Need to reach customers in the Southwest and West Coast? Consider a Phoenix fulfillment center.
Dozens of major retailers and brands have done the math and elected to locate major distribution centers in the Phoenix area, including Walmart, Home Depot, Target, The Gap, Amazon, Chewy, Dick’s Sporting Goods, and PetSmart.
Smaller businesses can expand to Phoenix without the need to build by partnering with one of several logistics companies in the area, including Amware Logistics, which offers Phoenix fulfillment center services for direct selling companies and e-tailers. Phoenix is an efficient distribution hub to reach your West region customers. The accompanying map indicates parcel transit times from Amware’s Phoenix warehouse.
A cost-effective alternative to Southern California
The Port of Los Angeles and Port of Long Beach in Southern California have experienced record volumes and unprecedented delays in recent years. As a result, retailers and e-tailers that rely on these ports to bring in critical inventory from Asia have now occupied virtually every usable warehouse facility from Los Angeles through the Inland Empire (the metropolitan area that borders Los Angeles county to the east). Furthermore, with warehouse vacancy holding steady below 1%, many towns in the Inland Empire have recently suspended new warehousing projects due to environmental concerns.
Fortunately, there are alternatives to an LA warehouse that still provide reliable access to the West Coast’s busiest ports and the population of Southern California. Online sellers can realize significant savings compared to an LA warehouse by using a Phoenix fulfillment center, thanks to benefits such as:
- Lower rent. Inland Empire warehouse rents rose more than 80% year-over-year in Q1 2022, making the region virtually unaffordable for many e-commerce businesses.
- Lower business taxes. Arizona has a 9% corporate tax rate — nearly 4% lower than California’s 8.84% rate. In addition, Arizona’s lack of inventory tax and numerous tax credit programs make a Phoenix fulfillment center much more viable for growing e-tailers.
- Lower minimum wage. While you’ll pay a minimum of $15 per hour in the Inland Empire or $16.04 per hour within Los Angeles County, the minimum wage in the Greater Phoenix region is $12.80 per hour. This difference can substantially reduce overall labor costs, especially during peak seasons when fulfillment houses pull in a lot of temporary labor.
- Lower operating costs. Operating costs for a Phoenix fulfillment center average 36% less than a comparable California facility.
Phoenix By The Numbers
If you’re still not sold on the Greater Phoenix region as an alternative to California, consider the following numbers:
- 1 day – The time it takes to fulfill an order and ship it to Southern California
- 2 days – The number of days to fulfill orders to San Francisco, Salt Lake City, Denver, or Dallas
- 202 & 303 – State highways that have streamlined freight transportation through and around Phoenix
- 300 – The average number of sunny days in Phoenix each year
- $961,000 – The amount you’ll save on real estate costs with a Phoenix fulfillment center compared with a California fulfillment center
- 5,700 – Number of manufacturers operating in Arizona, ensuring easy access to domestic suppliers
- 1,000 tons – Air cargo volume handled daily at Phoenix Sky Harbor International Airport
- 4.8 million – Population of the Greater Phoenix metropolitan area
- 36% - Percentage you’ll save on building costs if you choose to build a new warehouse in Phoenix vs. Los Angeles. As the chart below shows, you’ll save even more if you choose Phoenix over other popular West Coast fulfillment hubs, such as Seattle (37.5% savings) or Portland (50% savings)
With statistics like these, there’s no doubt that a Phoenix fulfillment center will set up your business for growth.
Phoenix Fulfillment Center Benefits
People flock to Phoenix for the sun and the warmth (It’s a dry heat!). But what’s really driving businesses to locate fulfillment operations in Phoenix are the bottom-line business advantages. Here are a few, according to the Greater Phoenix Economic Council:
- 85 million consumers are within a one-day truck haul
- 34 million consumers are within a half-day truck haul
- All of Southern California is covered with next-day service
- Three of the world’s largest economies — California (#9), Texas (#13), and Mexico (#14) are practically next door
- Phoenix boasts the third-largest labor pool in the United States
- Arizona is a right-to-work state
- There is no inventory tax
- Rail service is excellent and includes two trans-continental railroads to reduce your inbound freight costs
Do we have your attention yet?
Amware currently operates two adjacent Phoenix fulfillment centers. Our Phoenix locations offer a much lower operating cost and a more robust workforce than comparable California fulfillment centers. In addition, Phoenix’s east-west highway access and reliable airfreight and trucking options enable us to provide our customers with fast and affordable service to customers across the Western United States.