Warehousing is an integral part of every company’s distribution network. This is especially significant if a company is in the eCommerce industry.
For your supply chain to run well, you must choose the right type of warehousing based on your operating demands. Fulfillment centers and distribution centers are two sorts of storage solutions with particular order fulfillment techniques.
Successful eCommerce businesses can streamline their supply chains by selecting suitable distribution and fulfillment facilities based on their operational requirements. It’s crucial to remember that both are part of the supply chain and should be considered when planning operations.
This blog delves into the operations and purposes of fulfillment and distribution centers so you can pick the right one for your company.
What is a Fulfillment Center and How Does it Work?
A fulfillment center is a warehouse run by a third-party logistics provider that receives, processes, and fulfills customers’ orders on your behalf. You can receive and inspect items before sending them to the fulfillment center or have the manufacturer send them directly to the center to manage the inventories of a fulfillment center.
Fulfillment centers are an essential aspect of the supply chain since they ensure that online orders are delivered faster and at a lower cost to customers. They assist you in strategically storing your products, guaranteeing that orders are picked up swiftly once a buyer completes an online transaction.
A fulfillment center performs a variety of functions and keeps inventory for businesses. A fulfillment center holds goods for a limited time before shipping them out to customers. To fulfill B2C and B2B orders, these centers collaborate with eCommerce companies, merchants, corporations, and other businesses.
Customers who make purchases are guaranteed to receive their products on time, thanks to the efficient functioning of the fulfillment centers. Fulfillment services’ primary goal is to get products to customers as quickly as possible. As a result, inventory in fulfillment centers does not get stored for as long as it does in warehouses.
Fulfillment centers, rather than warehouses, are frequently used to transport retail orders. You can keep your excess inventory in a warehouse. You can, however, relocate a portion of your inventory from the warehouse to a fulfillment center, which will convey orders to clients as promptly as feasible.
Fulfillment centers are frequently a hive of activities, with employees working 24 hours a day to process, pack, and ship orders to clients. They also receive inventory shipments and have employees gather products, pack boxes, label customer orders, ship out completed orders, and handle returns.
Benefits of a Fulfillment Center
When you receive a new order, a fulfillment center follows a procedure to process it and deliver the products to your consumer.
Close to Customers
A fulfillment center is usually strategically positioned near your consumers. The goal is to shorten the distance between your customer and your warehouse to make shipping more efficient.
Pickup & Packaging on Your Behalf
Your inventory is handled and maintained by skilled fulfillment specialists who can help you pick products, pack shipments, and label them.
Automation & Technology
Technology offers transparency at every step of the order fulfillment process, whether it’s a warehouse management system, an order management system, or automated shipping.
What is a Distribution Center and What Does it Do?
A distribution center functions similarly to a warehouse. It does, however, appear at a point in the supply chain other than the fulfillment facility. In its most basic sense, a distribution center is any warehouse along the way that permits product redistribution.
The main distinction between a fulfillment center and a distribution center is that a distribution center does not ship directly to clients. Instead, it functions as a stopover place for goods transferring from one mode of transportation to another.
Large merchants can use distribution centers as inventory hubs to ensure that products are refreshed rapidly on the shelves and that there are no shortages—this aids in keeping the supply chain as proactive as possible.
Distribution facilities are an essential part of the distribution chain before products, order fulfillment, and manufactured goods are shipped to wholesale or retail clients. They act as a link between vendors and their clients.
They’re customer-focused, providing direct service to retail stores. For example, if you order a product from Walmart online and opt to pick it up in-store, your order will be delivered to the nearest center. Typically, suppliers ship products to these distribution centers, which serve specific retail locations.
These centers are an essential component of the order process, and maintaining them can be difficult due to the large number of products they hold. These centers frequently employ cutting-edge technology to ensure order processing efficiency. Warehouse management systems (WMS) and transport management systems (TMS) are also available in some centers.
Advantages of a Distribution Center
High-capacity Storage and Delivery
Large volumes of products are stored and redistributed in distribution facilities. There’s plenty of room to store enormous amounts of your store’s products.
You have the option of storing your goods for a long time without burning a hole in your pocket.
Distribution centers are often less expensive than fulfillment centers, not simply for long-term storage but also because of economies of scale and lower technological needs.
Close to the Target Market
With a distribution center, you can keep more products closer to your target market. If you’re a multi-channel retailer, you might as well keep goods near your physical location.
Difference between a Fulfillment Center and a Distribution Center
Pros and Cons of Fulfillment Center and Distribution Center
- Goods are delivered directly to the buyers
- Close to customers for faster shipments
- Store merchandise received and handled by trained staff
- Can pick and box your items for you
- Usually provides kitting services
- Shipments are typically labeled, and bespoke packing may be available
- Returns are managed, and reverse logistics services are provided
- You can focus on your business’s growth by outsourcing center fulfillment functions
- Every step of the fulfillment process, as well as the entire supply chain, is transparent thanks to automation
- You can use the customer service division of some centers
- There is always a limited amount of storage space available
- Only keeps things for a limited time
- Doesn’t send vast quantities of products in bulk
- Unsold inventory is frequently more expensive to store
- Due to their location and value-added services, they are more costly than distribution centers
- Delivers vast amounts of products from one business to another
- Has enough warehouse space to keep significant volumes of your store inventory at once
- Can store products for long periods at low prices
- This enables you to place more merchandise closer to your target market
- When compared to fulfillment centers, it is generally less expensive
- It’s best for products that don’t need to be finished or packaged individually
- Because they typically ship goods in bulk, they dispatch orders less frequently
- Goods are delivered on pallets and hence not packed at the distribution facility
- Because the facilities are positioned further away from the target markets, shipments often take longer
- You’ll be able to communicate with your customers less directly
- When opposed to a fulfillment facility, there are fewer services accessible
Outsourcing your fulfillment services is a good decision for any business as it cuts out the manual calculation and data entry and hence, an organized and properly managed facility.
How can Pickrr Help You?
Pickrr is a SaaS-based end-to-end logistics service that automates the shipping process from seller to buyer. It enables you to deliver your items across India efficiently. We integrate all of your logistical operations on one platform, thanks to AI and machine learning technologies.
Our Pickrr Plus Fulfillment Solutions are meant to assist businesses seeking fulfillment services across India. It can help your company in the following ways:
- Same-day and next-day delivery is available
- No upfront costs associated with managing warehouses
- Storage and handling you can rely on
- Return packages that are simple and quick
- Order fulfillment updates using AI technology
- Discounts on shipping expenses
- Integration of eCommerce companies with warehouse logistics solutions that is simple and trouble-free
Are you looking for a warehouse fulfillment service for your company? Sign up with Pickrr to connect with specialists and begin managing your inventory safely and securely.