Why a Central Location Matters Most For Your eCommerce Fulfillment Operation

fulfillment warehouse

Do you sell online? Then you should know that many online retailers ignore the very important topic of location when it comes to their fulfillment and shipping operations. And ignoring that topic is an error that will cost you money.

Location has a much bigger impact on your operating costs and service to your customers than you might realize. Choosing the right location to store and ship customer orders can do more to improve your margins than any other decision you make about your eCommerce operation.

Why does a central location matter so much?

First, the distance your orders need to travel to get to customers has a direct impact on costs. A longer delivery means more drive time and more expenses to keep the trucks on the road for your carriers. This translates to more shipping cost.

To minimize your shipping costs, your fulfillment center should be as centrally located in the U.S. as possible. This optimizes the average distance of your shipments, and optimizes your shipping expenses. Remember – you’re potentially paying shipping twice on every item in your store. There’s the inbound cost of getting your products to your warehouse, and there’s the cost of shipping it out to customers. Having a bad warehouse location is a double hit to your bottom line.

fulfillment warehouse

Using an eCommerce fulfillment warehouse in the Midwest is the best way to realize the benefits just mentioned. A central location not only lowers shipping costs but also improves transit times. Orders that are delivered fast = happy customers.

Another item worth noting – the cost of doing business is less expensive in the mid-part of the country. When compared to the east and west coasts, Midwest rent and wages are lower. This means the rates you’ll pay with order fulfillment warehouses in a state like Iowa will always be less. Think about it – much of the cost of fulfilling customer orders is labor. And a lower hourly labor cost translates directly to a lower per order fulfillment cost.

Added bonus – real state is generally less expensive in parts of the Midwest. A big part of operating an eCommerce website includes the cost of storing your products. Lower rent means lower costs for storage. It’s bad enough to have capital tied up in unsold inventory. Overpaying for storing that inventory makes it all the worse.

Need another bonus? The Midwestern work ethic – it’s a real thing. People work hard and are very conscious of doing a good job. This means quality work and accurate fulfillment when your customer orders go out the door.

Contact PFC to see how you can leverage the benefits of a centrally located fulfillment operation. We have fulfillment and shipping locations in Iowa and can provide you with a quote so you can see the big cost savings for yourself.

Category: Fulfillment Insights