Choosing the Best 3PL Fulfillment Center Locations - 5 Factors to Consider

You might think that the most important part of your e-commerce business is conducted online. You place your products in an online store, and your customers buy stuff in cyberspace.

However, when it comes to fulfilling orders and purchases, actual locations do matter! Many e-commerce businesses choose to outsource their logistics to 3PLs that operate multiple fulfillment centers.

The location of the 3PL fulfillment center plays a pivotal role in the success of your operations. So, how can you choose a 3PL fulfillment center that optimizes your operations and fulfills your needs? 

In this blog, you’ll be introduced to several important factors that you should consider when choosing a 3PL fulfillment center. With these factors in mind, you can optimize order fulfillment, reduce shipping costs, and ensure customer satisfaction. 

So, let’s get into it!

Why is the Location Significant?

The significance of the location in your fulfillment center strategy cannot be overstated. Here is how the location can influence the success of your overall operations.

A Good Location Ensures Fast Delivery

Rapid and timely delivery is central to achieving customer satisfaction. Most buyers expect 2-day delivery - anything more than that can be too much.

The proximity of your fulfillment center to major customer hubs directly impacts the speed at which orders can be processed, picked, packed, and shipped. The shorter the distance goods need to travel, the faster customers receive their orders, ensuring customer satisfaction.

A Good Location Helps You Manage Shipping Costs

The strategic location of fulfillment centers plays a pivotal role in managing shipping costs. 

By hiring fulfillment centers close to customer concentrations and highways, businesses can avoid expensive cross-country deliveries. This, in turn, helps in maintaining competitive shipping rates and maximizing profit margins. 

A Good Location Enables Business Expansion 

As your e-commerce business grows, expansion becomes a strategic imperative. 

Adding additional fulfillment centers to your network may be necessary to meet increasing demand. The location of these fulfillment centers is crucial to maintaining the quality of customer experience and operational efficiency.

Choosing strategic locations from the outset ensures a smoother transition into future expansion phases.

5 Factors to Consider When Selecting a 3PL Fulfillment Center

Now that you know the importance and benefits of having your fulfillment center at a good location, the question remains: 

How do we determine a good location when choosing a fulfillment center?

Here are the main considerations that will help you select a fulfillment center at the most suitable location.

Determine Where Your Customers Are Located

The first and most important factor to consider the best location is where most of your customers are situated. 

This is because shipping carriers use shipping zones to calculate rates for services. Shipping zones are the geographical areas that carriers ship to, which measure the distance a package travels from the point of origin to the destination. The less distance a package travels, the quicker it gets delivered to your customer and the less money you have to pay for shipping.

Therefore, you want to choose a fulfillment center location that is close to a large portion of your customers. If you have a global customer base, you should go for international 3PLs that have fulfillment centers in several countries. 

This way, you can reduce the shipping costs and also offer faster and more reliable delivery to your customers. 

Consider Possible Delivery Times

The delivery time is the time it takes for your products to reach your customers from the fulfillment center. 

Most customers expect quick and seamless delivery. Hence, customer satisfaction is intricately linked to the delivery time you’re offering. And the one major factor affecting the delivery time is the location of your fulfillment center.

You want to choose a fulfillment center location that can offer the best possible delivery times for your customers based on their expectations and preferences. Use customer feedback or industry standards to find out what delivery times are

acceptable, and choose a fulfillment center accordingly.

Decide Whether to Offer Free Delivery

Free delivery is a powerful incentive that can attract and retain customers, as well as increase your sales and profits. However, free delivery also comes with a cost that you have to bear or pass on to your customers. 

If you’re offering free delivery, you want to choose a fulfillment center location that can help you achieve it without hurting your margins or compromising your quality. You can use your pricing strategy, profit margin, or customer lifetime value to decide whether and how to offer free delivery to your customers.

For example, suppose you are offering free delivery to all your customers, regardless of the destination. In that case, you need a warehouse management center and fulfillment center location that can minimize your shipping costs. It could be a location that is close to your customers, or that has access to multiple shipping options. 

Consider Whether You Need a Single or Multiple Locations

Another factor to consider when choosing your 3PL fulfillment center location is whether you need a single location or multiple locations. 

This depends on the size and scope of your business. 

If you have a small or niche business, or if you sell products that are bulky, heavy, or fragile, you may be better off with a single location that can handle your inventory and orders efficiently and effectively. This way, you can simplify your logistics and also save on operational costs for multiple locations.

