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When outsourcing order fulfillment to a 3PL, you may think the more warehouses you use, the more complexities you encounter. The reality is using a single 3PL with multiple locations offers many advantages.
When you have just one distribution centre, even if it is centrally located, you only have one inventory. By storing inventory in several locations via multiple distribution centres, you have a backup system for when one site runs out of a particular product you need to ship. Your e-commerce business will be competitive against those based in one shipping location.
Many unforeseen events and natural disasters prevent shipping carriers from making it to the fulfillment centre or cause delays in transit. A winter storm, flood, wildfire, earthquake, or other force will likely impact some of your orders. By splitting inventory across geographical areas, you are creating a backup stock in several locations.
Risk minimization should be a part of your growth strategy as well. Proper distribution and market coverage must be considered in advance for a successful expansion from local to international markets. In a world of constant expansion, whether it is your market reach or product portfolio, make sure to partner with a fulfillment service that enables real-time stock information, customized reports and a history of shipments and returns.
With multiple distribution points, delivery time can be cut down pretty dramatically. Instead of customers waiting for products to arrive from one central distribution centre, orders will be shipped quickly from various points to nearby addresses. The logistics and delivery of your product are among the most critical factors in e-commerce success.
Since products will be spread out over a larger area when you use multiple distribution centres, the cost of delivering an order can significantly decrease. With a unified infrastructure across your supply chain and multiple locations, transit times are cut down as you ship from the location closest to your buyer. Streamlining distribution is a huge undertaking, so considering a 3PL partner is a wise alternative.
Shipping cost is 2.85 times more important than speed in consumers’ e-commerce delivery decisions, according to a report from Morning Consult. E-commerce businesses optimize their operations by distributing products from multiple locations to meet customers’ expectations of free or reduced shipping rates.
Lastly, companies can focus on growing their business and letting their warehouse partner take care of the other challenges, such as space, hiring and training new employees, and managing additional volumes and SKUs. These details can hinder future growth if not handled correctly. With the right partner, this will be a seamless transition across all fulfillment locations.
Having multi-location inventory management in place will help your business in the long run. From saving on shipping costs to making customers happy, the use of multiple distribution centers is a proven strategy for successful e-commerce businesses.
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