For many people, running an online store might look easy on paper. In the early days, you can run your inventory and packaging process from your spare bedroom. However, once orders start trickling in by the hundreds, managing these processes internally can become expensive and difficult to scale.
This is where a commerce distribution center can play an important role. But it all narrows down to finding a distribution center tailored to your business’s needs. Below are some of the most important factors to evaluate.
Location of the Commerce Distribution Center
Location is one of the most important considerations when evaluating a commerce distribution center. A center located near your suppliers can simplify inbound logistics. One near your largest customer base will reduce shipping distances and delivery times.
So, before you hunt for a 3PL firm that offers commerce distribution center services, consider the location of your suppliers and customers. But what if your business serves customers across multiple states? If that is the case, you may want to consider a 3PL company or logistics partner with multiple distribution facilities.
Storage Capacity
The ideal distribution center needs enough space for your inventory to avoid making future growth unnecessarily difficult.
During the evaluation process, ask potential providers or 3PL companies how much storage space is available. Also, don’t forget to ask about storage rates and flexibility, depending on your inventory and product catalog.
A provider with limited inventory space may become unsuitable if your product catalog or numbers increase within the next couple of months.
Order Fulfillment Capabilities
Order fulfillment is the cornerstone of running a successful online store. A facility may meet your storage needs, but if it cannot process and dispatch orders accurately and quickly, you will face significant problems moving forward.
Start by asking how quickly the distribution center processes orders after receiving them from your online store. This is particularly important if your online store advertises next-day or 24-hour shipping options.
While at it, ask about the firm’s workflow, from receiving orders to dispatch. This is important as it helps you identify whether the commerce distribution center can meet your customers’ demands.
E-Commerce Platform Integrations
Gone are the days when inventories were managed through static Excel sheets. Most modern commerce distribution centers and 3PL firms such as Packageman rely on high-tech management systems.
The system could include your e-commerce platform, marketplace accounts, inventory management system, and customer service tools. Smooth integration can reduce the need for manual data entry and eliminate human errors.
For example, when a customer places an order, the information can automatically be transferred to the commerce distribution center. Once the order is shipped, tracking information and inventory updates can be sent back to your store.
Pricing and Fees Charged by a Commerce Distribution Center
What you pay will vary based on several factors. As such, always insist on getting a full quote with a full breakdown of services and costs. This is the right approach because distribution center pricing can be more complicated than a simple monthly storage charge.
Provide the logistics firm with your average monthly order volume, number of products, average items per order, and inventory size. This can give you a more realistic understanding of what the service could cost. It will also help you evaluate pricing based on value for your money, rather than what is expensive vs. cheap.
