While the terms fulfillment and warehouse are often used in conjunction to refer to the same thing, the two can mean totally different things. While both are often large buildings that are used to hold inventory for companies, the uses and services offered at each can differ a lot.
If you’ve been thinking about using a fulfillment service or warehouse service, it may do you some good to know the key differences between the two.
What Is A Fulfillment Center?
A fulfillment center is a physical location where a 3PL logistics provider (fulfillment provider) fulfills customers orders for ecommerce retailers. The reason fulfillment centers exist is to help companies deliver orders to customers accurately and quickly to help relieve pressure from a growing business.
How Do Fulfillment Services Work?
Fulfillment centers can differ in the services that are offered, but ultimately, they work to get online orders to your customer’s doorstep. This process is often called the order fulfillment process. The company’s inventory is strategically stored in a 3PL fulfillment center to fulfill company orders.
Fulfillment centers have the ability to fulfill a large amount of products at once, on a regular basis too. Fulfillment centers can process orders for both (B2B) and (B2C).
When a business owner chooses to outsource their fulfillment,
What Does Warehousing Do?
A warehousing solution is going to refer to a company that stores inventory (products) for an extended period of time. A warehouse is a large storage center used to store bulk product.
Most warehousing providers work with wholesalers and B2B orders in large quantity. Some warehousing services rent out space while other retailers may have their own warehouses.
In some cases, leasing warehouse space can be more cost-effective versus buying warehouse space for your business.
Small ecommerce sellers usually hold product at home or rent from storage units and lockers.
Differences Between Fulfillment Centers And Warehousing
There’s several differences between warehouses and fulfillment centers.
Short-Term Storage VS Long-Term Storage
While warehousing is used in a 3PL’s fulfillment center, such as storing merchant inventory in strategic locations, the main focus for a fulfillment center is to turn inventory over quickly.
Companies usually don’t want sitting inventory as it’s costing the company money. If product is stored for more than a month, a business may be responsible for warehousing fees. Even so, sellers do need to make sure they’re sending enough inventory to fulfill orders for customers.
Understanding the roles of warehousing and fulfillment centers identifies a clear difference. The role of a warehouse is to store products, the role of a fulfillment center is to efficiently meet customer expectations around shipping. This is made possible when retailers store inventory in fulfillment centers that are located near customers. In some cases, companies will split inventory among fulfillment centers.
Services And Operations
Unlike warehouses, fulfillment centers can handle a number of different operations and services. 3PL providers offer a number of different order fulfillment services for customers, such as;
- Order Management
- Returns Management
- Value Added Services
- Customer Services
- Real-Time Order Data And Analytics
- Subscription Box Fulfillment Services
- Shipping Orders
As for the operations in warehouses, it’s mainly centered around receiving inventory and shipping it.
Pickups By Shipping Carriers
Most fulfillment centers have partnerships with a number if different shipping carriers. Due to the fact that fulfillment centers want to ship out products as soon as possible, they need shipping carriers to pick up orders daily.
It all depends on the shipping options the fulfillment center provides to customers. If they’re doing same-day shipping or guaranteed shipping, they may have shipping carriers picking up orders multiple times a day.
The pickups for a warehouse are far less than that of a fulfillment center. Freight shipping is usually more cost-effective, so they can transport pallets as needed.
Benefits Of Using A Fulfillment Center
There’s a number of reasons a 3PL fulfillment center can benefit your company.
(1) Automating Fulfillment
Fulfillment centers that are equipped with the latest technology can help your company automate the fulfillment process. Every step of the fulfillment process is documented and tracked in real-time. This makes inventory management simple and allows you to focus on more important things, like growing business and customers.
(2) Fulfillment Integrations
Another important benefit is the ecommerce integrations for your ecommerce inventory fulfillment. Here at Thill, our order management software integrates with the top ecommerce platforms, such as;
- Shopify Fulfillment
- Ebay Fulfillment
- Amazon Fulfillment
- Magento Fulfillment
- WooCommerce Fulfillment
- KickStarter Fulfillment
(3) Fulfillment Expertise
The lifeblood of any ecommerce business is its order fulfillment process. You need your orders to come in, be accurate, shipped accurate and shipped out quickly. Here at Thill, we’ve been doing fulfillment for 50+ years. Logistics can be a challenge and it’s complex, allowing the experts to handle your fulfillment can be extremely efficient and profitable for your company.
The right strategic partner can be a huge asset to your business.
Furthermore, industry experience matters, you should work with a fulfillment center that has experience in your specific niche. While it’s not mandatory, that experience goes a long way.
(4) Stop Storing Inventory
Another benefit to hiring a 3PL fulfillment company is the opportunity to eliminate storing inventory, boxes and materials. Leasing space may not be an option for your business. Plus, if you’re tired of packing boxes and shipping them out every day, outsourcing your fulfillment makes sense.
Inventory storage is expensive – if you partner with a 3PL fulfillment center, that is another area you’re going to save money in.
Efficiency is key to running a successful business and if you want to keep customers happy, using an experienced fulfillment center can be the answer. It can allow you to eliminate errors in fulfillment, improve your efficiency and lower your shipping times to customers.
Overall, there’s many benefits for using a fulfillment center vs a warehouse vs doing it all yourself.
(6) Product Returns
Product returns are another big benefit having a fulfillment center doing your fulfillment.
Some of our clients sell hundreds of thousands of products a month. As you can imagine, they do see a fair amount of product returns with that much sales volume.
If you’re doing big volume,. you already know how important returns management is to your business.
With a fulfillment partner, product returns are off your shoulders, allowing you to focus on more important items in your business.
You want the best results for your company – period.
Everything listed above is extremely important, but end results matter the most.
How can a fulfillment center or warehouse get products to our customers faster?
How much money can a fulfillment center or warehouse save us?
What would it mean to your bottom line to outsource fulfillment?
We’d love to show you everything we offer here at Thill Inc. Between our award-winning team, state-of-the-art software, and 50+ years experience, we’re one of the top fulfillment and warehousing teams in the world.
You can contact us online through this link or you can reach us directly by calling 1-920-967-9201.