Have you ever thought that your warehouse may be costing you more than you think? Ecommerce merchants often believe that using multiple warehouses will lead to greater complexities and extra costs. Actually, it’s the opposite! Having access to multiple warehouses and fulfillment centres involves a series of benefits that directly influence a business’ revenue. As a matter of fact, assuming that you have a customer base spread in different geographies, relying on a single warehouse can become costly. Let’s explore why and how to distribute inventory across multiple warehouses to obtain significant cost savings!
2 majour challenges in relying on a single warehouse
1) Longer shipping times: Are your customers willing to wait?
Relying on a single warehouse and fulfillment center can limit your efficiency in serving customers that are further away from the area.
2) Higher shipping costs: Are your profits suffering?
If all of your inventory is stored in a single location, shipping orders to customers that are not in the area means that shipping costs escalate. These costs can either be passed on to customers, and therefore discourage potential sales, or otherwise be absorbed by the business, sacrificing profit margins.
How can you distribute inventory across multiple warehouses?
If you outsource order fulfillment to a third-party-logistics provider like eLogy, you will have access to multiple strategic warehouses to build a solid marketing and distribution plan. Here are two main strategies that focus on different aspects of business growth
Strategy 1) Proximity and efficiency. Get closer to customers!
A primal aspect to consider is proximity to customers. You can analyse your customer demographics thanks to elogy’s analytics tools and understand which are your key markets. In this way, you can place your orders closer to your customers to reduce carrier time travelled and shipping costs. Moreover, our predictive analytics tools will allow you to predict demand and adjust inventory levels accordingly to avoid excess stock or out of stock situations, thereby catering to customer demand effectively.
Strategy 2) Market expansion. Tap into new markets with minimal investment.
You can utilise eLogy’s resources, in this case our multiple strategically located warehouses, to access new markets and increase your potential sales opportunities. In this way, you will be able to expand your business reach with minimum investment.
3 reasons to distribute your inventory across multiple strategic warehouses
1. Save on logistics costs. Ready to unlock the real secret to competitive pricing?
Storing inventory in a single warehouse often results in longer transit times and higher shipping costs, which can discourage customers and increase cart abandonment rates. On the contrary, stocking inventory closer to customers, means shipping distances are shortened, thus reducing overall logistics costs, like fuel, carrier fees, and handling charges. This significant lowering of shipping costs will allow you to offer more competitive pricing and a better service.
2. Increased delivery speed. Make customers love you!
Customers love it when they can enjoy fast delivery. Storing inventory into multiple warehouses that are closer to customers means the distance each order needs to travel is shortened. In fact, the risk of delays and longer waiting times is reduced drastically. Additionally, you might even consider offering same-day delivery for delivery destinations that are close to the warehouse! Simply put, orders reach your customer doorsteps faster and at lower prices: this is a competitive advantage which will attract all those online shoppers who prioritize quick and affordable shipping!
3. Mitigate risk. Always have a backup plan.
Distributing inventory across multiple warehouses safeguards your business against potential disruptions. For instance, if a fulfillment center is affected by sudden operational disruptions or adverse weather conditions, storing inventory in other locations means you always have a backup plan ready to save your day.
eLogy’s tech-driven warehouses at your disposal
Streamline fulfillment, accelerate satisfaction! eLogy’s warehouses are powered by digital warehousing technologies that automate SKU distribution and streamline order fulfillment. As an online merchant, you need to make sure orders reach your customers quickly and efficiently, while minimizing shipping costs. Once an order is placed, our system automatically routes it to the nearest warehouse, ensuring fast and cost-effective fulfillment.
Gain end-to-end visibility and maintain control over your inventory! With our real-time tracking tools, you’ll have complete visibility into every movement of your stock, from the moment it enters the warehouse until it reaches your customers. This comprehensive visibility is crucial for accurate analytics, helping you gain valuable insights on inventory, demand, and to create solid strategies based on reliable data.
