Why You Need a Fulfillment Provider with Multiple Fulfillment Centers
When choosing a fulfillment provider, one of the key things you should be looking for is a fulfillment company that has multiple fulfillment centers.
Splitting your inventory across fulfillment center locations (known as distributed inventory) offers many advantages when it comes to eCommerce fulfillment. What are they? Get ready to find out!
What is a Fulfillment Center?
A fulfillment center is the physical location where a third-party logistics (3PL) provider, more commonly referred to as a fulfillment provider, fulfills customer orders for eCommerce sellers.
The Benefits of a Fulfillment Provider with Multiple Fulfillment Centers
There are many advantages of working with an order fulfillment provider who has multiple fulfillment centers. Here are four major ones!
1. Faster Shipping Speeds
Amazon Prime-delivery speeds are now the norm—which means modern consumers are expecting every online retailer (even if they aren’t Amazon) to be able to deliver on the same timelines. Luckily, having a fulfillment provider with multiple fulfillment centers can help you align with these consumer expectations. How? A key factor of shipping speeds is the proximity of the fulfillment center to the end customer. Think about it—if you only have one fulfillment center and your customer lives across the country, it’s going to take a bit longer to get your product to them. On the other hand, if you have multiple fulfillment centers and can strategically fulfill orders at the closest center to each customer, your products can get to them faster!
The bottom line here? When choosing a fulfillment company, don’t overlook where their fulfillment centers are located. Do you market research to identify where large clusters of your target audience may be located and look at your purchase history to see if there are specific areas where you are sending lots of orders. Then, look for a fulfillment provider who has fulfillment centers in areas that align!
2. Enhanced User Experience
The order fulfillment process has a huge impact on the customer experience. Like we just mentioned, modern consumers expect fast shipping speeds—and unorganized fulfillment logistics that draw out delivery timelines will leave customers frustrated when your product doesn’t arrive on their doorstep on time. On the other hand, if you are able to strategically send products from your fulfillment centers based on the customer’s location, it will result in faster shipping speeds and happier customers!
Why is this so important? As an eCommerce business, you’re operating in an incredibly competitive and saturated industry. With so many online businesses selling similar products that can do similar things at similar price points, you need another way to differentiate. Your customer experience can be that key differentiator! If a customer has a pleasant experience with your brand, they’ll want to buy from you again. They’re also more likely to recommend your business to their friends and family, giving you an amplified brand reach that can help you attract new customers too! So, if you can provide a great customer experience, you can build brand loyalty that drives repeat business from your current customers and make it easier to attract new ones.
3. The Ability to Spread Risk
Keeping your inventory in multiple fulfillment centers helps you be prepared in case orders can’t leave a particular fulfillment center. Bad weather is the most common thing that prevents shipping carriers from making it to the fulfillment center or causes delays while orders are in transit. For example, if your only fulfillment center is in Minnesota and there is a huge snow storm, your orders are likely going to get backed up.
So, when you split your inventory across fulfillment centers in various geographic areas, you’ll have backup inventory in other locations. This can prevent shipping delays due to bad weather conditions and ensure that your delivery timelines stay on track!
4. Lower Shipping Costs
While it does require a greater initial investment to purchase more inventory to have on hand at multiple fulfillment centers, you will realize other cost savings over time that make the up-front cost worth it!
With today’s expectation of two-day shipping, a longer time in transit can prevent your customers from buying from you again. If they have the option to pay for expedited shipping, there is often a significant cost to pay for the rush delivery—and high shipping costs are one of the top reasons for shopping cart abandonment. When you ship from only one fulfillment center, it becomes even more costly for your products to reach your end customer. This can drive up your shipping costs and lead your customers to look for other online retailers with a lower cost to ship. On the other hand, storing inventory closer to your customers helps lower shipping costs because orders will have to travel a shorter distance. After all, it's much less expensive to ship an order 100 miles than 10,000 miles!
Improve Your Order Fulfillment Process with The Fulfillment Lab!
In today’s hyper-connected, fast-paced business landscape, having just one fulfillment center likely won’t cut it.
By working with The Fulfillment Lab, you’ll have access to our 14 total fulfillment centers (2 domestic and 12 international). The result? Faster deliveries and an enhanced user experience that mean more revenue for your business!
Ready to start transforming your fulfillment process? Contact us today!