Distribution Centers

Written by Linda Alexander
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Distribution centers are facilities which companies use to make possible the flow of raw materials and merchandise. Centers can be sections of a public warehouse or large facilities operated by contracted logistics providers. Distribution centers offer many different services, from shipping and receiving to custom packaging.

Outbound distribution centers deal with finished goods. They are important in many industries, from specialty products to mass marketed goods. Getting products into the hands of customers is a central function of business, so choosing a distribution center is a significant decision.

Choosing Distribution Centers

When choosing a center, there are two choices: purchasing or leasing a center and operating it internally, or using a center owned by an outside provider who operates it. Either way, defining your delivery terms is key. Whether you do it in-house or contract with a distribution center, clearly define what you want in terms of services for your customers. They are the ones who will determine whether the setup is working or not.

You will also need to determine the size of distribution network you need or want. For example, if you only have one distribution point, it is a good idea to keep it in a major population center. If you will have several, you can have them in locations spread out across the country. Deciding how many centers to use will also determine the size of each one. When it comes to timely delivery, the location of your distribution points can make all the difference.

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