Retail

Why eCommerce Loves Ohio

When you think of the future of online retail, you may get a vision of innovative online retailers at a startup in Silicon Valley or the hip streets of NYC or L.A. But, in actuality, if you want to see what the future of online retail looks like, you might need to look to Ohio.

Fulfillment, while perhaps not the most flashy component of eCommerce operations, is nonetheless vital to the entire equation that often decides the winners and losers of the retail game. As a recent article from CNBC notes, fulfilling an online order takes a massive facility and big investments, and right now, there is a growing hub for such operations in the Buckeye State.

“For new development fulfillment centers, Ohio is usually at the top of the list for retailers,” Frank Layo, a retail consultant at Kurt Salmon, who advises retailers on supply chain and logistics planning, told CNBC.

As the article details, Ohio offers a number of the key elements that eCommerce businesses are looking for: prime geographic location in the middle of the country, a strong transportation network, attractive tax incentives to do business in the state and a large and skilled labor force.

Location is a prime motivator for many retailers choosing fulfillment providers. Ohio is ideally situated near large population hubs in the center of the country. But proximity to consumers is just one key advantage. The state also does an excellent job of sweetening the deal with tax incentives for large organizations to do business within its borders.

“[Ohio] gives a lot of tax incentives, abatements or infrastructure loans to companies in order to attract business,” Ward Fitzgerald, CEO of Exeter Property Group, the largest private equity warehouse and logistics space owner in the U.S., commented to CNBC. He estimates that the “savings could be 15 to 20 percent of total operating costs.”

Add to that the fact that Ohio has nearly 6,735 interstate lane miles (according to the Ohio Department of Transportation) and 13 intermodal railroad terminals with 5,200 miles of rail lines, and you’re starting to get an idea of why major corporations, including Home Depot, Amazon, JCPenney and Victoria’s Secret, call Ohio home to some of their largest distribution hubs. And they are getting more neighbors every day.

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