E-commerce Growth Drives Demand for Distribution Centers
How many things have you bought online this year? If you’re anything like the average American consumer, probably more than you can count or even remember. The growth of online sales over the past decade has greatly increased the demand for distribution centers across the U.S. In 2015 alone, e-commerce sales hit $341.7 billion, a 15% growth from the previous year. It has become increasingly popular to shop online on your mobile devices. E-commerce is expected to continue to grow at similar rates in the future. Growth in ecommerce sales is requiring businesses to put more focus on fulfillment and distribution centers in order to fill all of the online orders coming in.
Growing Distribution Centers
The rapid growth of ecommerce is creating widespread changes to warehouse and fulfillment operations. Has your company’s increase in online sales pushed you out of a facility that was just too small? The demand for large distribution and fulfillment centers in the U.S. is currently exceeding the supply of space available across the U.S. and is driving up the price of warehouses as a result. Businesses are forced to spend more in order to be able to deliver goods to their consumers faster. Take the largest online retailer in the U.S. for instance—Amazon.com (who offers same-day shipping in 13 cities) has over 100 warehouses in the U.S. alone—some reaching up to 1 million square feet. Many businesses have been multiplying the amount of warehouse space they have to accommodate growth of their online sales in recent years. The U.S. added roughly 180 million square feet of warehouse in 2015 alone.
More Regionalized Fulfillment Centers
Not only are businesses buying bigger warehouse spaces to accommodate ecommerce sales increases, they are purchasing smaller localized fulfillment and distribution centers for quick delivery. Large and centralized distribution centers are becoming less common as businesses compete to have the fastest and most convenient shipping capabilities for online consumers. If your shipping time is holding you back from having a competitive advantage, investing in regional distribution centers may be something to consider—depending on the size of your business and amount of inventory that flows in and out of your facility.
Increasing Efficiency in Distribution Centers
In order to remain competitive, warehouses facilities are also constantly working to improve their speed and efficiency of fulfilling internet orders. Distribution centers are restructuring their entire processes. They are changing operational priorities and increasing the use of technology in their warehouse to make fulfillment processes faster.
Overall, the increase in ecommerce in the U.S. is greatly changing how the supply chain handles distribution and fulfillment. Keeping up with online sales is a newer practice that businesses need to consider as ecommerce continues to grow in the coming years.
How QMH Can Help You with Your Growth
If you are purchasing a new distribution center or looking to improve your current facilities, QMH is here to help. We can help accommodate the growth of your business by building and installing custom storage systems that will maximize your warehouse space and efficiency. From concrete and fire protection system inspections, to racking installations and custom dock equipment, we can help you improve the way your distribution facility functions.