Fulfillment center and warehouse — What is the difference?

1. What is an ecommerce fulfillment center (fulfillment centre)? — Definition, purpose

Fulfillment center, also called 3PL, is a massive structure, much bigger than a normal storehouse, and is utilized for numerous purposes aside from storing the goods. In fact, warehousing is merely a small part of what a fulfillment house is capable of doing.

Fulfillment companies suggest a wide spectrum of assistance, namely acquiring of wares from suppliers or manufacturers, inventory supervision, picking, packing and transporting of merchandise. A good few provide kitting and assembling solutions, a certain amount will even run a help-line and operate returns. Fulfillment center automates the whole fulfillment procedure thanks to its integrated software and makes two-day deliveries attainable.

Quite a few 3PLs are operating numerous fulfillment centers simultaneously, enabling ecommerce enterprises to split stock between them for speedier transportation. Fulfillment company generally specializes in B2C, but also assists B2B.

The prime objective of the fulfillment center is to achieve a quick turnover of goods, that is why it is not very suitable for long term storage. In fact, the fees for storage of goods that are not sold for too long will be upscaled. So generally speaking, a fulfillment center besides warehousing runs the complete procedure of bringing goods from the storehouse straight to the house of the purchaser as rapidly as possible.

2. What is a fulfillment warehouse? How it operates?

A storehouse is commonly a substantial construction utilized for long term inventory retention by numerous establishments, including ecommerce dealers. It is a good substitute for in-house storage of goods, and renting one is more economical than purchasing. It could be put to use besides fulfillment centers for keeping excessive goods or in case of seasonal wares. Storehouses mainly focus on sizable bulk orders and are preferred in case of B2B. Since the storehouse manages mostly sizable orders, freights are not very rapid and need to be arranged.

3. Difference between fulfillment center and warehouse

The main purpose of a storehouse is just to retain wares. Fulfillment center on the contrary is employed for outsourcing of the whole fulfillment procedure. Whilst a storehouse is an essential element of a fulfillment center. That is the principal distinction.

The second crucial contrast is storage time. Goods better not stay in the fulfillment center for a lengthy timespan, otherwise the fees will be significantly increased. Contrastingly, a storehouse is generally used for long term storage, and prices will stay constant even for indefinite time.

Not many activities happen in a storehouse: items are brought there, stay there for a timespan, and then they are brought out. That's it—pretty much steady. On the contrary, the fulfillment center is continually bursting with various activities: wares are acquired, placed on chefs, wares picked and packed, carries are constantly in and out.

Another distinction is regularity of pickups by transportation providers. In the case of a storehouse, it is more economical to gather a large amount of orders and to send them all at once. So pick-ups are infrequent and shipments sluggish. Fulfillment center on the contrary focuses on exceptionally quick shipments — orders are processed and transported right after they are placed. Numerous carriers come to collect packages at least daily.

4. How to make the right choice for your enterprise?

The question of who is the winner in warehouse vs fulfillment centers battle can be plainly answered if we inspect the preferences and requirements of business itself.

Storehouses are a good choice for someone who requires a long term storage or needs to support B2B or wholesale. Although the storehouse does not move wares fast, it is mostly cheaper than the fulfillment center, and you won't be charged extra fees for items that sit in stock for too long.

But in case you support B2C and require an end-to-end solution that not only solves the storage problem but also gets wares to purchasers rapidly and with no complications, then the fulfillment center is right for you. Fulfillment center is more comparable to a reliable business helper than just a storage location. It will run the entire order fulfillment procedure, saving you a lot of time. Meanwhile, you can use this additional time to further develop your company and generate more profit. That alone makes up for a higher price. Only make sure to liquidate or move to another place of goods that do not sell for a long time—for these wares fulfillment companies raise fees.

Taking everything into consideration, both fulfillment center and warehouse possess unique strengths, and you can use which fits the best or even in some cases them both.