What is a Fulfillment Center vs. a Warehouse?

What is a fulfillment center?

Fulfillment centers are also known as third-party logistics companies (3PLs). They offer an excellent opportunity to expand your business’s fulfillment capabilities. There are many moving parts when running an e-commerce platform. If purchases take too long to process or if shipments are delayed, your business could be negatively affected. Rather than limiting your inventory to prevent backups, outsourcing your supply chain might be a great option for you. A fulfillment center can manage your store’s inventory and handle all of the order processing and shipping for you.

How do fulfillment centers work?

Once your customer places an order, the fulfillment center will receive the order. They already have your inventory in storage, so they will gather the purchased items and package them. The order is then handed over to a shipping carrier to prepare it for shipping and then get the order delivered to your customer. A fulfillment center is designed to get orders filled quickly and in a cost-efficient manner.

What is a fulfillment warehouse?

A fulfillment warehouse is a long-term storage solution used to store your inventory for more extended periods of time. In many cases, this option is for bulk items. Many of the products in an inventory warehouse will be moved by a forklift. Several pallets will be stacked high with large quantities of similar products.

What are the primary differences between warehousing and fulfillment centers?

·      A warehouse’s primary function is to store inventory.

·      The fulfillment center is a better option when the goal is to turn inventory over quickly.

·      A fulfillment center’s operations are a bit more complex with a lot of movement, where warehouse operations are a bit more static.

·      Fulfillment centers have daily pickups from shipping carriers. A warehouse will have less frequent scheduled pickups.

·      Next-day shipping or same-day can be guaranteed by a fulfillment center.

How to determine the difference between long-term and short-term storage.

When it comes to inventory, there are a couple of storage options to consider. A fulfillment center is designed to get inventory out quickly. Items should not sit in a fulfillment center for more than 30 days or you could end up incurring high warehouse fees. A warehouse is where items will be stored for longer periods of time. Ideally, to maximize efficiencies, your store inventory should be placed in fulfillment centers located near your customers to reduce shipping costs and time in transit.

What are the benefits of using a fulfillment center?

The benefit of using a fulfillment center rather than directly managing your own inventory is that your business will experience greater efficiencies. You will no longer have to deal with the management of storing and shipping your inventory, as well as the time it takes to process any returns. Other benefits include:

·      No need to find your own warehouse space.

·      Discounted shipping rates.

·      Two-day and overnight delivery options.

·      Improved inventory management.

·      Additional time to focus on your business needs.

Conclusion

The success of your business greatly depends on customer service, and in a fast-paced world where getting quality products quickly has become the norm, your fulfillment process needs to be flawless. As a business owner, you want to focus on your products and the changing needs of your customer base. Outsourcing your order fulfillment process to a 3PL provider can streamline your business and allow you to focus on what matters most, growing your business.

Want a personalized consultation to discover what 3PL solutions can do for your business? Contact PFS today!