Distribution Warehouse Location Strategies
Warehouse location: Where should you pick?
What’s the secret to finding the perfect place for your warehouse? In the immortal words of realtors across the globe: it’s all about location, location, location! And also interior setup, but we’ll get to that later. When it comes to the timely delivery of your inventory to your customers, your warehouse location is priority one.
When you’re in the business of efficiently distributing products, warehouse location is key. Beyond shipping times, physical location can have a big impact on your overhead costs. Certain cities offer cheaper rent, wages, or utilities such as electricity. This can pack a big profitability punch. In today’s hyper-connected day and age, it’s well worth giving careful consideration to the physical locations of your warehouses, regardless of where home base is.
Think like a logistics pro.
Logistics can be a scary word. Lean into it, though, and remember that there’s always help if you need it.
Now that you’ve got the jitters out, it’s time to dig in. Answering a few questions about your customers and inventory will help you out a lot when thinking about where to put those distribution warehouses.
Meet your customers where they’re at.
To start, where are your customers located? If most of your customers are in the Midwestern region of the United States, setting up a warehouse down in Atlanta, Georgia doesn’t make sense, no matter how good a deal you find on rent. Chicago, though? Well, that might be just the ticket.
In today’s hyper-connected day and age, it’s well worth giving careful consideration to the physical locations of your warehouses, regardless of where home base is.
Don’t let your current customer base be your only consideration, though. Think about the customers you want to reach as well. Finding a warehouse location can be a bit like playing a game of chess. That customer base you haven’t reached yet is the towering queen. The ultimate prize. Your task, then, is to set up the board so that you can capture that customer base. Sales and marketing outreach and a strong ecommerce presence are your knights and bishops, and your warehouse locations are the rooks. They move a bit slower, but when they’ve reached their target, they’re true powerhouses.
Sometimes practicalities get in the way of building your warehouse in a given city, but that’s OK — there are strategies out there for combating less-than-ideal warehouse locations. So do your market research, set some goals, get those knights and bishops in place, and make your move.
Equip yourself with a ready workforce.
Consider staffing next. Distribution centers typically need to hire a lot of people to keep them running. Look for warehouse space in a city with a sufficient workforce. If you spend too much time trying to hire enough workers, you’re losing money elsewhere, and your productivity will likely suffer.
Attracting and retaining a skilled workforce is an art unto itself. And it’s not likely to surprise anyone to hear that there’s a shortage of skilled labor out there. To learn what you as a distributor can do to combat this shortage, check out our guide.
Take the road more traveled.
Distribution warehouse logistics is one of the very few fields in which Robert Frost’s (apparent) advice can be safely ignored. When considering warehouse locations, look to existing transportation infrastructure. How many major interstates are within easy reach? How many airports or waterways? Are carrier services in close proximity?
When it comes to transporting your goods, don’t be a pioneer — look to those resources that are already in place. Be creative in your shipping strategies, yes, but don’t reinvent the wheel. Sometimes the best methods are the tried and true ones, and at the end of the day, your customers care about receiving their purchases on time. Don’t let them down.
Get really picky about your interior setup.
And we mean really, really picky.
Your warehouse location is very important, but the interior setup is just as, if not more, critical to success. When your warehouse is optimized, your company’s overall performance will improve. Increased warehouse productivity means you can handle a higher volume of sales and you have room to grow — both excellent earmarks of a healthy, thriving company.
A big part of warehouse optimization is the physical layout of your warehouse. Ergonomics aside, inventory organization has a bigger effect on worker efficiency than you might think. Depending on the nature of your inventory and how that inventory is sold, you might need to reevaluate your current organization strategy.
Are certain inventory items usually purchased together? Should you group items by vendor or by how well they perform? Which picking method should you use? The answers to these questions all hinge on your inventory organization strategy.
We’ve created an ebook dedicated to exploring inventory organization strategies and highlighting how some of our customers utilize them in their own warehouses. If you’re curious about how your current method stacks up, or if you want to learn more, download the guide, pour yourself a cup of coffee, and settle in for some quality reading time.