The Warehouse

A distribution network is a set of bets about where your customers are, how fast they expect delivery, and how much that speed is worth to them. Owning a warehouse locks in fixed cost regardless of volume; outsourcing to a 3PL converts that fixed cost to variable cost but at a higher per-unit rate. The right structure depends not just on current volume but on how certain you are about where growth will come from — and whether a competitor's delivery speed is already costing you revenue.