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Where Should your E-Commerce Fulfillment Warehouse be Based? Choosing a 3PL Based on Location

Map of the United States

You know what they say in real estate: location, location, location. Well, the same principle applies to the real estate of your fulfillment warehouse. Picking the right spot can have a huge impact on everything from import costs to your ability to offer competitive shipping rates to your customers. Let’s take a look at the factors that will influence your decision.

CUSTOMER BASE

Is your business regional? Or national? Do you get a significant portion of your orders from a specific section of the US or do orders come in from all over the country? For e-tailers who have a strong regional customer base, choosing a warehouse in that part of the country can help you save money on shipping (because your packages won’t have to travel across many shipping zones) while getting you closer to that holy grail of e-commerce: offering free two-day shipping.

SUPPLIER LOCATION

While supplier location shouldn’t be the primary factor in choosing a warehouse location, it can be an important secondary consideration. Let’s say for example that your primary customer base is in Boston and New York, and your goods are manufactured in Florida. A warehouse in Pennsylvania keeps your goods close to your customers so you can offer great shipping rates to them. But a warehouse in South Carolina helps you save money in reviewing your goods, while still allowing you to offer the same shipping rates to most of your customers.

For e-tailers who have foods manufactured in Asia, having a West Coast warehouse may or may not be helpful. While you need someone you can trust to claim your goods at the port and handle delivery to your 3PL, you’ll need to perform a cost benefit analysis to determine if the money you save on drayage is worth any sacrifices you might make on ship times to customers.

MULTIPLE LOCATIONS

Once an e-commerce company reaches a certain size, distributing product over multiple warehouses is a game-changer. Good 3PLs use inventory management software that can analyze your customer patterns and optimize the storage of your goods based on those demographics. Even if you aren’t big enough to use multiple warehouses today, choosing a fulfillment partner that has them means you’ll be able to transition seamlessly when that time arrives.

If you still have questions on how to choose a 3PL partner based on their fulfillment warehouse locations, we’re happy to help. You can call us at 1-866-289-9010 or email us at sales (at) owd (dot) com.