5 Questions to Ask When Choosing a New Distribution Center

 

The success and profit of your business can depend on the distribution center you select for it. It impacts revenue, customer satisfaction, employee efficiency, and a number of other key business components. Ask these five questions when choosing a new distribution center for your company.

1. Does It Have a Strategic Location?

 

When you need a new distribution center for your business, consider the locations of the ones you are considering. Are they located strategically for your company’s operations? Are they close enough to serve your customers and ensure you can meet your shipping deadlines?

 

Are they conveniently located so your fleet drivers can get to and from them easily? A strategic location for your distribution center can lower your company’s costs and improve its efficiency.

 

2. What Are Its Operational Capabilities?

 

You also need to question the operational capabilities of the distribution centers under consideration. For example, can they handle the volume of your business’s inventory?

 

Do they have staff who can handle the types of goods you plan on shipping in and out of them? You should find out if any distribution center you consider has specialized storage needs, such as temperature-controlled areas for products you need to keep hot or cold.

 

3. Can the Distribution Center Adapt for Future Growth?

 

Just as your business evolves, so might its need for a reliable distribution center. The one you choose should have the capacity to adapt for your business’s future growth.

 

It needs to offer the scalability to adapt to your business’s inventory volume, for example. It may also need to expand its reach to new markets, particularly if your business goes global and you begin serving people in different countries. A distribution center that can only ship products locally or to nearby states will not serve your business well.

 

4. What Kinds of Technology and Systems Does It Have?

 

When you look for a reliable distribution center for your company, you should ask what kinds of technology it has and what systems it uses. This technology should include machinery and systems for inventory management, for example. It can also include automation to speed up receiving and shipping out products.

 

Likewise, you can ensure your business’s success by choosing a distribution center that uses real-time tracking. This technology minimizes lost orders and can save you money on returns and refunds. You can find distribution centers that offer this level of technology and convenience by using a business resource.

 

5. What Are the Total Costs?

 

Finally, you need to keep your business’s proverbial bottom line in mind when selecting a distribution center. What good is it to choose one that drains your cash flow?

 

Some of the costs you need to find out about during the selection process include rental fees, labor costs, utilities, and taxes.
 

You should also ask about any hidden fees included in your contract that can eventually impact your business’s profits.

 

These five questions are some to ask when you choose a distribution center for your business. They can guide you to one that offers you the technology and growth potential that can maximize your profits and keep your costs low.