Another cross-border company defaults, operating multiple shell companies to raise money!

Cross-border company defaults, using multiple shell companies to raise money

Chaos abounds in the cross-border industry.

Since the beginning of the year, cases of cross-border company fraud have been flooding social media. Events such as fraud under the guise of “proxy operation,” fraudulent claims of “no source of goods,” and the establishment of shell companies specifically for the purpose of fraud have been rampant. Recently, a cross-border company that established multiple shell companies to raise money has once again swept the cross-border industry, exposing more “tricky operations” that are difficult to guard against in the cross-border supply chain.

This company was reported for setting up multiple shell companies to raise money

You may be thinking of high returns, but scammers are eyeing the money in your pocket. One seller revealed that *Fan Academy claims to be a legitimate company and falsely advertises everywhere, specializing in teaching novices how to do cross-border e-commerce. The tuition ranges from 5,988 to 10,000 yuan, with a guarantee that you will learn and be able to earn big money by managing your store for only one to two hours a day.

• Collaborating at all major ports, the trade between China and Russia reached 73148 billion US dollars in the first quarter
• The Importance of Scheduled Email Sending How to Seize Your Customer’s Golden Time
• What are the characteristics of foreign trade original source goods? Where can I find the original source goods?

They claimed that the company has government support and offers discounted tuition fees; they have established overseas warehouses abroad with hundreds of thousands of products, and sellers can use the overseas warehouse for free forever. They claimed that you can make a profit within 15 days, and many sellers have earned over 200,000 yuan in a single month. With these gimmicks, many sellers have become eager to invest, and it is now known that over 100 sellers have been scammed.

However, the reality is that the company’s information and advertising do not match, they frequently change their business address, and the Industrial and Commercial Bureau cannot find them. They have changed their names many times, with promotional names including *Hua Cross-border, *Nuo Cross-border, *Ling Zhiyuan, etc. The multiple “disguises” behind the scenes include Beijing *Hui Enterprise Management and Development Co., Ltd., Xiamen *Feihang Cultural Communication Co., Ltd., *Ling Zhiyuan (Beijing) Education Consulting Co., Ltd., etc.

Currently, multiple sellers have come together to report the company.

However, the aforementioned issue is just the tip of the iceberg in the chaotic cross-border industry. It is easy to see that there are explosive incidents happening in the industry almost every period of time. As an indispensable link in the cross-border supply chain, logistics has always had explosive incidents due to low entry barriers and intensified industry competition, and overseas warehouses in high demand by sellers have become a disaster area.

“The overseas warehouse lost 100,000 yuan worth of goods, but they only want to compensate with 2,000 yuan,” some sellers said. Similarly, there are also sellers who complain that their goods were lost by the overseas warehouse, but they only compensate with one-tenth of the value and claim that it was lost by logistics and they are just providing compensation on their behalf.

It is well-known that losing goods in overseas warehouses is a relatively normal phenomenon, but when many sellers go to argue with the overseas warehouse after losing goods, some service providers may follow the compensation terms, but more service providers are unwilling to compensate.

A seller who uses an overseas warehouse said that they may face the danger of losing goods. According to the cooperative overseas warehouse owner, because they did not negotiate with the landlord, the goods were dealt with by the landlord. However, the overseas warehouse owner had no intention of compensating. Currently, more than 10 sellers use the overseas warehouse, with a total value of goods of around 100,000 to 1 million yuan.

Regarding this issue, some sellers bluntly said that the warehouses that frequently lose goods are small. Due to the decrease in overseas warehouse cargo volume since this year, the disadvantages of some small warehouses are increasingly apparent. There are various phenomena such as stealing goods, selling warehouses cheaply, and running away. Coupled with the rise in rent and labor costs, many small and medium-sized overseas warehouses are facing the risk of bankruptcy.

“Our warehouse in the eastern United States is 10,000 square meters. Since the beginning of the year, it has been half empty, and at its highest point, it was even 70% to 80% empty,” said an overseas warehouse seller. Even some small and medium-sized overseas warehouses, due to their inability to operate, are trying to find good large warehouses for acquisition. In comparison, you will find that small overseas warehouses have relatively simple main businesses, they only do warehousing, distribution, or FBA label switching, while large overseas warehouses often have advantages in full-process services and refined services.

Unlike the previous two years when the cross-border e-commerce market was on fire and sellers’ orders skyrocketed, overseas warehouses were in short supply and sellers had to choose smaller warehouses to solve the problem of goods storage. Since the market has cooled down this year, most sellers are seeking better service experiences and choosing to cooperate with large overseas warehouses with higher cost-effectiveness, risk resistance, and comprehensive service capabilities.

As warehouse capacity is being cut, many sellers are embracing overseas warehouses

“As warehouse capacity is being cut again and again, there were only 6,000 left last week and only 2,000 this week. Does anyone have a reliable recommendation for an overseas warehouse?” a seller posted on a social platform.

Many other sellers voiced similar concerns in the comments. Some sellers said their inventory had been cut by over 1,000 in a week, and with storage restrictions, they were only allowed to replenish nearly 10,000 units, 42 cubic feet, but sending just over 1,000 units had exceeded the limit. Now they are cutting replenishment without any limit, are they trying to force us to use Amazon Web Services (AWS)?”

In the eyes of sellers, instead of the platform randomly cutting warehouse capacity and AWS’s automatic replenishment being untimely, it’s better to find a good overseas warehouse to cooperate with. They believe that compared with Amazon’s FBA, overseas warehouses also have many advantages ↓

Merchants can stock up using cargo consolidation, saving logistics costs for sellers while stimulating sales growth;

Sellers can track the delivery status of goods throughout the process, and consumers can easily return or exchange goods, enhancing the shopping experience for consumers;

All types of goods are conveniently stored, and they can be distributed directly using local logistics, with the import process following normal customs clearance procedures. This reduces the operation process and customs clearance obstacles, shortens delivery time, and reduces damage and loss rates.

The centralized transportation mode of overseas warehouses breaks through the limitations of commodity weight, volume, and price, which helps sellers expand their sales categories;

…

The natural advantages of overseas warehouses also make them stand out among many logistics forms. Many sellers also try to enter the overseas warehouse market, but according to feedback from some sellers, it is not easy to find overseas warehouse partners with strong funds and excellent business capabilities.

The assistant editor learned that SLM-Warehousing (hereinafter referred to as SLMW) is the overseas warehouse business under SLM, focusing on one-stop dropshipping of large items for over 7 years. The company has comprehensive indicators that meet the assessment standards of listed companies. Currently, its cooperative customers include the top-selling furniture categories in Eastern China, top-selling companies in Southern China, and top-selling companies in Central China, with years of overseas warehouse experience and a good reputation.

As for the cooperative logistics partners, SLMW directly signed contracts with FedEx and UPS, committed to delivering the most cost-effective goods in Asia to American consumers with the best logistics services.

At the moment when the US overseas warehouse market is bleak, many warehouses are busy subleasing and transferring, and SLMW’s overseas warehouse business is still in a high-speed development stage. Currently, a new 100,000-square-foot warehouse has been put into use in Los Angeles, and SLMW already has a 250,000-square-foot warehouse in Los Angeles.

We will continue to update BusinessDialogue; if you have any questions or suggestions, please contact us!