If you have moved away from self-fulfillment to either 3PL or dropshipping, you are better off in terms of efficiency in logistics. As the demand for your products rises, you may find managing inventory in a single location inefficient. You will have to break this limiting factor by using more warehouses. Choosing to split your inventory across multiple fulfillment centers involves utilizing more warehouse locations provided by your order fulfillment company.
There is a huge rise in demand for your products
If you are selling only a relatively few quantities of your products, splitting your inventory may not be the best move after all. You can still stick to a single fulfillment center. However, once you notice a very high and sustained demand for your products across multiple locations, you should decide how to utilize more warehouses. Splitting inventory makes it easier and faster to deliver your products to your customers.
Your products are heavy or fragile
It is simply inefficient to transport heavy goods from a single warehouse to multiple locations. The longer the distance, the costlier and inefficient. If you sell fragile items such as glass and artifacts, it is riskier to move your wares over very long distances before they reach your customers. Having a fulfillment center that is closer to customers anywhere helps to reduce the risk of damage to products. You will most likely reduce reports on defective items received on your customers’ review page. It also allows for more convenient and efficient coordination of logistics.
Your customers are dispersed in location
When your customers don’t live in a geographical area, you need to calculate the shortest distance to reach them. The best order fulfillment companies ensure that they have multiple warehouses that are strategically located to cover logistics for specific geographic areas. For instance, as you get more orders from the East, use the warehouse of your 3PL or dropshipping client that is closer to the East. For customers in the North, use the warehouse closer to them.
You want to offer express delivery of your products
Customers are expecting faster delivery of their goods. As your business decides to offer express delivery shipping, the best way to assure it is to use a warehouse closer to your clients. With this arrangement, you will be able to deliver on the same day to some locations, or 2-3 days at most. Your customers in places that are farther away can get your products within one week. Fast delivery of products also helps your business in terms of goodwill and customer loyalty.
It is better to confirm that your order fulfillment company has multiple warehouses before using them. This will save you from unnecessary restrictions later when you intend to split your inventory across multiple fulfillment centers. NextSmartShip has 5 strategically located warehouses which make logistics easy for their clients who need to use multiple warehouses to ship their products to customers. Apart from cheaper fees, you can choose any of their customizations offers that suit your business.