Some days you might feel like you’re caught between the proverbial rock and a hard place. Like clockwork, carriers increase their charges. The competition is absorbing more of their shipping costs and offering “free” shipping. The customer’s “point, click and deliver” mentality is here to stay.
Amazon, with DCs in almost every state, can deliver to 44% or more of the US population in 4 hours or less. CEO Jeff Bezos says Prime members -- who get free 2 hour delivery on some products -- now exceed 100 million globally. It has become routine for millions of shoppers to buy commodity items like paper products, soft drinks, pet products, etc., avoiding trips to the store.
The cost of shipping and the time to get the package to the customer affects many customers’ decisions to buy from your business. As these trends continue, multiple distribution centers may be the best bet to reduce shipping costs and deliver faster to the customer. As an alternative to internally managing additional facilities, we recommend companies evaluate the use of 3PL as a major way to reduce start up investment and shorten the schedule. You may be able to reach 80% of your customers in 1-2 days via ground from two strategically placed centers.
However, multi-DC strategies are not the right strategy for every company because of the added expenses, inventory required and managing a second remote center.Read More >