However, if you have a large or diverse business, or if you sell products that are lightweight, compact, or durable, you may benefit from having multiple locations that can cover different regions and markets. This way, you can offer last-minute fulfillment with 3PL and cheaper shipping, as well as more options and flexibility, to your customers.

Decide Whether to Offer Any Value-Added Services

Value-added services are any additional services that you offer to your customers to enhance their experience and satisfaction. This may include things such as gift wrapping, custom packaging, personalization, or branding.

Value-added services can help you differentiate your business from your competitors and increase your customer loyalty and retention. However, value-added services also require more time, resources, and skills to execute and may not be available at every location. 

If you’re offering value-added services, partner with a 3PL provider that can offer them at their locations. The fulfillment center should have the necessary technology and staff to perform those services.

Common Questions About Choosing Fulfillment Center Location

Choosing the best location of a fulfillment center for 3PL is not an easy task. There are many factors and trade-offs to consider, and there is no one-size-fits-all answer. Here are answers to some of the most common questions to help you make the best decision for your e-commerce business.

Do I need to be close to my fulfillment center?

No, you do not need to be close to your fulfillment center. The location of your fulfillment center should be based on where your customers are, not where you are. The closer your fulfillment center is to your customers, the faster and cheaper you can ship your products to them, and the more satisfied they will be with your service.

However, being close to your fulfillment center may have some advantages, such as:

• Easier communication and coordination with your 3PL provider
  
• More convenience and flexibility for visiting or inspecting your fulfillment center
  
• More familiarity and trust with the local market and regulations

Still, these advantages do not outweigh the benefits of ensuring customer satisfaction. So you may choose a location close to you depending on your business goals, but it is not necessary to ensure business success. 

How do I know if I need one or multiple fulfillment center locations?

You may need one fulfillment center location if:

• You have a small or niche business that serves a specific or limited market
  
• You sell products that are bulky, heavy, or fragile and require special handling or packaging
  
• You have a simple or stable inventory and order volume that can be managed by one location
  
• You have a low or fixed budget that cannot afford the overhead and operational costs of multiple locations

On the other hand, you may need multiple fulfillment center locations in case:

• You have a large or diverse business that serves a wide or global market. 
  
• You sell products that are lightweight, compact, or durable and can be easily shipped or stored
  
• You have a complex or variable inventory and order volume that requires more flexibility and scalability
  
• You have a high or flexible budget that can invest in the benefits and opportunities of multiple locations
  

Should my 3PL fulfillment center be located in a central location?

Having a central location can be beneficial in some cases, especially as it can reach most of the customers within that area within a few days. However, it is not good in all cases.

A central location can be a good choice for your 3PL fulfillment center if:

• You have a large or diverse customer base that is spread across a wide or multiple areas
  
• You want to offer fast and cheap shipping to most of your customers.
  
• You want to simplify your logistics and inventory management and reduce the number of locations you need to manage

In contrast, a central location may not be the best choice for your 3PL fulfillment center if:

• You have a small or niche customer base that is concentrated in a specific or limited area
  
• You want to offer faster and cheaper shipping to some of your customers or more options and flexibility for different shipping methods or zones
  
• You want to leverage the advantages and opportunities of multiple locations

To sum up, choosing the best location of a fulfillment center for 3PL is a key decision that can affect your e-commerce business in many ways. The fulfillment center location can influence your shipping costs, delivery times, customer satisfaction, and scalability. 

This guide introduced you to the factors that you should consider when choosing a 3PL fulfillment center. By considering the factors discussed above, you can make the best choice for your business and your customers.

Partner with 3PL Fulfillment and Prep - Your Reliable 3PL Provider

Stressing about the best locations for your 3PL fulfillment center can only take you so far. If you are ready to take your e-commerce fulfillment to the next level, you need a reliable and professional partner that can handle your order fulfillment needs. 

So say goodbye to worrying about the best locations and other logistics matters - Leave it to the professionals at 3PL Fulfillment and Prep!

We have multiple fulfillment center locations across the US, where you can store and ship your products to your customers in the shortest time and at the lowest cost. We also offer:

• State-of-the-art and scalable facilities and equipment
  
• Advanced and integrated technology and capabilities
  
• Competitive and transparent pricing and terms
  
• Responsive and supportive customer service and communication

Don't let order fulfillment hold you back from growing your e-commerce business. Let 3PL Fulfillment and Prep take care of your order fulfillment. 

Request a quote today!