Why Your Fulfillment Location Matters
There are many reasons why you should take the location of your fulfillment center(s) into careful consideration. At its core, the effectiveness of your choice of location is mainly influenced by geographical proximity within your supply chain. Simply put, your fulfillment center(s) should be located as close as possible to your end customer on the one hand, and place of production on the other. This might seem tricky at first, but with a little research and guidance, it should be possible to find a location that suits your needs. When your business’s supply chain is running through your carefully curated fulfillment center(s), your business will be the first to reap the benefits of decreased environmental impact and a streamlined fulfillment flow throughout.
Below, we will guide you through some commonly asked questions regarding the location of your fulfillment center, and how it can make or break your e-commerce business. When you’re done reading, we hope that you’ll have learned a little bit more about:
- Why fulfillment location is so important,
- whether you should have more than one fulfillment center, and
- how fulfillment location can improve your business’s sustainability.
Why Is Fulfillment Location so Important?
It goes without saying that keeping things close to home will make for a smoother fulfillment process overall. There are many benefits to choosing a fulfillment center in close proximity to your business headquarters in terms Still, it may not be quite so simple to find the perfect middle ground where every stage of your supply chain is accounted for. In order to maintain speedy and cost-efficient deliveries for one, and reduce the number of internal processes in your supply chain for another, you need to make sure that your fulfillment center stays within close proximity to both your customers as well as your place of production. This is easy enough to achieve for a business with a regional supply span, but as soon as you enter the international market the decision of where to house your fulfillment center becomes a balancing act. Alas, with the size and span of your market in mind, always make sure that your fulfillment center(s) is/are in as close proximity as possible to your customers as well as your place of manufacturing.
It is often thought, wrongly so, that outsourcing your logistics through a third-party fulfillment center is much more expensive than keeping things in-house. On the contrary, employing an external fulfillment center will almost always save you and your business money in the long run. For one, outsourcing your logistics management to an external provider will save you the costs of employing a logistics expert in-house. Instead, the fulfillment center will handle the management of your fulfillment process, enabling you to focus your financial resources where they are needed most in order to meet your KPI:s. As your business grows and reaches new markets, the value of having outsourced the entirety of your logistics management will keep multiplying. In addition to this, outsourcing your logistics through a fulfillment center will overall improve and cost-reduce your shipping and returns. Compared to in-house logistics departments, 3PL companies tend to be well-connected and nurture close relationships with shipping companies, both national as well as international.
Not only will a location-based fulfillment center save your business time and money, but it will also – perhaps most importantly – lead to a satisfied customer base. In a post-information, digitized society, the demands on speed, affordability, and comfort seem to only be rising among e-customers worldwide. Mold your supply chain after your customers’ needs, keep the delivery costs down, and you will soon see a substantial spike in your sales.
Do You Need More than One Fulfillment Location?
When discussing fulfillment solutions, a common misconception reads that having multiple fulfillment centers for your logistics management equals an unnecessarily complex supply chain. This assumption may be true for smaller businesses that are just starting out; having multiple warehouses with a limited amount of stock – and a limited amount of money – will more likely upset rather than benefit your fulfillment process. Things start to change as soon as your e-commerce business starts to grow, however, and for e-stores operating on an international level, a multi-warehouse strategy is key to keeping your supply chain up-to-date.
Besides staying in close proximity to your customers and thus ensuring fast and cost-efficient deliveries, there are two main reasons why employing multiple fulfillment centers could be a good idea for your business. First of all, by spreading out your fulfillment centers to occupy several areas within your market it is possible to facilitate international, cross-border shipping. By employing a method known as direct injection, import duties that are otherwise customary can be significantly decreased and sometimes entirely consolidated. Many fulfillment centers are in close contact with or even occupy some “injection points” from where the direct injection can be performed.
Finally, having more than one fulfillment center handling the logistics of your stock and inventory will allow you to remain flexible and prevent unnecessary risks from negatively impacting your supply chain. As long as you maintain more than one fulfillment location, unexpected logistical fallouts that affect e.g. your WMS (Warehouse Management System) will never jeopardize your fulfillment process as a whole.
How Can My Fulfillment Location Improve Sustainability?
Choosing the right geographical location for your fulfillment center(s) is one of the most effective ways to decrease your supply chain’s environmental impact. As we have already touched upon, reducing your shipping distances and streamlining your overall fulfillment process to include fewer steps along the way will automatically reduce your ecological footprint. Still, finding the ultimate location from where all stages of your supply chain can be accounted for is oftentimes easier said than done. There are, however, digital resources that can allow you to carefully monitor your markets and make conscious decisions towards improvements in sustainability. When deciding on your fulfillment center(s) location, we would recommend you to make sure that the 3PL in charge is integrated with a Warehouse Management System (WMS) that offers smart order routing. With access to such data, you and your e-commerce business can automatize the process of selecting the right destination for each individual order to be fulfilled in a way that remains environmentally friendly.
Looking toward the future, it is our firm belief that now is the time for the logistics industry to start implementing technological solutions and digital automation in order to keep up with the direction in which e-commerce is headed. Not only does digital interfaces such as the Prime Penguin Platform reduce costs, time, and unnecessary human error in the dealings with your e-commerce logistics; automized and digitized supply chains that rely heavily on data collected through advanced WMS and digital interfaces are better adapted for a green commercial future.
Find 3PL with Prime Penguin
How does Prime Penguin fit into the ordeal of setting up and outsourcing your logistics to an ideal fulfillment location? The answer is simple: Prime Penguin provides e-commerce businesses with a cost-efficient and scalable solution to connect their e-stores with warehouses and marketplaces worldwide. We help you procure, outsource, and maintain all your logistical proceedings in a user-friendly digital interface. By leveraging a network of pre-integrated logistics partners and market-leading integration technology, with headliners such as Shopify and WooCommerce as part of our grapevine, the Prime Penguin Platform makes sure that your commercial data is flowing between your sales channels and the warehouse management system (WMS).
Are you looking to expand your e-commerce business with the help of external 3PL suppliers? Do you want to ensure that your e-store is primed and scalable with the right market integrations? Skip the hassle of logistical negotiations and unnecessary investments, and let Prime Penguin help you locate and connect with trusted industry experts. Together, we will streamline your fulfillment process from start to finish and make sure that it meets all criteria for future growth and sustainability. Fill out our procurement form to request a price quote or schedule a free consultation.
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