Break-Bulk Distribution

Companies that sell their products through online retailers typically operate via one of two alternative concepts:

Supplier Relationship
Products are sold to the online retailer, who then becomes the owner of the goods until they are sold to the final customer.

Platform Relationship
Products are sold via the retailer's online (commercial and/or logistics) platform, where the supplier remains the owner of the goods until they are sold to the final customer.

Depending on the situation, a platform seller often has the opportunity to combine the online retailer's commercial platform with additional logistics services, where the retailer also takes care of product handling and shipping. Alternatively, the company can decide to perform these fulfillment activities itself (either in-house or via a logistics service provider) and dropship products that are ordered on the retailer's website directly to the customer.

Customer Challenges

Both approaches to selling via online retailers bring their own logistics challenges that are important to address.

Supplier Relationship
Online retailers typically replenish their stock in small quantities. It is therefore vital for any company applying this concept to have an efficient replenishment process. In other words, optimization of picking, packing and shipping to retailer warehouses throughout Europe is key.

Penske's Added Value: One way Penske helps its customers meet this challenge is by combining EDI outbound order confirmations with SSCC labeling. Penske informs the online retailer on PO level when products are ready for shipping. The SSCC content, which is included in the EDI information, enables the retailer's warehouse personnel to verify and scan inbound shipments per shipping carton instead of per individual unit. This in turn significantly lowers the handling fee that the online retailer will charge to its supplier.

Platform Relationship
Online retailers often apply very high storage rates for your products that may increase even further when products are stored over a longer time period (assuming you use these additional services). It is therefore very important to optimize the amount of product stored by the retailer and realize a high stock turnaround ratio.

Penske's Added Value: One way Penske supports its customers with this challenge is by offering very competitive storage rates at our own warehouses (e.g., 20-30% below the main port areas and 50-75% lower than the large e-commerce platforms). Companies combining this concept with dropshipments or other sales platforms also benefit from one central stocking point. This centralized approach improves stock availability levels, reduces the number of stock-outs and lowers overall inventory requirements.

Penske Solution

Regardless of the applicable commercial concept, a strategic location for a European distribution center that can function as a break-bulk center between your global manufacturing network and your customers' European warehouses is of the greatest importance. Penske's warehouses are located in the south of the Netherlands, right in the geographical center between Rotterdam and Antwerp, Europe's largest container ports. We combine this hotspot location with highly efficient day-to-day operational execution and extensive experience in value-added services such as customer-specific repacking activities. Through our excellent direct connections into Europe's major markets, Penske delivers with pre-approved carriers into the major online retailers' European warehouse networks every single day.

More Information

For more information on our break-bulk distribution concept as well as our other logistics services, please contact us directly via +31 (0)165-576241 or PLE.salesnl@penske.com.