Consumer direct

As 1-800-Flowers looked for a site for a center to fill customer orders on the West Coast, it weighed a long list of critical factors everything from the proximity of major freight carriers to the number of days the facility might be closed by bad weather.

When it leased 140,000 square feet of distribution space at DP Partners' Logisticenter East Reno in Patrick, the company based at Carle Place, N.Y., joined a growing number of running fulfillment centers in northern Nevada.

The area, of course, has a long history as a distribution hub sending trucks filled with merchandise stored in northern Nevada warehouses to retailers' shelves throughout the West.

But the area is getting increased attention for fulfillment centers that ship directly to consumers who place orders either by phone or through Web sites.

The location selected by 1-800-Flowers, for instance, will handle orders for its Plow & Hearth subsidiary, an Internet company specializing in home-and-garden gifts.

Across town, Patagonia one of the pioneers of northern Nevada fulfillment centers is wrapping up a 175,000-square-foot addition to a west-Reno facility that handles customers orders worldwide.

Just a few days ago, MSC Industrial Direct Co. said it's adding 105,000 square feet to a facility in Fernley that fills orders for industrial supplies.

And more fulfillment centers at least one of them a big name in retailing are likely to land in the area in coming months.

It's a trend that's welcomed by economic development officials.

"In the rural areas, those are positions that pay a decent salary," says Ron Weisinger, executive director of the Northern Nevada Development Authority.

The factors that help make northern Nevada a wholesale distribution hub notably, the fact that it's a one-day truck trip to most Western markets also play a role in the decision of retail-oriented fulfillment centers.

"Proximity to the West Coast without physically being in the West Coast is a tremendous part of most companies' decisions," says Brian McGee, vice president of real estate and construction for 1-800-Flowers.

Another big drawing card is the availability of less-than-truckload carriers and parcel services such as UPS and FedEx.

McGee calls the availability of good freight services "tremendously important and clearly the one item that will make or break most decisions."

UPS, for instance, operates a major hub at Sparks a facility that was built here because of the number of shipments generated by the traditional wholesale distributors in the market.

FedEx, which has seen growing interest in northern Nevada locations from its customers, expanded its facilities in Reno within the last couple of years.

Those centers, as well as the multitude of trucking companies that flock around distribution centers, are a "tremendous plus for the area," says Aaron Paris, executive vice president and chief operating officer of DP Partners.

Dave Abeloe, distribution center director at Patagonia in Reno, says the large number of less-than-truckload carriers "gives us a lot of options moving product in and out of the area."

Another important factor is the availability of a workforce skilled in warehousing and distribution, says Shelley Boxer, vice president of finance for MSC Industrial.

And quality of life plays a role as well.

"The Reno area is hard to beat," says Patagonia's Abeloe.

McGee says 1-800-Flowers executives looked carefully at transportation options, the availability of labor, the cost of utilities, the cost of real estate and property taxes and the likelihood that bad weather could hamper operations.

The Reno area, he said, did very well on nearly all those criteria.

Paris notes, however, that companies that distribute substantial amounts of inventory manufactured in Asia might have second thoughts about fulfillment centers in northern Nevada.

The reason: They want to avoid the crowded Port of Oakland.

Patagonia, for instance, finds it's often more efficient to import merchandise through the Port of Long Beach a day's truck journey away from Reno than to use the Port of Oakland.

Even so, Ken Pierson, director of business development for the Economic Development Authority of Western Nevada, says several consumer products companies have been drawn by the company's strong freight infrastructure and are looking seriously at northern Nevada locations for fulfillment centers.


Use the comment form below to begin a discussion about this content.

Sign in to comment