When you have an eCommerce, some terms you must know by heart since you will deal with them practically every day. However, if you're just starting out, you may find that one gets in your way. Because… what is a logistics center?
If you are not clear about the definition or do not know if it is what suits you or not, then We are going to help you clarify everything that this word entails.
Table of Contents
What is a logistics center
The first thing you have to understand perfectly is what we mean by a logistics center. And it is about a place where the storage, organization and, in many cases, distribution of products takes place What do you sell.
Let's take an example. Imagine Amazon. It's a big store with a lot of products. Many of them are from third-party sellers, but others are managed directly by the company and need a place to store their stock. But also where to organize and distribute them. In other words, if you order a product know where it is and prepare it to send.
This does not mean that if you have an eCommerce you must necessarily have a logistics center, since most of these are set up when the company is too large and cannot store all its products or distribute them in an organized manner. But it is true that at the beginning, every logistics center in an eCommerce is your home. Or a warehouse where you have the products.
As you grow this gets smaller and you need more and more space. And that new space is what is considered that storage, organization and distribution center.
What functions does a logistics center have?
With what we have told you before, it is normal to think that the functions are going to be the ones we have referred to: store, organize and distribute. But in reality there are more functions to take into account such as:
- Centralize activities. Think about the following: you get an order for two products. You have one in warehouse A and the other in warehouse B, which is 15 kilometers from the previous one. That means you have to spend time collecting both. Now, you already have them, but it turns out that you prepare the orders at home, which is 30 kilometers away. You would have to go home, prepare it and then ask for a messenger to come or take it yourself, and it is wasted time.
- By centralizing everything you would have your warehouse, your order preparation section and your courier ready to collect all orders for that day. Wouldn't it be easier that way?
- Monitor stock. Because many times if you don't carry a good inventory you can be selling products that you don't really have, and then you will have a hard time, in addition to having to make returns that, sometimes, can cost you money.
- Manage time better. In this way you will be meeting deadlines, or even ahead of them, which gives a good image to customers.
Types of logistics centers
A logistics center does not have much mystery. They are spaces intended for the organization of a store online or also from a physical store (because they can distribute the products that are missing in stores more easily). However, do you know that there are five types?
Yes, and each of them has unique characteristics that can be more interesting for your business. We explain them to you.
Integrated Merchandise Center
Also known by the acronym CIM, it is a center located almost always next to the cities, on the outskirts of it. Due to its proximity, They are the ones in charge of distributing the products they have to the customers.. But not only them, but also to providers and other “physical” channels they can sell their products.
For example, a hairdressing products company. You could sell to clients but at the same time you can have an agreement with several hair salons to serve them your products.
Although it is widely known by this name, it is also called transport hub, or transport node.
In this case, it is a center with quite a large extension and that deals with logistics transport. We could say that it is the place where the company's trucks are loaded and unloaded to distribute the products they sell.
This type of logistics center is the best known, and almost the one that refers to the definition of the term. It is a space in which products are not manufactured or altered, but rather serves as storage and management of products.
We could tell you that it is a more extensive logistics platform. But there is yet another difference. And it is that in him yes that the manufacture and/or alteration of the products is carried out that later pass to another part of the polygon to be managed and sent.
Logistics activity area
Known as ZAL, this center is located in the port areas and its objective is to control the logistics that are carried out by sea, land or air.
Am I interested in having a logistics center?
Now yes, the big question. Should I have a logistics center for my business? Suits me?
The answer is not as easy as it seems. And it is that, if you are starting but you sell many products and you have a significant stock, you may need to rent a warehouse where you can store them while the orders arrive. If these are few, you will have no problem managing them, but what if there are many? Apart from hiring people, the safest thing is that you need to replace the products that are sold and that you can expand more.
So there will come a time when yes, you will need that logistics center to be as efficient as possible for your customers. But there is no predetermined time to do it; Some entrepreneurs start out and already have this covered; while others take many years to consider it to improve their business.
The important thing is that you know what a logistics center is, the functions you can do with one and the types that exist. Whether you need it or not will tell your business and the results you are getting with it.