Business Process, Managed Accounting


Why You Should Diversify Your Inventory Across Multiple Warehouses

Posted on May 22, 2023

By Stephen Solt

June 17, 2024

In today’s fast-paced and highly competitive business environment, efficient inventory management is critical in determining a company’s success. One strategy that has proven to be effective is diversifying inventory across multiple warehouses. This approach offers numerous benefits, from reducing logistical challenges to enhancing customer satisfaction. What advantages can diversifying your inventory bring to your business? And how can KDG help?

Improved Order Fulfillment

One of the most significant advantages of diversifying your inventory across multiple warehouses is the ability to enhance order fulfillment. By strategically placing stock across different locations, businesses can reduce shipping distances and transit times, ensuring quicker delivery to customers. Fast delivery is critical to customer success. Studies show that 84% of consumers are likely to not return to a brand if they have a negative delivery experience. Order fulfillment improves customer satisfaction and enhances the overall customer experience, potentially leading to repeat business and positive word-of-mouth recommendations.

Scalability and Flexibility

As businesses grow, their inventory requirements evolve. Having multiple warehouses offers the flexibility and scalability needed to adapt to changing market demands. Companies can strategically allocate inventory across different locations based on:

  • Customer preferences
  • Sales trends
  • Regional demand variations

This flexibility empowers businesses to optimize their supply chain and ensure that products are readily available to meet customer needs. Proper allocation also ensures that stock levels and storage costs are optimized.

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Crisis Prevention

Disasters, both natural and human-caused, can strike unexpectedly and wreak havoc on supply chains. By keeping inventory in different geographic locations, businesses can mitigate the risk of a single catastrophic event wiping out their entire stock. Should a disaster occur, having multiple warehouses allows for continuity of operations, as alternative locations can continue to fulfill orders while repairs or restocking efforts take place.

Cost Optimization

Diversifying inventory across multiple warehouses can also lead to cost optimization. By placing inventory closer to customers or distribution centers, businesses can minimize transportation costs, including shipping fees and fuel expenses. Additionally, inventory diversification allows for better negotiation power with shipping providers, as higher shipping volumes can lead to discounted rates. A well-optimized inventory distribution strategy can help businesses reduce costs and increase profitability.

KDG, Zoho Inventory, and Diversification

Zoho Inventory is a powerful tool for managing your inventory across multiple warehouses. This cloud-based inventory management tool allows you to transfer products across multiple warehouses and minimize your risks by managing drop shipments, inter-warehouse transfers, and backorders. Inventory also allows you to group and bundle products, batch track, and integrate with major shipping carriers.

Diversifying your inventory will be hard to manage without a proper inventory management system. Turn to Zoho Inventory and KDG’s Zoho Partner team to help. Contact us to start a conversation and learn more.

Steve Solt headshot

Stephen Solt is a Senior Accountant at KDG. With his eye for detail, his ability to problem solve, and his dedication to customer service, he’s helped numerous businesses see their financial futures clearly.

Want to learn more? Book a meeting with us today!

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