These days, thanks to the ecommerce explosion, a lot of retailers and warehouses are looking into a second location to try and keep up.

For some businesses, it makes a lot of sense. A second warehouse allows you to fulfill more orders, stock more product, and get things shipped more efficiently, at least in theory. There’s a lot of thought and planning that needs to go into getting a second warehouse, and even after you’ve judged the potential economic impact of this decision, you still have to figure out where it’s going to be.

The location of your second warehouse is never quite as simple as “finding some open industrial space near your current location”, and should ideally take as much forethought and planning as the decision to open one in the first place.

How to Figure Out Where Your Second Warehouse Should Go

When opening a second location, there’s a few important questions you should ask yourself.

Where are my customers located?

Since the goal of your second location is, above everything else, an effort to serve your customers more effectively, you should start by considering their needs above all else.

Do you serve customers in a limited geographic area, or all over the country? Are you only open to customers in your home state, or do you serve the whole Midwest, East Coast, etc? Review both your current supply chains, your typical order radius, and your ability to get new products to see how far out you should put your new warehouse. Maybe it’ll be down the street, maybe it’ll be one town over, maybe it’ll even be a state or two away if you have a customer base out there – but you’ll never know until you look.

Where do I get my products from?

Unless you’re a warehouse that creates, assembles, and distributes your own products in-house – a relative rarity, these days – the odds are that your products are coming from somewhere else. And whether you distribute your goods to a retail location, or sell directly to customers through an online storefront, knowing where these products come from will have an impact on your new warehouse location.

Talk to your suppliers and see where your goods originate from. If you deal in a lot of overseas shipments, will a second location increase the handling time for them to arrive safely? Or will a location nearer to one of your suppliers allow you to get items back in stock more easily than you can at your current location? Find the answers to these before you pick a new location and it might just improve your overall handling times.

Can I transport goods and equipment between my two warehouses?

No matter where your warehouses are located, they’re not going to be much help if you can’t outfit them properly. If your current location has excess warehouse shelving, wire shelving, or steel shelving, can you easily start setting them up at your new location, or will it require extra handling time? Do you know how fast your new warehouse can get up with pallet racking? If your main warehouse runs low on a popular item, would you be able to fulfill the orders from the other location, or even transport that item to your new warehouse? Making sure they cooperate will be a big step in keeping both of your locations productive and successful.

Where does my supply chain stem from?

Similarly, knowing how your logistics process works will impact your potential locations as well. Talk to your current service providers and see if they have restrictions on the geographical area they can serve. A lot of logistics companies have limits on how far they can go, or how many packages they can take over a certain distance, and learning where these limits are could impact your choice in warehouse location – or your need to find new logistics providers.

Obviously, there’s going to be a lot more to it than this, but if you’re able to answer these questions, your choice in a new location might be that much easier.