When deciding which order fulfillment warehouse is the best fit, choosing a partner in the wrong location may mean an additional 4% in costs to you. Here’s how….
As the saying goes, it’s location, location, location that really counts. Your order fulfillment facility should be located near the hub (or center) of your client base. If you are selling primarily on the West Coast, then the facility you partner with should also be on the West Coast. And if you’re a regional publisher with customers in the Southeast, then you want to locate a facility in the Southeast. When you are national in scope, then finding a fulfillment partner located in the Midwest should be your focus.
Choosing the right location gives you three (3) major advantages:
- Saving money on transportation costs
- Increasing customer satisfaction with fast product delivery
- Reducing your carbon foot print
1. Saving Money On Transportation Costs
Have you noticed the higher prices at the gas pump lately? A gallon of regular is almost $5.00 per in Chicago it’s predicted to reach $6.00 before the end of summer! Every time I fill up, I can feel the pinch from the higher gas prices. If your order fulfillment facility is not in the right location, you are paying for extra fuel to have your merchandise delivered. These extra costs are being passed along to you by the carriers in the form of increased based rates and increased fuel surcharges.
The average publisher spends as much on transportation as they do on their warehousing services. If your business has a national reach and you are working with an order fulfillment facility that is located anywhere but the Midwest, you are paying almost 4% more for their services because of the transportation penalty. It costs between 5% and 7% more to ship to the U.S. population from the East Coast or West Coast than it does from the Midwest. And this will only increase as fuel prices continue to rise.
2. Less Transit Time Means Happier Customers
Another major benefit in choosing a fulfillment facility in the right location for your customer base is the amount of transit time merchandise to arrive at the customer. Today’s consumers want instant gratification. The days of people placing orders and waiting weeks for the product to arrive are over. Customers know what they want and they want it yesterday.
From a Midwest location, you can reach 58% of the U.S. population in 2 days and 99% within 4 days. However, when shipping from Los Angles you can only reach 21% of the U.S. population in 2 days and only 47% within 4 days. From the East Coast product will reach 48% of the U.S. population within 2 days and 81% in 4 days. A Midwest location provides the least amount of transit time and therefore, will increase your customers overall satisfaction.
3. Reducing Carbon Footprint
Partnering with an order fulfillment warehouse that is centrally located means a reduced carbon footprint for your company. Shipping from a warehouse that is centrally located to your customers means a reduction in the miles that products will travel to reach them, and this reduces green house gases emitted. From another perspective, higher shipping costs and longer transit times are symptoms that you are burning more fossil fuels in delivering your product.
Selecting a fulfillment warehouse to partner with in the right location will make you more efficient and you will reap the benefits of saving money, increasing customer satisfaction, and reducing green house gases.
Ware-Pak provides 3PL fulfillment services to support publishers in their competitive marketplace.
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