When planning your brand’s sales and distribution goals, it’s important to consider the benefits of storing inventory in multiple locations. While it’s often best for new brands and small businesses to start with one strategically-located warehouse, it’s never too early to plan for your company’s expansion.
If you want to ship to customers around the world, multiple locations can enable you to reduce shipping costs, speed up delivery time, and streamline your operations. Read on to learn the benefits of using multiple warehouse locations.
As your company grows and collects sales data at a faster rate, you can more effectively analyze your target consumer’s buying behavior. If your products are primarily sold in a few states, choose a warehouse location in or near those regions.
If you notice that customer orders are spread over multiple regions, it may be time to upgrade from one warehouse to multiple fulfillment centers. With the support of a reliable third-party logistics provider (3PL) and their expert team, you can pinpoint the best inventory planning and fulfillment strategy based on your unique sales history and goals.
When possible, find out the locations of your competitors’ warehouses. By learning more about their resources, you can devise a plan to outperform them. For example, if your major competitor is only able to offer 4-5 day delivery to California and you want to position yourself to take over that market, consider using a warehouse in California that enables you to provide 1-2 day shipping to California addresses. By using geo-targeting, you can advertise this benefit to website visitors with IP addresses in California and increase your conversion rate in that region.
Where are the majority of your orders being shipped to? If your customers are located in multiple regions, it is worth discussing the possibility of using a fulfillment center.
Brands that utilize 3PL services with multiple warehouse locations benefit from the ability to ship products from the warehouse closest to each customer. This can instantly reduce your shipping costs on every order. If your company offers free shipping, this will result in higher profit margins on each sale.
Shoppers have come to expect free shipping as a standard practice. If your company doesn’t currently offer this benefit, then storing and fulfilling inventory from multiple warehouses may reduce your costs and allow you to offer fast, free shipping. This will delight shoppers and help your business compete with other sellers in your niche.
How long does it currently take for your shipments to be delivered to your customers? Are cross-country orders taking too long to arrive? By using multiple strategically located fulfillment warehouses, your company can offer transit times of 1 to 3 days to the average consumer (when shipping within the country). Faster delivery windows are a huge benefit to potential shoppers and can encourage them to choose your business over a competitor’s website.
With warehouses in strategic locations, you will lower the average delivery time to the highest amount of customers. The less time it takes for your customers to receive their orders, the fewer “Where is my order?” emails your customer service team will receive. Overall, your customers will be happier with their shopping experience and more impressed with your brand.
Faster delivery can be the difference between your customer thinking, “Wow! I received my order so quickly!” or “The product is great, but it took forever for them to ship it.” Even though the only difference is their order fulfillment time, it will make a big impact on the customer’s experience of your brand.
Ultimately, the future of ecommerce will be about faster fulfillment and delivery. As one-click shopping and drone delivery become our new reality, shoppers are likely to have less patience for waiting on orders.
Another benefit of multiple locations is that you can offer a later shipping cut-off for online orders. If your only warehouse is located in Florida and their daily fulfillment cut-off time is 2:00 pm EST, then a customer ordering after 11:00am PST would not have their order shipped out until the next business day. You can also use this to your advantage by showing a countdown timer on your website. For example, “Place your order in the next ___ minutes for free same-day shipping.” We recommend A/B testing this to see how it impacts your conversion rate.
If you’re still not sure whether your company can benefit from multiple warehouse locations, reach out to our team for a free consultation. With multiple warehouse locations including Florida and California, ShipMonk can help you streamline your fulfillment logistics, boost your overall efficiency, and support your continued business growth.