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Leading musical instrument retailer Sweetwater has unveiled its first distribution center outside of its Fort Wayne, Indiana headquarters and music campus in Arizona.
The company, a pro-audio gear e-commerce provider, signed a five-year lease for 100% of 303 Logistics, a new 350,000-square-foot warehouse at 16801 W. Glendale Ave. this summer to better reach its western customers and support its growing operations.
The company started receiving inventory in September and shipped its first package this month. The Glendale facility will serve as a fulfillment center for tens of thousands of products and accessories that are sold by Sweetwater, including microphones, speakers and mixers, as well as drums, guitars and band and orchestra instruments. Each package is also topped off with a small bag of candy.
The Phoenix Business Journal recently toured Sweetwater's new fulfillment center and spoke with the vice president about its operations and future plans. Click through the gallery below to see inside the facility.
Fort Wayne, Indiana-based Sweetwater, a musicial instrument and pro-audio gear e-commerce provider, recently leased 100% of a large industrial facility in Glendale.
Right now, Sweetwater has about $8 million worth of inventory in its Arizona facility, and by next year it is expected to have $15 million worth, or about 30,000 items in the warehouse. The facility will account for about a quarter of what the company ships.
Robert Gerwig, senior vice president for distribution and logistics at Sweetwater, said they currently ship 250 orders a day and by next year expect to ship up to 4,000 items per day out of the facility, which includes an efficient system for receiving, processing, storing and shipping orders. Sweetwater, which primarily uses FedEx and the U.S. Postal Service, said it works with hundreds of vendors.
Sweetwater is now one of multiple e-commerce tenants that have taken down space along the Loop 303. Its new facility in Glendale is located nearby other known distribution facilities including Walmart and Amazon. Developers are also in the process of bringing more 1 million-square-foot buildings, as well as a data center campus, to the remaining agricultural land in the area.
Behind the deal: How Sweetwater landed in Arizona
The Glendale facility checked a number of boxes for the music company, but the leadership team's past relationship with the Grand Canyon State is what brought them to Arizona in the first place.
In February 2020, Sweetwater had completed building a similar-sized warehouse in Fort Wayne, representing a $50 million investment. Today, the facility holds about $170 million in music gear.
Since then, demand has continued to pick up for the company, which said it has grown every year since opening in 1979 with the exception of 2008 due to the Great Recession.
Needing more space, Sweetwater analyzed the ZIP codes of its customers and looked at opening a West Coast facility in Reno, Las Vegas, Salt Lake City, the Inland Empire or Phoenix.
Gerwig was also already familiar with Arizona from the time he spent working for Intel Corp. in Chandler and for Macy's, which operates a large industrial facility in Goodyear. His mom, sister and their families also live across the Valley in Gilbert and Tempe.
"Coming back to Phoenix felt like one of two locations in the entire world that's kind of like home, and I said, 'If you want me to come and help start up the facility, it's going to need to be Phoenix,' so I'd like to think I helped sway that a little bit, but honestly it's a really good location because of where our customers are located," he said.
Other sites around Arizona the company considered were in the Phoenix–Mesa Gateway Airport area and along I-10 near Avondale. After flying out in December last year and visiting about eight locations, they ultimately chose the Glendale site due to the location along the Loop 303, availability of space and the growing labor market, Gerwig said.
Sweetwater will continue to hire up to 290 people by the second half of next year at the Glendale facility and has hired about 50 so far. Gerwig said they are still working on completing and building out different areas within the warehouse as it scales up operations.
Sweetwater was founded more than 40 years ago as a small music studio operating out of a VW Bus, which is incorporated into the company's marketing and branding materials, and eventually transitioned into being a music retailer.
The retailer said it reached $1.43 billion in sales and facilitated 4 million orders in 2021 and saw a revenue growth of 24% over 2020. Last year was also the second consecutive year the company broke the $1 billion revenue mark, it said in February. Sweetwater has more than 2,300 employees.
