If your company ships products nationally, you know the fulfillment environment has never been more demanding. Customers’ expectations for rapid delivery have risen to never-before-seen levels, and their impatience and frustration when you fall short of those expectations can send them looking at your competitors with fresh eyes. Those expectations heighten the need to have national fulfillment services that are both fast and efficient.
For many shippers, national fulfillment services no longer simply means providing delivery of orders throughout the country. It now means fulfilling orders at the same reliable speed no matter where in the US a customer is located. Figuring out how to provide that level of service means examining your processes and resources closely and considering opportunities to up your fulfillment game.
Here are key questions to ask when determining the distribution infrastructure required to provide national fulfillment services.
The Need For Speed
The first question to consider is how important fulfillment delivery speed is to your brand’s online sales. Amazon has created a new normal of two-day, one-day and even same-day delivery. If buyers can get your product easily from other brands, then you need to at least meet their delivery time standards. That may require more than one warehouse across the country. If your brand is unique or carries some cachet with buyers, then delivery speed may be less of an imperative since they can’t get that anywhere else.
More Than One Fulfillment Center
A recent ice storm in Dallas made it dangerous for many workers to come into the warehouse there. It so happened that, on this day, two large customers had significant, planned volume spikes. Having additional fulfillment centers to divert orders to may be the difference between you and your competition.
That’s just one example. Different weather events, fire, a COVID outbreak or other disruptions can bring fulfillment operations to a complete halt if you rely on one warehouse for nationwide fulfillment. Only you know the short-term and long-term implications for your business if you were unable to fulfill orders for a day or even a week.
When To Expand
When you expand to more than one fulfillment center, it adds complexity. For brands that are still gaining traction in the market, expanding too soon may not be wise. You need to learn some things about your business so that you begin to see patterns in your customers’ demand.
Which regions of the country generate which kinds of orders?
Which SKUs move the fastest?
How do order volumes rise and fall throughout the year?
Once you have this solid foundation and your current operation starts straining at the seams, that’s a good time to consider geographic expansion.
What Can You Afford?
In theory, national fulfillment services are possible with a single facility. But unless you want to spend a fortune for expedited delivery, the customers who live farthest from that facility will wait longer to receive their goods. And that might be OK. But with one fulfillment center, you’ll be paying a lot more for parcel shipping.
Parcel shipping is by far your biggest fulfillment expense. The cost of adding warehouses to your distribution network will increase for the facility, labor, inbound shipping and inventory. But those costs are typically outweighed by the parcel shipping cost reductions associated with putting products closer to customers. With parcels, it’s those high-zone moves that really take a bite out of your wallet.
You’ll still see some eCommerce sellers trying to succeed at national fulfillment with a single-warehouse model. This practice still happens because several years ago, using a single, centralized warehouse was common for many retailers, especially those managing less than 100,000 orders annually. And many of those retailers haven’t evolved with current market conditions. Back then, consumers expected to wait a few extra days for goods they purchased online to arrive from a far-off fulfillment house.
Then, Amazon started to change all that with its two-day shipping model. After that, big omnichannel giants like Walmart and Target changed to keep up with Amazon. Eventually, skyrocketing eCommerce demand during the COVID-19 pandemic put that outdated fulfillment network model to rest. Put simply, nobody wants to wait five days for toilet paper anymore (or hardly anything else they buy online, for that matter).
National eCommerce fulfillment is no longer just about shipping to every state. Instead, it’s about getting your products to every national destination intact and on time, within the same predictable shipping window. Your customers in Florida want their goods just as fast as those in Northern California, and providing that capability has become essential to the overall customer experience. If your national fulfillment services fail to meet and exceed those consumer expectations, you’ll eventually get pushed out of key markets by competitors who didn’t make the same mistakes.
Third Party Logistics Companies – 3PL
The added costs and complications of a multi-warehouse, eCommerce fulfillment networks are less of a burden if you work within a national fulfillment 3PL. A national 3PL could:
Do an distribution network analysis analysis to help you decide the optimal number of warehouses you should have and where they should be
Provide immediate distribution in new regions of the country using an in-place network of fulfillment centers
Reduce your warehouse costs by allowing you to share overhead costs with other companies at a multi-client facility
Reduce your parcel costs by shipping under their discounted parcel shipping rates
Provide the ability to scale your fulfillment operations to support any rate of growth, including the addition of new facilities and the introduction of automation to efficiently manage high-volume fulfillment.
Create customized national fulfillment services that meet your exact needs, allowing the fulfillment partner to act as an extension of your core operation.
Accommodate multiple distribution needs, such as offering eCommerce fulfillment, distribution to your retail partners, marketing material distribution, and more from the same facilities.
Best of all, 3PLs that offer national fulfillment services give you the freedom to focus on growing your business while they serve as your growth guide, providing the fulfillment advice and infrastructure you need.
Contact ShipJoy Today
If you need help with your order fulfillment, don’t hesitate to contact us at ShipJoy. We have the experience, dedication, and knowledge you need to ensure your packages get where they need to go and your customers return time and again.