Small-to-medium-sized businesses need to have a distribution center that’s located in a place that makes sense for their given circumstances. It also needs to be sized correctly and designed to help their specific operations. If you haven’t given much thought to this important aspect of running a business, then you’ll want to check out these four areas that a distribution center can really impact. By researching different areas of a business affected by a distribution center, you’ll be more inclined to spend time and resources finding a distribution center that fits your growing company’s needs.
1. Shipping Speed
Look through any third-party logistics directory, and you’re likely to see countless effective business operations that offer short shipping times to their customers. The way they’re able to do this is by ensuring that they have multiple distribution centers located in several different areas to allow them to send packages out quickly to large numbers of people. Companies that sell directly to consumers will especially appreciate fast shipping times, since individuals usually don’t want to have to wait for a long period of time before they receive their orders. That being said, companies that primarily focus on B2B sales will still want to clock how long it takes packages to get to where they’re going before they decide that their shipping centers don’t need any more work.
2. Customer Loyalty
Even the most loyal customers will eventually start to question how well your organization is run if their orders get lost. Putting up a solid distribution center in an area that’s more or less close to the individuals you’re selling to will go a long way toward improving customer experience. Once people see that they can get goods or services from your organization in a relatively painless fashion, they’ll be much more likely to do business with you in the future. Newer businesses that don’t have a strong foothold in their respective industries will want to spend some extra time deciding where to put their distribution center for this reason.
3. The Bottom Line
Warehouse operations only offer limited handling services, which means that managers have to invest in their distribution facilities. While it’s true that streamlining these operations can have a positive impact on a company’s bottom line, they impact profit margins in an even more important way. Distribution centers can reduce shipping costs if they’re located somewhere that makes good geographical sense for a business. Companies that deal with regular rate increases may want to expand their facilities to make up for them.
4. Regulatory Environment
Depending on where your physical plant is located, you might be looking at an entirely different set of regulations. Putting your distribution centers in areas where you have a full understanding of the laws is important, since this helps to ensure that you won’t fall afoul of them in the future. Good distribution centers can even potentially help to reduce your tax burden, depending on how you manage them, so they’re an important feature of almost any kind of business operation.
