In the industry of commerce where it involves order fulfillment, the truth is this: having multiple warehouses is an advantage. At some point during the growth cycle of your business, it makes sense to operate more than one warehouse. Especially in this culture where speed is equal to efficiency.
Your warehouses serve as your fulfillment centers, as the stock of items that you keep and manage in them are the ones used to fulfill customer’s orders. As such, your warehouse operations boost your competitiveness in the market.
If you are on the edge with renting, purchasing, or building another warehouse as a sound business strategy, here are the advantages that operating multiple warehouses has:
Cuts down lead time
As aforementioned, customers nowadays look at speed. They tend to place significant weight on quick delivery. How fast can you ship their order to them? Many expect a two-day turnaround. The quicker they get their order, the happier and the more satisfied they will be.
Having multiple warehouses operating can certainly help you achieve that expectation, maybe even exceed it. Guaranteed that your managers and workers are functioning as a unit then that is a high possibility.
It makes up for central warehouse inefficiency
There will come a point in your business wherein shipping from your main warehouse will become inefficient. The cost of shipping decreases while the shipment size increase. Now having more than one warehouse comes into play.
Moving large quantities of items between one warehouse to another is much preferable than transferring small orders directly from a central warehouse. This saves money and time.
Spreads supply chain risk
There are many risks that can disrupt the shipping and delivery of items to their target destinations. For instance, a storm can delay the expected lead time of shipping or even a warehouse accident. Owning more than one warehouse means splitting your inventory, which also means you will have back up in case of an emergency. It’s always better to be safe than sorry.
Drives down shipping costs
Given that you will spend a greater investment in a new warehouse and stock its inventories, worry not for there are costs savings elsewhere.
Since you will be running multiple facilities, choose the right locations for them to be able to make faster deliveries which will lower shipping costs. Store inventories closer to your customers to make shipping faster.
It is important to note that investing and operating more than one warehouse involves spending a considerable expense on your behalf. Think about the current state of your business’ growth cycle and be aware of what you currently have before proceeding.
To summarize, the advantages of operating multiple warehouses’ ultimate goal is to make your business as competitive as it can be and should you engage in this endeavor know that you are a step closer to that end.