Multi warehouse shipping: 5 benefits from retailers who get it right

Your business is growing. You’ve got more retail stores, a bigger team, new products to sell and… just one warehouse?

Multi warehouse shipping is becoming an essential strategy for growing businesses looking to balance cost savings with speeding up delivery times to keep their customers happy. If eCommerce is a core part of your business, expanding to a network of warehouses means being closer to even more shoppers and reducing the distance their orders have to travel.

Here’s why we think strategic multi warehouse shipping can help your business, and what you can learn from companies that have already taken the leap.

1. Improved delivery times – This is the big one, especially if you’re doing a lot of eCommerce sales. As you grow and customers from further away are ordering your products, it’s important to still be able to ship quickly. Having warehouse space in multiple key locations is vital.
   
   
2. Cost savings – This goes hand-in-hand with your improved delivery times. The closer a warehouse is to a customer, the less they pay. If you’re using multiple carriers, this is a chance to use local options in a new location, instead of sending packages across cities, islands or whatever else stands between a customer and their order.
   
   
3. Customer satisfaction – Having more than one warehouse benefits customers in many ways. The main reason is faster shipping, which studies show is the second most important factor for customers shopping online, after free shipping. Followed closely by the opportunity of free shipping which, thanks to the savings you're making in shorter delivery timeframes, will make it easier for you to offer incentives like free shipping.
   
   Additionally, having multiple warehouses reduces costs for your customers, as it means returns can be sent back to a nearby location, making the process faster and cheaper for them.
   
   
4. Increased operational efficiency – Tracking stock levels, transfers, and understanding which regions need certain products can keep your retail business running smoothly and help you to anticipate future demand.
   
   
5. Scalability – There's no doubt that growing a business is hard. When do you open a new retail store? Can you support more staff? Multi warehouse shipping means you can increase and decrease warehouse capacity and locations as needed, especially if you’re using a third or fourth-party provider to meet your needs. Looking at your data to see where most of your orders are coming from is a great place to start, as it will give you a better idea of where to add your next warehouse.

Challenge: Managing stock levels across multiple locations

Retailers that try and take on this challenge without an effective warehouse management strategy are likely to struggle. According to an article from BigCommerce Essentials, warehouses that aren’t running efficiently and communicating effectively, usually pass those issues on to the consumer.

Solution: Use a Warehouse Management System

To maximise the benefits of multi warehouse shipping, you need a Warehouse Management System (WMS) that can accurately manage stock across multiple locations. Not only does this help with tracking stock levels and which specific products are most popular, it means that when a shopper picks next-day shipping you can deliver on that promise.

Challenge: Increased stock holding costs

Yes, at the end of the day an effective multi warehouse strategy can help you save on shipping costs. However, some costs are moved to other areas of your business. If one product is popular in multiple cities, for example, you now need to maintain stock levels in all of the necessary warehouses. Integrated Warehouse Management software provider, Lace Up, notes that holding higher stock levels for longer can also increase insurance costs, and is a risk when products are on their way to obsolescence.

Solution: Forecast demand and optimise inventory management

Being able to accurately forecast demand from your customers, and increasing or decreasing your supply to match can really help here. The better you can manage your inventory and stay aware of changing trends, the less time you’re spending dealing with stock that just won’t move. It’s a situation that increases in complexity as you spread a range of products over a growing number of warehouses, but there are still benefits to be had.

Case Studies – success stories of multi warehouse shipping

If you’re starting to feel overwhelmed, don’t worry. Other companies have integrated multi warehouse shipping into their operations and succeeded, and as a bonus some even shared their success stories.

Note: Cabela’s is not a Starshipit customer, but they’re a useful example for anyone looking to implement a multi warehouse strategy.

Solution – Lorna Jane turned to the power of Starshipit, alongside other integrated systems, like PeopleVox Warehouse Management, to streamline their multi-warehouse shipping process. By setting up child accounts for each warehouse under their main Starshipit account, Lorna Jane could automatically assign orders to the nearest warehouse based on the destination, optimising shipping routes and reducing delivery times.

Outcome – This strategic approach allowed Lorna Jane to offer faster, more affordable shipping options to their loyal customers, enhancing customer satisfaction. The use of local couriers for each region further reduced shipping costs and improved operational efficiency, allowing Lorna Jane to keep pace with their international expansion and maintain their reputation for high-quality, fast-delivered activewear.

Who was suffering in all this? The loyal customer. As we mentioned earlier, a multi warehouse management system is key to managing this complexity, which is why Cabela’s looked for a solution that could get the right stock to the right places and people.

And that solution? Cabela's discovered Distributed Order Management (DOM) System: that came pre-equipped with the essential integrations for the tech tools they were already using. By seamlessly linking crucial platforms — such as their inventory and warehouse management systems — Cabela’s gained a view of orders and inventories across all channels worldwide. This seamless integration enabled streamlined coordination of fulfillment operations across various locations, including stores, warehouses, suppliers, and partners.

Key Takeaways

The case studies reinforce some of the points we made earlier, and can point you in the right direction as you begin to create a multi warehouse shipping strategy. We recommend you:

• Know why you’re doing this: Cabela’s had a key, measurable goal in place before they started looking for a solution.
• Have an action plan: Even if you've existed for decades, your multi warehouse expansion should be informed by a robust strategy.
• Be prepared to evolve: The last step of the plan? Evolve. This won’t be a one and done process, so you’ll need to be prepared to revise and refine as you go.
• Ask for help: In both examples, these companies reached out to experts to guide them through the process. For Cabela’s in particular, they knew an updated software platform was key to meeting their shipping goals.

Wrap up

An effective multi warehouse strategy can help your business stay efficient as it grows. Sure, there are challenges – but by learning from other retailers and keeping up with current trends, you can also see operational benefits like cost savings and scalability.

The reality is that the current online shopping and shipping landscape is extremely competitive. If embracing multi warehouse shipping can get your products closer to your customers before they’ve even shipped, it can give you a huge edge over your competition.