Fulfillment Center vs. Distribution Warehouse
Originally published on December 2, 2021 by Logiwa Marketing, Updated on October 13, 2022
When it comes to running your own business, there can be many different parameters you have to keep in mind. From employee happiness and output to incoming profit and outgoing overhead, there are a lot of things to stay on top of.
There are several ways to make sure that you’re able to stay on top of your business without losing your mind. So long as you have a clear head, you can make sure that your business will succeed, going forward.
One of the ways to make sure that things work out better for you, in the long run, is to make sure you have a fulfillment center.
In this guide, we’ll explore:
- Fulfillment Centers vs Warehouses
- Fulfillment Center
- Why Should You Consider a Fulfillment Center?
- No More Packing Boxes!
- Focus on What Matters
Fulfillment Centers vs. Warehouses
From the outset, you might believe that a fulfillment center and a warehouse are the same things. However, although they have quite a few overlapping attributes, in truth, they are different things.
Both are large buildings that hold inventory for businesses that sell goods; however, the use cases and services provided are often quite different.
When it comes to warehouses, what is typically being referred to as a location where a company stores its products for a long time. A warehouse can be made of many different materials, but it’s typically a large storage center or industrial space that is meant to store an organization’s inventory in bulk.
In a warehouse, you might see specific equipment such as forklifts and containers. No matter the type of storage facility, you will see many shelves that are packed tight and stocked with large amounts of products.
Of course, warehouses can then be separated into various other categories, such as ones that are geared towards businesses, ones that tend towards wholesale companies, and basic retailers, to name a few.
So long as an organization is large enough to need a separate location to store its merchandise, you’re likely looking at a warehouse.
It also helps that leasing warehouse space is typically more cost-effective than buying for small- to mid-sized businesses, but at the end of the day, this is dependent on how much space you’re trying to lease. You may also need to work on increasing warehouse efficiency by using tools such as warehouse management software.
When it comes to fulfillment centers, these, like warehouses, are physical locations where items are stored. However, rather than just being locations where items are held for a business, fulfillment centers see much more traffic than warehouses.
The reason for this is that people will go into and out of fulfillment centers more often than warehouses. A fulfillment center—typically—will use a third-party logistics service (also known as a fulfillment provider) to fulfill the customer orders for ecommerce retailers.
The fulfillment center exists as a location to get online orders to customers faster than otherwise. The goal is to deliver online orders to customers in a timely fashion to relieve the burden off of ecommerce companies.
Bonus: If you want to have detailed knowledge regarding fast shipping, please look at our blog post about the topic.
To put it in its clearest terms, fulfillment centers specifically work to make the business sides of things easier on actual businesses. Getting the wares out for a specific order for a specific customer is very important, and it’s the type of thing that can make or break a business.
That’s why it’s best to work with a fulfillment center so that you don’t have to run the risk of bungling this element of business!
Why Should You Consider a Fulfillment Center?
Now that this article has briefly gone into the differences between fulfillment centers and warehouses, you may be wondering what the pros and cons are of selecting one over the other.
Although this article will not be delving into the specifics of warehouses, it will be focusing on fulfillment centers and what makes them essential to your business.
Read on to learn about some of the benefits you’ll gain if you decide to use a fulfillment center.
Eliminate Finding Storage Space for Your Inventory
Unless you’re one of the lucky ones who run a brick-and-mortar store, you’re likely strapped for space when it comes to your storefront.
Or, even worse: if you’re working out of your house or your garage, you’re lucky if you manage to find any free space!
But if you decide to work with a fulfillment center, suddenly you won’t have to worry too much about space. It’s no wonder that so many ecommerce businesses want to avoid having to deal with having inventory clogging up their limited space!
If this is something that you’re dealing with right now, you should look into partnering with ecommerce warehousing (fulfillment center).
You may also like: Taking on the role of a warehouse, third-party fulfillment services offer a smart cost-effective solution in order fulfillment. You can check our order fulfillment, article for more information.
No More Packing Boxes!
Forget the space that your inventory might take up, and let’s talk about packaging materials. You may not expect it, but packaging materials can take up so much space.
Not to mention that if you hate packing boxes and running to the post office every day—a necessity for getting your products out on time to your waiting customers—working with a fulfillment center can save you time, energy, and money.
Why deal with your inventory and packaging when you can pay someone else to do it for you?
Not to mention that if you allow someone else to pack up your stuff for you, you can spend more time on the thing that matters for your business: making sure your product is the best it can be.
If you’re still not sure if switching to a fulfillment center is the best for you and your business, think of it this way. A sign that it’s time to use a fulfillment center is when you can no longer handle and keep up with your order volume.
Focus on What Matters
Although indeed, you’re not going to have much of a business if you don’t spend any time or attention on your shipping processes, you will also struggle to retain customers if that’s all you focus on.
If you find a way to automate your shipping services, you’ll be able to focus on what truly matters. Entrepreneurs and ecommerce store managers have an endless to-do list, so they must stay laser-focused on the tasks that only they can do and those that will help them scale and make money.
Focus on what you need to focus on as the boss and outsource the rest of your tasks to more capable people. Take the time that you were spending on order fulfillment and shipping shenanigans and instead use that time to focus on marketing, customer experience, and product management.
Be proactive in the areas of your business that need your focus and care!
Logiwa is the leading cloud WMS and order fulfillment software for B2C and direct-to-consumer business. Request a Demo and start to scale up your high-volume fulfillment operations.
How will I know if I’m working with a good fulfillment center?
At the end of the day, fulfillment centers are businesses, too. They live and die by the state of their reputation. This means that, so long as you can find records of them doing business—or if you can speak to someone who can vouch for their reputation—you’ll be in a good place.
What happens if I upgrade to a fulfillment center, but then it turns out I didn’t need to?
The only downside of looking into and chasing after a fulfillment center early is that it will increase the cost of your overhead. Having said that, you will still gain all the benefits of extra space, outsourcing your shipping, and not running the risk of accidentally missing an order.
Can I have a warehouse and a fulfillment center?
Sure! The only thing stopping you from having both is whether or not you need both. Few businesses do, but if your business is large enough that you need one place to store your inventory and another place to package it up for you, go right ahead!
It will also help if your warehouse staff and your fulfillment center staff can contact one another and work together.
Why do I need to understand that warehouses and fulfillment centers are different?
At the end of the day, you could probably get by without truly understanding the difference between warehouses and fulfillment centers.
Having said that, it’ll save you time, energy, and stress to know the differences so that you don’t end up spending time researching the wrong thing. If you make sure you know what you’re getting into from the get-go, you won’t potentially end up with a warehouse or a fulfillment center when you want the other!