In the cross-border auto parts industry, the high proportion of logistics costs has always been a headache for sellers. Whether it's large items like engines or small items like car lights, spark plugs, bearings, door handles; large items such as shock absorbers, grilles, bumpers, car lights, pickup truck covers, etc.; logistics costs not only directly affect the profit margin of products but also become a major bottleneck hindering the expansion of the industry. So, why does the proportion of auto parts logistics costs in the overall cost is so heavy?

Why does logistics costs account for a heavy proportion in auto parts

The volume and weight of auto parts products are the core reasons for the high logistics costs. For example, a pair of truck headlights may weigh more than 10 kilograms individually, and after packaging, they often occupy a large amount of transportation space. Cross-border logistics calculates freight based on weight and volume, which makes the transportation cost of auto parts much higher than that of ordinary light and small goods. For instance, a pickup truck headlight that occupies half a table, a radiator taller than a child, a shock spring longer than a leg, as long as there is a return, it's basically a loss; a small assistant once heard a saying: a multi-store seller, purchasing and shipping from 1688. Because there is no vehicle model adaptation and supply chain support, they often face losses after a large order due to the high return rate. So the loss brought by the large order has to be compensated by dozens of small orders. High return rate, double logistics costs difficult to digest; In the auto parts industry, product compatibility and customer installation issues can easily lead to returns. Cross-border returns not only take a long time but also impose a heavy burden on sellers. A typical case is a seller who returned a batch of mismatched brake pads, and the return freight even exceeded the value of the goods themselves. Such "invisible" logistics costs make many sellers suffer in silence. More importantly, the high return rate not only increases the proportion of logistics costs but also slows down the turnover of funds, making it more difficult for sellers to operate.

Market demand is regionalized, and transportation distance becomes a key factor

The characteristics of the auto parts industry determine that market demand is regionally distributed. For example, the truck market in the central United States has a strong demand for heavy-duty parts, while the East Coast is more of a domestic car accessory market. In order to cover a wider range of customers, sellers have to face complex long-distance transportation problems. Whether it's shipping from China to the United States or secondary delivery within the United States, long distances mean high transportation costs. The combination of regionalized demand and long transport distances makes the proportion of logistics costs in the cost structure of the auto parts industry even more significant.

So under the heavy pressure of logistics costs, how can the auto parts industry break through?

Localized warehousing layout: By arranging overseas warehouses, products can be stored in the target market in advance, which can reduce the cost of long-distance transportation and improve the speed of delivery, enhancing customer experience.

Choose high-quality supply chain: Cooperate with professional auto parts supply chains.

Use big data for intelligent product selection: The platform also uses big data to provide product selection recommendations, focusing on SKUs with high profit margins and low return rates; use ACES (Automotive Compatibility) to reduce the return rate caused by incompatibility, thereby reducing costs from the source.

The high proportion of logistics costs in the auto parts industry is an inevitable result of market development, but this does not mean that there is no solution. Sellers need to start from multiple dimensions such as product selection, logistics mode optimization, and customer service, in order to find a breakthrough point in the fierce market competition. Under the "heavy pressure" of logistics costs, perhaps it is the best opportunity to achieve a breakthrough.