Why should you even consider diversifying your warehouse locations?
As you might already be aware, the COVID-19 outbreak has affected all areas of ecommerce, but some more than others. Shipping carriers in particular have seen huge disruptions to their normal ways of working. More specifically they’ve seen an increase in demand and a reduction in staff, all the while having to comply with new changes in how goods should be handled and delivered.
Ultimately, all of this has led to an increase in the time it takes for your products to be shipped to your buyers. To mitigate against this challenge, some sellers have been looking at ways they can continue operating, without relying too heavily on the carriers that can’t always ship goods on time.
One approach that has proven effective is to increase the number of locations stock is held in.
In fact, by spreading stock across multiple warehouses, each located in different areas of the country or globe, sellers are making sure they’re fulfilling orders as closely as they can to the end buyer.
Managing multiple warehouses can come with its own set of problems.
You need to make sure that each warehouse has enough stock to meet local demand, and you need to keep a keen eye on where your stock is moving so nothing either gets sent to the wrong place or lost in transit.
Having good, structured and audited communication between your warehouses is key if you want to take a more agile approach to product storage.
Multiple warehouses = faster deliver times
Increased delivery speed tops the list of reasons to use multiple warehouses. Whether your clients are medical device fabricators whose products are needed quickly to save lives or you cater to college students who want their customized school gear yesterday, speedy delivery time is a must.
Housing your inventory in different warehouse locations close to key segments of your customer base is a great way to boost delivery speed.
Easier click&collect for your customers
Depending on the nature of your business, you may have customers who prefer to arrange their own pickup and delivery. You also may receive inquiries from prospective distributor who want to see your inventory and operations prior to deciding to buy from you.
Having multiple warehouse locations makes it easier for prospective buyers to personally see your inventory and how you prepare orders for shipment. This is especially important for international customers who prefer to conduct face to face site visits to confirm a supplier’s legitimacy and inventory availability prior to purchasing.
Reduced carbon emissions
Yes! Think about it like this, what if a customer needs health products supplied by a manufacturer that is over 1000 miles away? Whether delivery occurs by ground transportation or by air, the fuel consumption is significant.
But if the supplier had multiple warehouses that had those products in stock, they might only need to travel 200 miles, or less. And they would get their products much faster and cheaper, it’s a win-win situation!
Managing potential risk
Having your products across markets in different fulfillment centers enables you to manage possible risks with distribution. There might be delays with incoming goods transit or for example natural catastrophes that prevent a freight company from delivering items to the warehouse.
At some point, even if unlikely, a strike, winter storm, flood, wildfire, earthquake, or even local holidays might impact some of your orders. More likely, though are the problems that occur inside the warehouse, such as fire, water damage, personnel shortage, seasonal peaks, etc. When you manage your inventory with multiple locations, you will have a backup inventory in other warehouses. Managing risk with delays or lost stock, it is better to be safe than sorry.
How do you choose a new warehouse location?
When it comes to selecting the warehouse location, one of the most important considerations is whether it’s near your customers. Since your customers are likely not in the same region, using one fulfillment center can make it nearly impossible to efficiently reach the majority of your customers. When using multi-warehousing, each time an order is placed on your online store, the closest warehouse will automatically fulfill the order.
While it might be harder to manage multiple warehouses compared to just a single one, we are firm believers that having multiple warehouses can be great for your business and customers alike. It’s important to diversify your inventory and spread it across multiple warehouses. Clients get their products faster, cheaper and with less carbon emissions.
Sure, it’s definitely more expensive and stressful to manage a handful of warehouses, but then again, if it pays off in the long run, we’d say it is worth it, right?