It’s not unusual to hear someone refer to a warehouse as a fulfillment center, and vice versa. While both involve large buildings housing a variety of goods, they are in fact quite different animals. So, let’s take a look at the difference between a warehouse and a fulfillment center, and the services they provide, so that you’re able to choose which is right for you and the needs of your business.
What is a Warehouse?
When you think of a warehouse, your mind probably conjures up an image of a large space with shelves that reach to the ceiling, with forklifts occasionally bustling about to get at products or to move them around. That’s pretty accurate!
In a warehouse, goods are typically stored in bulk for an extended period of time, or until it is needed. For example, consider a company that produces Halloween masks. For 11 months out of the year, these items aren’t in demand, so the company stores them in a warehouse to save space within their own facilities. Operationally, a warehouse may see little activity from day to day, only coming to life when new inventory is added or transferred out.
Most warehouses serve wholesale retailers or B2B orders involving large quantities of products; they typically do not ship products to external customers or end-users. Aside from being a space-saver, these businesses save money; rather than purchase their own warehouse and hire staff to manage it, they rent space and share the costs with other businesses.
What is a Fulfillment Center?
A fulfillment center may look a lot like a warehouse and store goods for other companies, but that’s where the similarities end. Whereas warehouses store products for a long period of time, fulfillment centers typically store fast-moving products that are frequently being shipped out. The job of the fulfillment center is to get products to customers or end-users as quickly as possible.
Fulfillment services work with retailers, e-commerce companies, corporations, and others to fulfill both B2B and B2C orders, shipping goods to end-users. For example, when you order a new pair of shoes online, they are probably going to be shipped from a fulfillment center rather than from a warehouse. Of course, a big shoe retailer may store extra pairs in a warehouse, and then ship shoes from the warehouse to a fulfillment center every couple of months.
Unlike the mostly static atmosphere of a warehouse, fulfillment centers are a hotbed of activity! People work, often around the clock, processing, packing, labeling, and shipping orders to customers. There’s also incoming inventory to deal with and managing customer returns. To ensure a smooth process, good fulfillment centers are outfitted with the best technology for processing orders, managing inventory, organizing transportation, and more.
It’s important to note that fulfillment centers can also double as warehouses; however, warehouses do not act as fulfillment centers.
Warehouse vs. Fulfillment Centers: Making Your Decision
So, the question remains, which is right for your business – a warehouse or a fulfillment center? If you’re a big operation and need to store a large number of products for any length of time before shipping out to another business, a warehouse is a good, cost-effective option.
On the other hand, if you’re a small to mid-size operation and you’re finding yourself spending too much time packing up boxes and shipping out orders, outsourcing order fulfillment through a fulfillment center can really ease the burden!
Another thought: If you’re running out of storage space (or garage space, as this is often the case for home businesses) a warehouse might be an option; but, if you move product with relative frequency, a fulfillment center is probably the better choice as it can house your goods and offer packing and shipping services.
With a full, specialized staff of fulfillment experts, a fulfillment center can also typically get your product into the hands of your customers quicker, and with better packing and presentation to improve the customer experience and help ensure future order placements.
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