Inventory distribution helps lower time in transit, improve delivery experience, and lower your cost to serve. Learn how to get inventory in the right place at the right time to meet your customers’ expectations and improve your bottom line.
Inventory distribution helps lower time in transit, improve delivery experience, and lower your cost to serve. Learn how to get inventory in the right place at the right time to meet your customers’ expectations and improve your bottom line.
Inventory distribution is a fulfillment method that merchants and retailers use to lower time in transit (TNT) on final mile deliveries. Rather than storing and fulfilling all inventory from a single warehouse or fulfillment center, merchants dilute their inventory across a network of warehouses across the country. Orders are routed to the closest warehouse, ensuring the fastest delivery time at the lowest possible shipping rate.
Inventory distribution can give merchants of all sizes competitive advantages that improves customer satisfaction and drives up top-line revenue. These advantages include:
Inventory distribution may seem unattainable for small to mid-sized businesses (SMBs). Their primary challenges are:
Simply put, many SMBs do not have the capital to invest in the additional inventory required to stock multiple warehouses or may not have a high enough average daily volume (ADV) to negotiate with multiple warehouses or 3PLs.
However, inventory distribution is attainable for businesses of any size through a partnership with a co-warehousing or on demand warehousing solution. An on demand warehousing model allows merchants to share space and labor within a large 3PL network. When multiple merchants’ inventory and shipping volume is aggregated together, it becomes a much more attractive partnership for top-tier 3PLs, enabling smaller merchants to distribute smaller volumes of inventory across a warehouse network.
According to McKinsey, retailers that pivoted to a distributed inventory model for ecommerce fulfillment saw the greatest success during the pandemic. McKinsey concluded that the key to successful inventory distribution is having the right products in the right place at the right time.
Knowing which SKUs are popular in which markets, how fast those SKUs will move, and which SKUs are commonly purchased together creates two margin-protecting outcomes:
McKinsey concludes that the right inventory in the right place at the right time requires three primary business functions:
Ware2Go is a UPS company that makes inventory distribution achievable for merchants of all sizes to enable 1- to 2-day ground shipping across the US. A diverse network of warehouses, supported by best-in-class fulfillment technology and an integrated freight solution make Ware2Go a true end-to-end supply chain solution.
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