For: Distributors comparing warehouse fulfillment with factory-direct delivery.
The decision: Whether a specific order should ship direct and who must own the work that remains.
60-second answer: Compare net order contribution and cash timing for both routes. Direct shipment can avoid handling and storage, but receiving, access, installation, claims and returns still need named owners and a budget. Decide by the order and site, not by a blanket rule for new customers.
Price the same delivered outcome
Pull both freight offers, factory terms, customer scope, receiving requirements, installation estimate, return policy and recent accessorial invoices. A warehouse route that includes assembly cannot be compared fairly with a direct route that stops at the curb. List what the customer will receive and who completes each remaining task.
| Cost or responsibility | Through warehouse | Factory direct |
|---|---|---|
| Freight and handling | Inbound, receiving, storage, pick and outbound cost | Factory-to-site rate and any factory handling |
| Inspection | Defined warehouse check plus site receipt | Named site receiver, instructions and exception process |
| Installation | Quoted labor and access scope | Same required outcome, separately assigned |
| Exceptions | Expected rework from comparable orders | Budget supported by similar direct-order experience |
| Cash timing | Supplier due dates against customer receipts | Shipment invoice may precede installation acceptance |
Compare net selling revenue less the full direct cost of each route. Then show any overhead allocation consistently. Where damage or redelivery experience is too sparse for an expected-cost estimate, state that uncertainty and run a separate adverse case. Do not manufacture an industry exception rate to complete the table.
The handoff sheet is part of the sale
Name the party booking the appointment, the person receiving, the installation lead and the customer’s escalation contact. Confirm dock or liftgate needs, access hours, vehicle restrictions and storage readiness. Send inspection and damage-reporting instructions before dispatch. A clean delivery signature does not automatically defeat every claim, and a note on the receipt is not the same as a complete carrier claim.
Ask the factory which documents travel with the shipment and where returns are authorized to go. Confirm warranty administration separately from transit damage and assembly defects. The dealer’s legal and contractual obligations do not disappear because the factory loaded the truck, but their exact allocation should be checked rather than assumed.
When a direct route deserves a pause
- The receiving location cannot confirm access or identify a responsible recipient.
- The quote includes a finished installation but no crew owns assembly and commissioning.
- Factory payment is due while customer acceptance remains undefined.
- The supplier’s return conditions conflict with what sales promised the buyer.
Wholesale revenue growth does not establish the share of orders shipped direct. Use your own order results to classify suitable configurations and sites. A first-time customer with a capable receiving team may be a sound direct candidate; an established customer with an unready site may not be.
Close the order after the last charge arrives
- Approve the route using matched scope, contribution and cash timing.
- Issue the handoff sheet and confirm receiving and installation readiness before dispatch.
- Reconcile freight adjustments, rework and returns to the order, then update the next estimate.
Continue with FEX
FEX editorial guidance: the decision tools and operating recommendations in this guide are FEX analysis. They are not manufacturer specifications, contractual entitlements or industry benchmarks.
Editorial update, October 7, 2026: Removed an unsourced damaged-shipment anecdote, blanket assumptions about first-time customers and the inference that wholesale revenue growth proves more drop shipping.
