How distribution and warehousing works

by | Oct 4, 2013 | Insurance

On the face of it, warehousing and distribution of goods appears to be quite straight forward; it seems to be little more than a facility that stores products until such time as they are to be forwarded to company’s involved in the wholesale or retail business, or in many cases, direct to the consumer.

In many businesses it is impractical to ship the product directly from the manufacturer to the consumer; this would not work well at all if the product was perishable such as ice-cream. Rather than this the manufacturer will do one of two things; build and operate company owned warehouses or contract with independent distribution companies who can warehouse and distribute the goods on demand. Needless to say, both methods will have to be covered with distributors insurance in Denver Colorado. Independent distribution is very popular with companies that distribute from a catalogue, multiple outlet chain stores and manufacturers with a very broad product offering.

There are certain perils associated with the distribution business including the fleet of vehicles used for the process and the goods that are in the warehouse as well as those in transit. The value of goods under the roof at any one time can fluctuate dramatically and Distributors Insurance In Denver Colorado takes this into account.

There are specialist distribution companies; these are more of an order fulfillment center than a typical warehouse that deals in the movement and storage of bulk goods. In an order fulfillment center companies that sell through catalogues or over the internet pack the goods and ship them directly to the purchaser. These fulfillment centers can respond very quickly to incoming orders whereas a distribution operation that deals with retail provides shipments to the various retail outlets that place their orders directly with the distributor or the wholesaler.

Distribution warehouses may all look the same on the outside but they can be very different on the inside. Many warehouses are little more than large buildings with the goods stocked inside in accordance with an inventory plan, others are climate controlled, refrigerated, high security or fully automated to aid in rapid distribution. These factors have a significant bearing on the premium that must be paid for distributors insurance in Denver Colorado.

Latest Articles