[cegascon]

YEs those warehouses are called 3PL's (Third party logistic provider) the issue with those is that local products and niche items aren't using those since they don't have the volume to be in them. The idea of having one warehouse is good but most of the large companies (Does using 3PL's) already have theirs signed. Now I could partner up with them but it won't allow me to gain diversity in my items.

I know I sound negative about it but challenge me on that cause it would be the easiest scenario to go with if I crack that model correctly.

[akg_67]

If you are using niche product and your suppliers are small, they are too small individually for 3PLs but collectively they can be big enough for 3PLs to accommodate them. Pool together such small niche suppliers yourself to be attractive for 3PLs It is similar to consolidating fractional container load to have one shipping container worth of material.

If your suppliers are large companies, they already have 3PLs. So you need to go to the 3PLs which has most of your large suppliers or setup your operation within local delivery area of these 3PLs. Most 3PL warehouses tend to be located nearby to each other.

I will suggest talking to operation research people at a business school. Those people teach and do this for living. Also look into some of the case studies on consolidator models for ideas (Amazon, Walmart, Costco, Toyota).

You challenge is you are too small of a consolidator and your suppliers are either too small or too large. You need to hack existing models to fit your need. I would most probably start with a hybrid approach of setting up my consolidation and shipping operation near the warehouses of my large suppliers and offer onsite inventory storage and shipping for small niche suppliers. Until you become large enough, you will have to give up some efficiencies of scale.

BTW, you are not in software business, you are in consolidation and shipping business.