Chinese immigrants run e-commerce hubs out of their homes

In Eason Lin’s cramped one-bedroom apartment in Brooklyn’s Sunset Park, the living room is a maze of hundreds of boxes. All of the packages will soon ship out to Americans who shop on Temu and TikTok Shop. 

Lin, 28, hails from a small town in China’s southeastern province of Fujian and arrived in New York in 2022. Lin worked as a waiter at Chinese restaurants for a few months but grew frustrated with the grueling hours and low pay. When he heard the logistics industry was thriving, he saw an opportunity. He turned his small living room into a makeshift warehouse, offering order fulfillment services to sellers in Shenzhen, China’s e-commerce hub. 

“It’s a comfortable job,” says Lin, who wakes up each morning to check orders, print shipping labels, and pack items. He transports packages on foot, either in a backpack or on a trolley, to a nearby post office, since he doesn’t own a car. For every package he processes, he charges Chinese sellers about $1.

“I can potentially make it really big,” Lin said, hopeful despite the modest earnings. Although Lin struggles with spoken English, he is able to converse with postal workers and call shipping companies to negotiate rates on bulk orders.

Many sellers ship orders directly from China to the U.S. to keep prices low. But the U.S. government’s moves to crack down on cheap e-commerce parcels from China have pushed sellers to rethink their business strategies. Rather than relying on long-distance shipping, many now use commercial logistics companies or small warehouses like Lin’s. 

As demand for warehouses soars, many cross-border sellers are finding it more cost-effective to store their goods in the U.S. This shift is driven by the rapid growth of e-commerce platforms like Temu, Shein, and TikTok, which have made it easier for small Chinese manufacturers to tap into the American market.

On Chinese social media platforms Xiaohongshu and Douyin, dozens of accounts are advertising so-called “family warehouses,” located in cities including Los Angeles, New York, Philadelphia, and Austin. They offer fulfillment service, which means shipping out packages whenever orders are placed. They also discard excess inventory and returns. Some help re-label Amazon products when the corresponding listings or accounts get blocked, so the goods can be shipped back to Amazon warehouses under new listings. 

The business operators include ambitious entrepreneurs who hope to one day run industrial warehouses and stay-at-home mothers who treat the job as a side gig. Kara Li, a 46-year-old mother of two in Los Angeles, said she is currently storing several hundred packages of comforters and lingerie in her garage. Like Lin, she prints out shipping labels and brings the goods to a UPS store every day. 

Li, who immigrated to America years ago, told Rest of World that most of her Chinese clients were beginners in the cross-border e-commerce industry. They couldn’t afford working with bigger warehouses, which charge extra fees if the goods are not sold out in time. Li said she offers more flexibility with storage time, as long as she has enough space in her garage. “It’s not a lot of money,” she said. “It’s just I need to take care of the children, and there are no other suitable jobs.” 

Similarly, Oliver Liang, 35, operates a fulfillment business, called Logixter, out of his Los Angeles garage. Liang moved to the U.S. 12 years ago as a student. After obtaining his doctoral degree in data analytics and working for a large e-commerce company, he launched the logistics startup at home. Liang now spends more than 10 hours a day managing inventory and liaising with clients in China. He also handles returns for Amazon sellers, sorting through products that can be resold.

“It’s less risky to start the business at home,” Liang told Rest of World. “Once I get more clients, I’ll look to rent a larger space.”

The business model has been around since the early 2000s, when e-commerce entrepreneurs sold made-in-China goods directly to Americans by having them stored in the homes of Chinese students, according to Hu Jianlong, founder of Shenzhen consultancy Brands Factory. Since then, massive warehouses and fulfillment centers have emerged as part of the booming e-commerce industry. 

Amazon now owns hundreds of million square feet of industrial real estate, where the company manages inventory and sorts out packages for final delivery. “The large and medium-sized sellers will work with professional logistics,” Hu told Rest of World. “Small and micro sellers cannot afford that, and they will go to family warehouses.” 

Sellers say they sometimes prefer working with family-run warehouses because of their low prices and willingness to handle small batches of goods. Onism Chen, a Shenzhen-based Amazon seller, said he recently shipped to a family warehouse more than 300 bubble guns that were no longer popular on Amazon. The family warehouse offered to buy up the toys at $3 each, because it could re-sell the toys to local stores. “These family operations are cheaper to deal with,” Chen told Rest of World. 

Despite strained U.S.-China relations, the American consumer market remains a top growth driver for Chinese e-commerce companies. Temu’s gross merchandise value totaled about $12 billion in the second quarter of 2024, according to a report from Chinese tech outlet 36Kr. The U.S. accounted for about 45% of sales, the report said.

Thanks to a “de minimis” rule that allows parcels under $800 to enter the U.S. duty-free, small sellers have in the past shipped packages to the U.S. by air. Although delivery takes two weeks or longer, they can avoid the high costs of storing inventory in America. 

But the U.S. government recently announced a crackdown on the de minimis shipments to protect American businesses from the low-value goods from China. The regulatory change would likely commence before Donald Trump takes office, a former White House official said at a webinar. Analysts say the crackdown will pressure more platforms and sellers to store goods in the U.S., which also helps shorten delivery time. 

While family warehouses are meeting some of the demand, their capacities are limited and make up a fraction of e-commerce logistics, according to Juozas Kaziukėnas, founder of e-commerce analyst firm Marketplace Pulse. “As sellers become more successful, they will inevitably need larger space and more volume,” Kaziukėnas said. “So your bedroom service will very quickly run out of capacity.”

Industrial real-estate operator Prologis estimates that Chinese logistics and e-commerce companies accounted for 20% of net new warehouse leasing in the U.S. this year through the third quarter, according to a Wall Street Journal report. Temu itself has partnered with several fulfillment companies in the U.S. to encourage sellers to store inventory there. Ben Pu, founder of warehousing and fulfillment company ShipSage, a Temu partner, said many Temu sellers were factories new to the cross-border industry and had struggled to understand the logistics and the fees involved. “We must adapt,” Pu told Rest of World. His company manages 700,000 square feet in warehouses. “We are simplifying the process and pricing to help them quickly start selling in America.” Shein has also set up its own warehouses in the U.S. 

On a Monday morning in November, Lin printed out new shipping labels in front of his desk, behind stacks of boxes that contained wallpaper, lunch bags, utensil organizers, and sex toys. In his spare time, Lin watches American movies and TV series to improve his English.

He said the money he made from his warehouse business is not even enough to cover his $950 rent, but he hopes to profit when volume picks up. He is now looking to run a warehouse of about 2,000 to 4,000 square feet. Some of his potential clients sell auto parts and furniture, Lin said, and there’s no way his Brooklyn living room can handle those goods. “The economic slowdown in China is driving so many sellers into cross-border e-commerce,” he said. “That’s good news for both big warehouses and small warehouses.”