I'd not have it too close to the shed as depending on what is in there will depend on any aroma. Dont know about flies as mine are sited behind the garage.
the bin shouldnt be in full sun though. It will be worth having a path to it to make it easier to wheelbarrow stuff to and from it.

I put my compost bins on an island in the middle of my allotment. Then I've got paths down and across the middle of the plot. I've found this give me 2 benefits - I'm never far from the bins to add compost to, or when spreading it. The paths give me a neat way of getting 4 smaller plots; ideal for crop rotation. I'm not allowed a shed or other large structure so I'm not restricted by such considerations.

If you are composting correctly there should not be any bad smells... basically put the bin(s) where it suits you, having worked out where other things are going to be. Rogerbee's idea is a good one depending on the size and shape of your allotment.

Depending on the size of your allotment, one thing which is time consuming and annoying is having to move lots of green waste, clippings, weeds etc from one point all the way to a bin at the other end. If you have some plastic cones or other type of moveable bins, you can use these in situ and then only move the partially rotted material to your permanent 'bin' to rot down fully. Saves a lot of work moving bulky material.