4 things to consider when deciding where to locate a distribution center

Companies must untangle a complex web of factors when deciding not only where to locate a distribution center, but also how to run it, reports DC Velocity.

These factors vary, depending on a company's own business needs, economic conditions and market trends, according to the report.

Here are four major factors to consider.

Cost: Companies must examine the financial constraints of a location, as cost of labor, land, construction, power and taxes can vary considerably in the U.S. — even within the same geographic region of the country, according to the report.

Automation: The warehouse industry is growing increasingly high tech. More and more, companies are looking for a facility that can support automation capabilities and a knowledgeable workforce to build and manage the technology.

"Last-mile" delivery: Online retailer redefined the idea of "last mile" delivery — or the movement of goods from a distribution center to a final destination in the home — through the use of storage lockers customers can use to pick up packages. According to DC Velocity, more companies will look for sites where they can place these types of storage lockers, such as transit centers or convenience stores, to provide customers with the opportunity to pick up their packages whenever they want.

International trade: Companies must look outside of local or national concerns during their site-selection process, according to the report. Export opportunities and trade agreements should play a role when deciding where to establish a distribution center.

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