The eCommerce industry is continuously evolving and making advancements. Every other startup is venturing into the eCommerce world, acknowledging its multitudinous benefits. There are plenty of things that need to be adhered to in order to steer through success. One of the essential formulas of success is an adequate warehousing facility. Every eCommerce business indeed needs a warehouse to store, manage, and handle the products. Hence, it is essential to think about warehousing facilities.
With the emergence of Amazon Fulfilment, most eCommerce traders are looking for reliable warehousing and fulfillment services. Both warehouse and fulfillment centers are used conjointly but have significant differences. While the warehouse is a place where goods are stored for an extended period until it is shipped, a fulfillment center has multiple purposes. It can be used as a warehouse to store products and fulfill orders for the customers. It is essential to choose the right type of service that suits best with your business. In this article, you will learn more about the differences between both of the services.
Without further ado, let’s dig in.
Warehouse and Fulfilment Services: The Need of The Hour
When it comes to logistics and supply chain management, warehouse and fulfillment centers are used interchangeably. It depends on different scenarios of how these two are used. In general, both are large buildings that are used to store and manage products. Typically, warehouse and fulfillment centers are used by eCommerce sites that have to deliver products to the customers. Irrespective of the similarities both the services have, some significant changes set them apart.
Warehouse: A Cost-Effective Storage Option
One of the ideal reasons why a warehouse service is still a popular option is because of its affordability. This large building comprises containers, shelves, bins, and packets to store different goods for a more extended period of time. The businesses that generally collaborate with warehouses are generally B2B or wholesale businesses. Renting a warehouse is much more cost-efficient than any other service. It depends on the location that determines the cost efficiency of renting a warehouse. It is an affordable option for small sellers who cannot afford an in-house fulfillment.
Fulfilment Center and How Does It Work?
A fulfillment center is primarily meant for 3PL (third party logistics). They use a fulfillment center to fulfill the orders of their customers. Amazon Fulfilment Service is the best example of a fulfillment center. A typical fulfillment center can either be owned or rented depending upon the business requirement. There are plenty of factors that go into managing the fulfillment center to its optimality. It is basically the hub for all the logistic processes of the seller. The third-party seller conducts the order fulfillment process in these centers through efficient management, packaging, and shipping.
Significant Differences Between Warehouses and Fulfilment Centers?
Though both warehouse and fulfillment services are used interchangeably, there are significant differences between both. One of the major differences is in the role played by both the services in getting the products to the customers. While a warehouse simply stores the inventory for business from where other service providers take over the fulfillment services, a fulfillment center will look after all the processes and enhance the customer experience.
A fulfillment center makes the task easier for the business by handling the order fulfillment process. Generally, these fulfillment centers are located at different locations that makes it easy to ship the product to the customers. Let’s take a look at some key differences between both with regards to some parameters-:
- Storage Term: While the warehouse can store the inventory for a more extended period of time, a fulfillment center can only hold the stock for 30 days.
- Facility Operations: Compared to fulfillment centers, warehouses are relatively inactive as they only store the inventory. A fulfillment center looks after plenty of operations like receiving inventory, packing the products, preparing for shipping, order shipping, etc.
- Shipping Cost:A fulfillment center marginally reduced the cost of packing and shipping for the company, as the fulfillment center handles everything. A warehouse doesn’t look after the shipping process; it only stores and manages the inventory until it is taken over by the shipping company.
In a nutshell, both warehouses and fulfillment centers are poles apart. It depends on distinctive business requirements to choose a particular service.
The Bottom Line
Whether it is to manage an eCommerce business or just storing the inventory of your business, it is essential to seek the services of a warehouse or fulfillment center. Today, we have the more refined option of fulfillment centers that works similarly to the warehouse but has some additional capabilities. It is essential to choose the ideal service that can best adhere to your business requirements. The above mentioned were some of the necessary information about warehouse and fulfillment centers that will help you make a better decision.