When looking for a fulfillment warehouse most merchants opt for a logistics center that is in proximity to them. “Fulfillment center near me” is one of the most frequently used queries on Google in that regard. However, in most cases, this is not the optimal approach to selecting your fulfillment center. Much rather you should aim for one or multiple warehouses that are in geographical proximity to your customers and main markets.
Talking about the number of warehouses, there is another common misconception; “multiple fulfillment warehouses add additional complexity to your logistics process” is not always true. In the next 5 minutes, you will learn why this is not the case and how you can improve your logistics set up with location based fulfillment.
The location of your fulfillment center(s) is decisive in determining multiple key aspects of order fulfillment. All of these factors are influenced by the geographical proximity of your warehouse to your end customer.
Shorter distances lead to:
Being in geographical proximity decreases the time it takes for orders to be fulfilled. For long-distance deliveries, couriers often add intermediary steps such as compiling products of a certain area in so-called distribution centers. Apart from the time it takes to cover the way, this adds additional waiting time. Even if you promptly pick, pack, and hand the parcel over to your courier, the customers won’t be satisfied with the shipping services.
The longer distances that have to be covered naturally also increase costs for fuel, labor, and similar. It consequently also leads to more negative effects on the environment and is an inefficient option, both in terms of profits and environmental impact.
The more steps the delivery process involves, the more error-prone it gets. Avoiding intermediary steps decreases the probability that errors occur.
By the way, all of the things mentioned before are also valid for the reverse logistics process.
The short answer is no, you don’t need to be close to your fulfillment warehouse or logistics provider. It might make sense in some cases, it might not in others.
If you supply a market that is close to where your business is located, there is no reason why you shouldn’t work with a 3PL that is close to you.
However, you should always aim for storing your products close to where most of your customers are. By the way, this is also true for the decision on whether to store your products close to your manufacturing plant. In all of these cases, always opt for location based fulfillment in proximity to your customers.
You might have asked yourself the following question: “Should I use one or multiple fulfillment centers?” As is often the case, the answer is - it depends. Let me elaborate on this.
In case you’ve only started your business and only sell a limited number of products per month to customers from your country or region, you should probably stick to one warehouse.
However, if you are growing your e-commerce business and ship internationally you should definitely consider a multi-warehouse strategy. Not only can you be closer to your customers you can also facilitate cross-border e-commerce shipments. When you are sending parcels from the UK to the EU, for example, you can use a strategy called direct-injection to increase speed and efficiently handle topics like customs clearance and similar.
Direct-injection means that you ship the bulk of your products, for example, to another country. It will be stored and fulfilled from there then. Using warehouses in multiple markets facilitates this process.
Additionally, multiple fulfillment warehouses in various locations allow you to be more flexible in your operations. They make your supply chain more robust. If, for example, due to supply-chain bottlenecks or unexpected fallouts in logistics, one of your warehouses has a problem fulfilling its service-level agreements (SLAs), you can use your other fulfillment center(s) in your network to fulfill the remaining orders.
If anything, the year 2021 has taught us how fragile the international supply chain can be, so having a fallback plan and flexibility in the supply chain, can be a great competitive advantage to have in 2022. Having a Plan B will be a competitive advantage in 2022.
Now, one of the biggest misconceptions is that using multiple warehouses automatically means an increase in complexity. However, if you are working with a 3PL company like byrd, that operates a strong European fulfillment network, you don’t have to worry about that.
Automated processes for location based fulfillment will allow you to keep focusing on your core business while using an optimized logistics strategy.
At the beginning of the partnership with us, we will help you to find the optimal warehouse location for your products. When selling a higher number of products to various international markets, our location based fulfillment experts will help you identify the best strategy for your inventory allocation and distribution.
With our all-in-one dashboard, you will be able to retrieve all the data you need to optimize your logistics operations. Of course, the data of various warehouses will be combined and handy reports will be available. Information will be up-to-date at all times.
Feel free to check out our current European fulfillment center locations.
To put things in a nutshell, the location of your fulfillment center(s) is a bigger deal than you might think. Therefore, we suggest you always try to have your inventory close to where the products end up - at your end customers’ doorstep. This will have multiple positive effects on your order fulfillment. Among other benefits, employing this strategy will result in reduced delivery times, reduced shipping costs, and reduced negative impact on the environment - three factors that have been increasingly important in e-commerce.
Online merchants selling internationally should, besides considering location-based fulfillment, also examine a multiple logistics warehouse strategy. Besides the advantages mentioned above, this will also reduce the risk of supply-chain-related fallout and bottlenecks and facilitate cross-border sales.