Best place to locate a warehouse

[oznomad]

I sell items online and send them USA wide.

We dispatch about 100 items a day - all over the USA (it's a mass
market product so our destinations are very similar to population
spread through the US)

Our items will be sent using UPS Ground.

We are looking for one central warehousing and distribution facility.
Is there a location which is best for this sort of operation based on:
- customs and government charges for importing goods into that state
(for when our shipments from China arrive)
- the cost of warehousing (is it expensive to warehouse and dispatch
in that area?)
- the cost of shipping USA wide using UPS Road from that location

I have been advised that Louisville, Kentucky is a good place because
it's where the UPS hub is but I realised it's an air hub so that
probably doesn't make any difference to our shipping costs.

If anyone has any suggestions that would be greatly apprecaited!

[airwave75]

good day!

we did a similar study and determined Los Angeles to be the optimal site, because it doesn't incur backtracking

just to share how we did it, we made cost comparisons based on 5 candidate locations. For each candidate:

1. determine the inbound cost - cost incurred to ship from our source (China) to the warehouse. Note: This is only relevant if you will shoulder the transportation cost from the source.

2. determine the outbound cost - cost to deliver from the warehouse to all clients (in your case, using UPS Ground)

3. calculate the Warehouse Operating cost - main cost components are labor and rent of space.

The above costs were annualized based on our projected number of transactions for the year.

You may also look at qualitative aspects of each candidate location. You may end up choosing the 2nd or 3rd least cost location when qualitative considerations are evaluated.

[oznomad]

We have calculated that the largest proportion of our customers will be on the eastern seaboard. Given this extra information, wouldn't an east coast (eg. Kentucky) location be better?

[airwave75]

yes, it may be optimal to locate it where majority of your clients are.

This may also be the result if you were to do a cost comparison:
a. Given your customers' location, a Kentucky site will have much lower outbound cost compared to the LA site.
b. Even if LA has a lower Inbound cost vs Kentucky, it may not outweigh the Outbound savings of the latter.

[serge911]

thx for the info