This document summarizes the key differences between decentralized/local fulfillment versus centralized/cross-border fulfillment models across several factors: Decentralized fulfillment provides faster delivery lead times, is more resilient to supply chain disruptions, and better suits heavy, bulky, or regulated products. Centralized fulfillment has longer lead times but offers potential cost savings through consolidated volumes and inventory management. The document outlines various tradeoffs between the two models in areas like customer experience, environmental impact, costs, product compliance, duties and taxes, returns handling, and systems complexity.

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Item Decentralized / Local / Multi-node fulfillment Centralized / Cross-border fulfillment
Delivery lead-time Faster Longer
Supply Chain resiliency More resilient, supports “just-in-case” scenarios More vulnerable, “just-in-time” logistics are subject to supply chain
disruptions
Best suited for Heavy and bulky products, high value / volume products, and
products with lithium batteries
Smaller, lightweight and low value items
Customer delivery
experience
Great, no actions needed Consignee actions may be needed, for example, carrier may require
ID number for import clearance
Environmental impact Typically, lower if ocean cargo is used for the middle mile delivery. Higher, if air cargo is used for the middle mile vs ocean.
Supply-demand
complexity
More distribution nodes > more complexity managing supplies Fewer inventory nodes, faster inventory turnaround, more flexibility
Fulfillment fees & costs Potentially higher, especially in high-wage markets Potentially cheaper, higher consolidated volume, higher bargaining
power
Transportation costs Although last-mile costs are lower, you may spend more on middle
mile transportation
Potential total transportation cost savings in case of small, light-
weight products, if delivery speed is not critical
Flexibility of goods
movement
Once goods are in-country (imported), moving to another market can
be costly (duties, tax, extra transportation)
Well suited for situations where end-customer demand fluctuates, is
not predictable
Administrative costs It may require local entity registration to support imports / local retail
sales > higher administrative costs. Potential local tax deductions.
Enables use of more centralized sales (single sales entity). However,
any destination taxes paid are not typically deductible.
Product compliance
requirements
Formal imports (B2B) have stricter labeling and other product
compliance requirements
Imports for personal use are typically exempt from local manual,
labeling etc requirements.
Import duties & taxes Collected in full, for all goods Potential destination country duty & tax savings using de-minimis
schemes
Cashflow management Import duties and taxes are typically prepayments Potential to delay duty & tax payments in destination country by
utilizing Free Trade Zones
Returns management Easy local returns - typically mandated by local consumer laws. Can
drive higher returns rate.
Local consumer regulations do not apply to international purchases.
International return shipment fees are higher and take longer time.
Systems complexities Usually requires multiple 3PLs, all with different systems and
integrations. Higher potential for things to go wrong..
Single 3PL can bring streamlined and more uniform systems
integration capabilities. Cheaper maintenance.
mika.sarkkinen@ingrammicro.com