Warehouse vs Fulfillment Centers – What’s the Difference?

By May 13, 2022 No Comments

The terms warehouse and fulfillment center are sometimes used interchangeably, yet they serve distinct purposes. They are enormous structures that house commercial inventories. Their features and services, however, are vastly different.

Depending on the demands of the company, each offers different services. This article delves into the roles of both the fulfillment center and the warehouse in order to help you determine which is best for your eCommerce company.

What is a Warehouse?

A warehouse for a company is often a big storage space or area built for the long-term storage of vast quantities of items. An average warehouse will include a range of equipment, including lengthy rows of shelves and stacking bays, forklifts, containers of various sizes, and large bundles of items.

The essential tasks that occur in a warehouse regularly are pretty basic. Inventory is brought into the warehouse, moved about to create room for additional parcels, and then picked up when it’s time to ship. Firms may build their warehouses or rent warehousing space from other businesses.

What is a Fulfillment Center?

A fulfillment center is a section of the supply chain that acts as a hub for all logistical operations involved in getting a product from the seller to the buyer. It is responsible for the entire order fulfillment process, from order selection and processing through packing and delivery.

For internet merchants wishing to simplify their operations, the fulfillment center is used by a third-party logistics (3PL) provider to accept, process, and fulfill consumer orders. A fulfillment center exists to ensure that online purchases are delivered on time and relieve ecommerce enterprises of the burden of handling this critical but complex operation.

Warehouse vs. Fulfillment Center: What’s the Difference?

A warehouse is a fulfillment center, but a fulfillment center is not a warehouse. Most notable is the scope of activities carried out therein and the types of consumers meant to be served.

  • Customers

Warehouses primarily serve B2B clients. Individual clients do not get modest amounts of merchandise. On the other hand, fulfillment centers send items to B2B and B2C customers. They’re made to let merchants and e-commerce enterprises fulfill direct-to-customer purchases.

  • Operations

It’s important to note that warehouses and fulfillment centers operate differently. Warehouses are often slower-moving settings where the product is collected and distributed in bulk with few additional services.

A fulfillment center is a significantly faster-paced setting where the product is received, inspected for quality, stored, selected, packaged, and sent out to clients. As you may expect, all of these services need a larger workforce and a greater inventory throughput.

  • Storage

In addition to being utilized for long-term storage, warehouses do not necessarily provide rapid access to the material they contain. Warehouses are often utilized to store excess inventory or seasonal items.

On the other hand, Fulfillment centers are utilized for short-term storage because the goal is to keep products flowing in and out. Stock that is kept for an extended period costs more and typically indicates a problem with the ordering and fulfillment processes.

  • Shipping

We’ve already mentioned it, but there is a considerable difference in the frequency and amount of shipment that takes place between a fulfillment center and a warehouse, as we’ve discussed before.

Large bulk orders may be delivered to a warehouse every month by truck or rail. This great product may languish in the warehouse for months before being sent to a physical shop or distributed to fulfillment centers in smaller batches.

Meanwhile, fulfillment centers acquire merchandise on a weekly, if not daily, basis, with couriers and other shipping companies arriving throughout the day to deliver finished orders to clients.

Warehouse vs. Fulfillment Center: Which One is Right for You?

Before making this selection, consider your storage and shipping requirements, whether you’re a small or medium-sized company or shop. Furthermore, depending on your facilities, you may run out of storage space, mainly if you conduct your company out of your home. 

Storage units may be a cost-effective and efficient alternative if you need additional room to keep your items. Warehouse management services may make sense as your company grows and you need more space, but in today’s age of internet buying, a fulfillment center offers much more versatility. It can handle several duties in one location.

The Bottom Line

If your business sells ecommerce items, you’ll need a location to store them. When deciding whether to employ a warehouse or a distribution center, it’s essential to consider the kind of items you sell and how long they’ll be stored there.

Warehouses are built for long-term storage and are geared for effective packing in a bit of amount of area. Because distribution centers are built for speedy input and output, commodities must be turned around quickly and seamlessly.