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Is a Last-Mile Distribution Center Right for my Business?

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A last-mile distribution center can save you shipping costs, improve order fulfillment and transit time, and help your distributors balance inventory.

It’s a common misconception: A last-mile distribution centers is only for the biggest of retailers like Amazon, Walmart, and Home Depot. This simply isn’t the case. If your business does significant amounts of e-commerce, a distribution/sales center where customers can pick-up products could be the right move.

Where are you shipping products?

It’s a simple but important question that can help determine if a last-mile distribution center can help your business. If you are doing a large amount of business in a centralized location, a pick-up center could help save you time and money normally devoted to shipping costs.

Last-mile customer service can make or break your business. But with a last-mile distribution center, your business can circumvent many of the headaches — not to mention costs — that go along with the final portion of delivery. Give customers an in-store pick-up option, and your business will have a leg up on the competition by providing the omnichannel shopping experience that today’s consumers desire.

Fulfillment and transit time matter

AI and drones may not solve your fulfillment and last-mile challenges (yet). So it’s important to recognize the time it takes your business to fulfill an order and for that order to get to a customer’s doorstep.

There are numerous challenges between these two stages of your customers’ purchase journey. One that’s often overlooked is how traffic can impact your delivery times.

Many cities’ infrastructures are not designed to handle the increasing volume of delivery traffic caused by the rise in online shopping. In 2016, the United States Post Office delivered 5.1 billion packages nationwide. That’s just the post office alone, not taking into consideration other parcel-delivery services, such as Fed-Ex or UPS. The problem is proliferated in the already strained roadways of urban areas, making the last-mile challenge a nightmare in our nation’s largest cities.

Last-mile distribution centers can help mitigate this growing issue by giving shoppers the opportunity to “click and collect.” When customers shop online and pick up items at a physical location, it reduces the need for delivery vehicles on the road. What’s more, shoppers don’t have to wait several days for their orders to be delivered, and businesses save money on last-mile logistics and delivery.

Balance inventory

For e-commerce businesses with independent distributors, last-mile distribution centers are vital to inventory access. Distributors don’t want to keep a lot of product on hand. But when a product is selling fast, they need to be able to stock up quickly to fill customer orders.

Last-mile distribution centers help these independent distributors balance inventory. They make products more accessible by eliminating the need to wait for in-home delivery. That means the distributors don’t have to stockpile products to meet customer orders in a timely manner.

Last-mile distribution centers address several pain points plaguing e-commerce businesses. In addition to circumventing last-mile challenges and costs, they can improve order fulfillment and transit time and help independent distributors balance inventory. Any e-commerce business that does a large volume of business in a particular area should look further into this solution.

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Topics: e-commerce distribution strategy last-mile distribution center last-mile challenges