Salt Lake City (SLC) may not be the most glamorous cities in the US, but for an ecommerce fulfillment center, it is possibly one of the best locations to place a warehouse. Have you ever heard of Salt Lake City referred to as “The cross roads of the West”? Don’t believe me? Just Google it, The Cross Roads of the West. While having the nickname of “the cross roads of the west” sounds great, is it really a great place to have an ecommerce fulfillment center?
Americas Top Location to do Business:
For many years, Utah has consistently ranked as one the top states to do business. In 2014, CNBC ranked Utah as the 3rd best state in America to do business. The pro-business philosophy that the entire state of Utah has means lower taxes and labor costs, which translates to a more efficient place to conduct business. When ecommerce fulfillment providers assemble their distribution pricing, labor is the biggest cost driver. Lower labor rates translates to lower pick and pack costs to ecommerce companies.
Great Shipping Location:
Like real estate, distribution center placement is all about location, location, location. The single biggest cost driver of the ecommerce supply chain is the outbound shipping costs. Shipping single packages to single locations across the US is not cheap, but a strategically placed fulfillment center will lessen the cost. In addition to lessening the cost, location will help improve transits across the customer base. Quicker transits mean happy customers and happy customers mean more sales. For those ecommerce shippers in the consumable market, faster delivery also means a quicker re-order. Won’t your CFO like to hear that as he preaches the order-to-cash cycle.
With all that in mind, the number one factor in strategically locating your ecommerce fulfillment center is to know the population distribution of your customer base and to a lesser degree understand where your suppliers are located. So, if your customer base is positioned more in the West, then Salt Lake City is your place. SLC hits over 90% of the population west of the Rockies in 2 day ground. Salt Lake City also reaches much of the Midwest in 3 day ground. This is a tremendous benefit for ecommerce companies whose customers demand faster delivery times and cheaper shipping options.
When it comes to outsourcing your ecommerce fulfillment, finding the optimal location to ship your product from is key, while also ensuring that your fulfillment provider has the capability to handle your needs. Ecommerce companies with a heavy West Coast customer base should seriously consider Salt Lake City for lower cost and faster deliveries. For larger ecommerce shippers, SLC is also a great second location in a two distribution model.