(Image courtesy of TTI).

Distributors Expand Warehouses to Handle More Orders and Fill Them Faster

Trying to sustain its recent revenue growth, Digi-Key Electronics said on Wednesday that it would expand its distribution center in Thief River Falls, Minnesota, by a million square feet. The company plans to start construction next month and invest more than $300 million into the project.

The privately held company reported revenues of $2.3 billion last year, up 26 percent from the previous year and topping the $2 billion mark for the first time. The company is growing faster than market leaders Arrow and Avnet, which generated $26.81 billion and $17.4 billion last year, respectively.

Other electronics distributors are building out warehouses. TTI, one of the largest suppliers to the industrial, military and aerospace markets, is moving into a 800,000-square-foot distribution center in Fort Worth, Texas. The company estimates that the warehouse cost about $40 million to construct over two years.

The company, owned by Warren Buffet’s Berkshire Hathaway, said that the new building would expand its warehouse capacity from 1.2 million square feet to more than two million square feet globally. The distributor also plans to expand its warehouses in Europe, Asia and Mexico to process and ship orders faster.

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