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What Is a Branch Warehouse?

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  • Written By: M. McGee
  • Edited By: Lauren Fritsky
  • Last Modified Date: 01 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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A branch warehouse is a common term for a distribution center or distribution warehouse. It is a location where a company stores goods, outside of its main warehouse, in order to be closer to potential customers. The three main terms are basically interchangeable, but they do have common tendencies associated with them. A branch warehouse is the term used when the company owns the warehouse, distribution warehouse is used when a third party owns the facility, but it only stores the one company’s goods, and distribution center is used when a third party owns the warehouse and stores the goods of many companies.

The main purpose of a branch warehouse is placing goods closer to potential customers. If a company was located in the southwestern United States and needed to ship goods to the northeastern part of the country, the cost and time of shipping would be a major drain. By shipping large quantities of common goods to locations that are closer to potential customers, the company reduces the per-item shipping cost and improves good delivery time.

Many companies will place a branch warehouse closer to major shipping port for the same reason. Large international air and seaports and package delivery hubs will commonly have huge areas of warehousing near the facility. This allows companies to provide the first step of transport, that of the warehouse to the shipper, without needing additional personnel.

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While the terms branch warehouse, distribution warehouse and distribution center all have the same meaning, they are often viewed as slightly different. A branch warehouse usually owned by the company that stores goods within it. In addition, storage for shipping is usually seen as the primary purpose of the warehouse.

A warehousing company, a business that specializes in the storage of other firm’s goods, commonly owns the distribution versions. These facilities are essentially the business versions of self-storage units. A company will rent out all or some of the building and keep its goods there. Distribution facilities are typically used less for long-term storage and more for turnover shipping.

Distribution centers will occasionally feature full third-party shipping support. A company will use the center as a branch warehouse, but the people working at the center handle all the storage and delivery of the goods. Basically, once the goods are part of the distribution network, the warehouser will handle the particulars of the item. This frees up resources at the parent company for use in other projects.

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