BusinessHABWalmart distribution centres: If you’ve ever shopped at Walmart, there’s a good chance that you did so because of their low prices and excellent deals. In order to keep prices this low, most large chains have their own distribution centers.
These are warehouses where goods are stored before they’re shipped out to individual stores.
Distributing your stock from a single location rather than individual stores is more cost-effective and can help you save money when buying raw materials for your products.
If you’re looking to start your own business selling wholesale clothing or another product, it may be beneficial to partner with an established company that already has the resources you need.
Here is everything that you need to know about the benefits of working with a Walmart distribution center, how they can help your business grow and what it might cost you in the end.
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Walmart Distribution Centres: How They Save You Money
In this digital age, e-commerce continues to change the way we shop. Consumers now expect fast delivery, low prices, and convenient pickup options in addition to ease of ordering online. As a result, retailers are looking for new ways to offer an omni-channel experience without breaking the bank. Walmart is one of the biggest retailers in the world with over 11000 stores globally. They use their network of distribution centers to sell products directly on their website, or through third-party marketplaces like Amazon. Whether you’re considering using a third-party logistics provider or plan to build your own fulfillment center, it helps to understand how Walmart distribution centers save them money.
Efficient Warehousing and Inventory Management
As an e-commerce company, you need to be able to quickly pull products from your warehouse. Walmart estimates that 79% of their revenue comes from products that are stocked in their warehouse, while only 21% are sold through third-party vendors. This is possible through better warehouse management and inventory forecasting. By taking accurate inventory levels, forecasting demand, and optimizing workflow, a company can reduce the number of stock-outs and increase the number of products on the sales floor. This gives you more flexibility when setting prices and increases your margins.
Drop-Shipping at Scale
One of the most efficient ways to scale your e-commerce business is through drop-shipping. This involves purchasing products from a third-party vendor and shipping them directly to the customer. You’ll never have to worry about storing, handling, or shipping these products, which dramatically reduces overhead. When you’re managing thousands of orders at a time, you need to make drop-shipping scalable. Walmart uses an algorithm to forecast demand for each product and supplier. By predicting the demand for each product and the expected time to ship from the supplier, they can allocate enough inventory to cover demand. This also makes it easier to forecast demand for every third-party vendor. If you’re managing thousands of orders, you need a way to forecast demand for each product. This makes it easier to predict inventory levels, sales growth, and profit.
Fulfilling your own e-commerce orders
As an e-commerce business, you may need to provide an in-store pickup option or ship directly to the customer. While Walmart may be better at drop-shipping baby formula than your company, they’ve built the infrastructure to manage these orders. When customers place an order online, they choose an option to ship directly to their doorstep. The system uses algorithms to predict demand and find the nearest distribution centre. Once the product arrives, a worker scans the item, prints a shipping label, and sends the package directly to the customer. This is easier than managing your own inventory and logistics. However, it does require a significant investment in infrastructure.
Incorporating third-party vendors
Another method to scale your e-commerce business is by incorporating third-party vendors. These are vendors that you’ve worked with before, such as a manufacturer or supplier. You’ve already tested the product and proven demand. You’re now able to purchase the product wholesale, at a lower price. If your company is focused on omni-channel sales (online, in-store, and mobile), third-party vendors are a great way to scale. Walmart has thousands of suppliers that ship products to their distribution centres on a regular basis. Once the products arrive at the distribution centre, they can be listed on the website or shipped to a nearby store.
Key Takeaway
As an e-commerce business, you need to be able to scale quickly, efficiently, and profitably. One of the best ways is through efficient warehouse management and drop-shipping at scale. This allows you to purchase products at a lower rate and ship them directly to the customer. If you’re able to scale quickly, efficiently, and profitably, you can increase your market share and compete with larger retailers. In this digital age, consumers are looking for an omni-channel experience that only large retailers can provide.
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