“It’s the combination of culture in the area and the advantages you get with cost and speed to the customer,” says Jeff Walt, Manager in Wauconda, IL. FIDELITONE’s warehouse in Elizabethton, Tennessee is advantageous for a variety of reasons. The location is conveniently located to provide 1-2 day fulfillment to all major markets in the Eastern U.S. by ground service. The close proximity to major parcel carriers reduces freight expenses and improves service to the end customer. Labor costs are also lower than most in the U.S. which helps to reduce overhead costs.
A report by the National Retail Federation found that 75% of U.S. consumers expect free shipping even on orders under $50. Although customers expect free shipping, that cost must often be made up for by the retailer. The freight and labor cost savings that come from locating your fulfillment center in Elizabethton can be passed along to your end customers in the form of free shipping.
Three of our supply chain experts, Jeff Walt, Jay Meadows, Strategic Account Manager, and Todd Rohloff, General Manager in Elizabethton discuss what to consider when choosing a fulfillment center location.
Location. Location. Location.
Closer to your suppliers or closer to your customers? Having proximity to your customer base and/or proximity to your suppliers can provide different cost savings. “Try to find a location that will reduce freight cost on one end or the other. Sometimes it’s more important to be closer to the origin than the destination,” says Jay. For D2C fulfillment you want speed to customer. “Regional distribution points helps to improve transit times and reduce outbound transportation costs,” adds Jeff.
Elizabethton is within a day’s drive of 75% of the population on the East Coast. The fulfillment center is conveniently located near major highways and expressways.
Weather isn’t typically top of mind when considering a fulfillment center’s location, but Todd explains how Elizabethton’s steady climate increases productivity: “The average temperature is 61 degrees year round. We don’t get too many snow days so we can utilize all the working days every month. We push almost 100% of products out the door every day,” says Todd.
Elizabethton’s favorable labor market reduces costs.
In Elizabethton, there’s no personal income tax on wages or salaries so more money goes into the worker’s pocket. “The cost of living and doing business is a lot cheaper in Elizabethton vs. a larger city like Atlanta or Charlotte. Even the price of fuel is around 50 cents per gallon cheaper,” says Todd.
For a brand considering a third-partner fulfillment partner, wages impact your variable fees. Inbound receiving, pick and pack and manual kitting or assembly activity are all impacted by labor rates.
“The labor force is cheaper here than in most of the country so the client can get more bang for their dollar. A large volume handling client can get more workers on the line for less money so they can keep their overhead costs down,” says Todd.
Proximity to major parcel carriers increases speed to the customer.
The Elizabethton facility is very close to major parcel carrier sorting hubs including FedEx and UPS. This proximity allows for later pickups at the FIDELITONE fulfillment center, typically until 3pm Eastern Time. “The later the pickup is from the carrier, the more packages we can process,” says Jay.
“Most of our sorting is done very close to us. An order can be placed, picked, packed and shipped all on the same day and that’s an advantage to the customer.” says Todd. Anytime you can ship on the same day instead of the next day, you cut a day out of cycle time and increase the speed to the customer.
Elizabethton is a fun place to visit!
Collaboration with your supply chain partner is also important. At FIDELITONE, we operate in a very digital environment. We have lots of conference calls and video calls with our clients. We even offer virtual warehouse tours, but we still enjoy getting together in person from time to time.
Our visitors typically travel through Knoxville, Tennessee or Asheville, North Carolina to reach our fulfillment center. Elizabethton is just 50 minutes from Asheville where you can visit the arts scene downtown. From Knoxville, take a detour through the beautiful mountain town of Pigeon Forge where you can enjoy white water rafting, tubing, and amusement parks.
Here in Elizabethton, enjoy a beer with us at Yee-Haw Brewing. Check out the Bristol Motor Speedway if you like NASCAR.
Lean on your partner to help with the decision making process.
As businesses are looking to make decisions on where to locate their fulfillment center or whether or not they should add a second location, they should be able to lean on their supply chain partner to help model different scenarios.
“We have tools in house to run different scenarios and show what the impacts on speed to customer and costs are with multiple facilities v.s. one facility,” says Jeff.
Please contact our team with any questions or to schedule a virtual fulfillment center tour. Our supply chain experts are happy to consult with you on how to provide a solution to meet your specific needs.