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There was a time, in the early days of ecommerce, where a business could get away with one or two distribution centers.

Even as recently as the previous decade, brick-and-mortar shopping prevailed and online shopping wasn’t expected to be so, well, immediate. But as times change and new customer demands begin to take precedence, the act of warehousing and shipping inventory has needed to keep up – and one of the biggest changes has been in the shape of our distribution networks.

 

Distribution networks are the interconnected systems of warehouses and supply chains that get products from point A to point B. In the old days, they used to be simple enough affairs – depending on the size of the company, you’d have one or two primary distribution centers that would serve the entire country while your customers patiently awaited their packages.

Then, of course, came the rise in two-day delivery.

 

A variety of industry factors have led to the need for retailers and distributors to fulfill orders faster than ever, and your ability to keep up with this demand largely depends on the size and layout of your distribution network. But how can you tell if your network is up to the task?

 

The first thing you need to consider is the location of your customers. Do a little soul-searching on your own behalf, and ask yourself where exactly your customers come from. Are you serving customers from across the country, or are you only shipping to a specific geographic location on behalf of another company or retailer? Smaller, more ‘hyperlocal’ networks are less complex than national ones by design, and this can have an impact on exactly what size your network needs to be.

 

From there, you need to consider how your inventory is stored. Part of the temptation to expand your distribution network tends to stem from what may be perceived as a shortage of space, or a lack of room for new items. After understanding your current geographic needs, take a look around your warehouse – could you bring in some new wire shelves, pallet racks, or industrial shelving units to help store more items in your current warehouse? Or could you even rearrange the storage you have now to make your current warehouse work more efficiently?

 

However, many distribution centers will encounter problems above and beyond the actual inventory, and part of your distribution network size needs will be determined by whether or not you’re ready for emergencies. Particularly these days, in a post-COVID landscape, your warehouse (or warehouses) could be deeply impacted by product shortages, health-related closures, and/or a shortage of staff to handle incoming products. Larger distribution networks, by their nature, would be better equipped to handle these problems by providing overflow storage, or potentially operating in an area less impacted by illness or natural disasters, allowing you to provide uninterrupted (if not slightly delayed) service to your customers. If your current warehouse has been plagued by these problems, or if you find yourself unable to keep up with customer demand as a result, a larger distribution network may be the key.

 

Ask yourself these questions, and your answers will help you figure out what size your distribution network is – and, perhaps, what size it should be.

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