if you want to develop multiple sales channels such as Shopify, eBay, Walmart, and B2B, you can use a 3PL to design your logistics more flexibly.

Glowkey also supports "FBA delivery agency", which receives products at the warehouse and sends them to FBA according to Amazon's delivery rules.

Therefore, rather than considering FBA or 3PL as a complete choice, you can combine them to suit your sales strategy.

If you have just started e-commerce for the United States, shipping products directly from Japan may be sufficient.

However, as the number of orders and sales increase, various logistics issues become apparent, such as shipping costs, delivery times, returns, and customs duties.

At such times, we would like to consider having inventory in the United States and utilizing a 3PL.

In addition, it is important to have a logistics design that matches your sales strategy, such as FBA if you sell mainly on Amazon, or 3PL if you want to expand to your own e-commerce or multiple channels.

If you are a company that feels that ``sales are increasing but logistics costs are high'' in e-commerce for the United States, ``you want to expand sales channels other than Amazon'', or ``there are issues with local returns and inventory management'', it may be a good idea to reconsider your logistics system itself.

Glowkey Co., Ltd. provides a wide range of support for U.S. logistics, including importing products for the U.S., warehousing, EC shipping, and FBA delivery.

If you are worried about expanding into the US and logistics, please take a look at this video as well.