If you’re a regular reader of this blog, you’ll know of the advantages of maintaining inventory across many different distribution centres. From helping you meet increased B2C and B2B customer demands for faster delivery times, to reducing transportation costs, the benefits are undeniable.
But, even with an appreciation of what’s at stake, that doesn’t tell you when your business is ready to make the leap
3 Signs That You Should Consider Multiple Distribution Centres
If your business meets one or more of the following criteria, you should at least do a cost analysis of maintaining multiple distribution centres versus keeping your fulfillment in a single location.
- You Ship Outside of Your Local Area – This one can seem obvious, but you’d be surprised at how many companies simply continue to ship from their single, main warehouse, even after they start making significant national and international sales.
- You Are a B2C Shipper – Your competition is Amazon, eBay and Walmart. Even if your product is more specialty/niche, you are still dealing with expectations of receiving orders within a couple of days at most.
Of course, if you ship standard consumer products, even in smaller volumes, you must be ready for same-day deliveries and that isn’t going to happen out of a single fulfillment centre.
- Your Products are Heavy or Oddly Shaped – Transportation rates are one thing for standard weights and dimensions. But as you get further away from the standard, rates seem to go up exponentially. If you haven’t done an analysis recently, increased volumes or broader markets may have changed your margins, and made your one-warehouse-shipping model more of a drag on your bottom line than you think.
Make The Transition Easier – Starting with helping you understand all the costs of maintaining only a single distribution centre, and the added expenses of managing your own warehousing services, inventory management systems, and more, a third-party fulfillment company like PiVAL International can help you take advantage of splitting your inventory across many distribution centres.
To find out more about reducing your operational costs, check out our post “5 Steps to Streamlining Operations for Business”.