While outsourcing order fulfillment to a third-party logistics company, we often think that multiple warehouses increase the complexities you encounter. In reality, using a 3PL with multiple warehouses has more advantages than you expect. The main advantages are the cost-cutting and streamlining of the fulfillment process. Here are 5 reasons why multiple fulfillment centers benefit eCommerce.
While looking into the operations of the fulfillment procedure, you need to make sure that your customers are in the proximity of the location of the warehouse. Since you have no control over that, you can make sure that your warehouses aren’t just located in a single place but are scattered all over. Read why most e-commerce companies store their products in more than one fulfillment center.
Benefits of Using Multiple Fulfillment Centers
Lower the risk of inventory issues
Splitting your inventory across multiple warehouses helps your team to be well prepared for unpredicted occurrences. In case of bad weather, an order can be processed and shipped from a different warehouse. They are many external factors like natural calamities that could cause a delay while the shipment is in transit. In such instances, splitting inventory proves to be useful. When you split your inventory across various geographical areas, you have the advantage of backup stock in other locations.
Speedy delivery
E-commerce websites are setting the bar high for other smaller businesses with their instant deliveries. Today’s standard time for delivery is 2 days. A customer would opt not to buy a specific item if the delivery takes too long. Using multiple fulfillment centers allows you to store your products closer to your customers, which indirectly results in faster delivery.
For instance, if you utilize fulfillment centers located in Mumbai and Delhi, you can ship an order on the same day to people living in both the cities. On the other hand, if all of your inventory is stocked up only at the warehouse in Mumbai, it will take you a long time to deliver your product to Delhi.
The goal is to give your customer maximum satisfaction. Nothing more than a quick delivery makes a customer happy. The faster the customer receives an order, the happier the customer is.
Reduced overall shipping costs
Shipping products from a single warehouse increase the distance and the time it takes to reach your end customer. A longer shipping distance means higher shipping charges. The math behind this is simple, the cost that you will be bearing to ship an item across 50kms is lesser than what you’ll be spending to ship it across 500kms.
Competitive advantages
If offered free shipping, who wouldn’t want it? Most e-commerce customers expected free shipping or reduced shipping rates these days. Providing services from more than one fulfillment center reduces the costs and you gain a competitive advantage. Your 3Pl partners can decide which warehouse is located closest to the address of delivery. This helps you find the cheapest parcel costs and inventory accuracy benefits.
As a growing business, being cost-effective is necessary. Storing inventory at multiple places is beneficial for both you and your customer. High shipping rates are the main reasons for shopping cart abandonment.
Focus on the growth of your business
Lastly, companies can solely focus on the growth of their business and your warehouse partner can take care of recruiting and training new employees. Managing additional volumes and SKUs can also be taken care of by your warehousing partner. With a trustworthy partner, this will be a seamless transition across several fulfillment locations.
To find success in the competitive e-commerce space, having multiple fulfillment centers gives you a head start. Distributing your fulfillment centers in metro areas is a great way to ensures your orders are delivered quickly and at a reasonable cost.
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