Home Insights & Advice Order fulfillment center and warehouse: What’s the difference?

Order fulfillment center and warehouse: What’s the difference?

by John Saunders
15th Jun 21 10:45 am

As an e-commerce business owner, you’ve probably come across such concepts as fulfillment centers and warehouses. Let’s see what the difference between them is and how using them can help take your business to the next level.

What is a 3PL fulfillment center and how does it differ from a warehouse?

At first it may seem that fulfilment centers and warehouses are identical in their functions and purposes.

But after taking a closer look, it becomes clear that the similarity lies only in the fact that the warehouse and the center are premises in which companies can store stocks of their products.

3PL fulfillment center is the center of all logistics processes required for high-quality and fast delivery of goods to the customer. Such a center accepts a wide variety of inventory for storage – kitchen utensils, building materials, medicines, jewelry, etc. Such third-party logistics would be an excellent option for a B2C business, since the focus of the fulfillment center is aimed at a fast and high-quality order fulfillment process.

Fulfillment warehouses are large production or storage facilities that allow sellers to store large quantities of wholesale products for an unlimited period of time. Most often B2B (business to business) clients need such solutions. Wholesale B2B orders have their own characteristics and the stages of their implementation are somewhat different from B2C.

Order fulfillment center: what is it and how does it work?

An outsourcing distribution center undertakes the full implementation of all fulfillment tasks of your company. Now you do not need to independently deliver orders to customers and worry about where to place a large amount of goods.

Of course, some e-commerce owners outsource only a part of their tasks, but this does not mean that an order fulfillment center will not be able to handle the entire list with high quality. The scale of such organizations makes it possible to take control of such processes as:

  • distribution, management and order fulfillment;
  • quality control of goods;
  • product labeling;
  • equipment;
  • customer service;
  • delivery of goods;
  • receiving payment;
  • work with documents;
  • return acceptance;
  • inventory management.

3PL fulfillment begins with the receipt of goods at the fulfillment center. Store stocks are accepted, checked against the invoice, then sorted and sent to designated storage locations. Periodically, the order fulfillment operator conducts an inventory of items, and since some types of goods imply a quick sale, ideally the cargo should not stay on the shelves for more than 30 days. Long-term storage of some goods (for example, flowers or fruits) will not be possible.

It is also worth remembering that the placement of products in the warehouses of the center is not free, and it is better to fill the area with the goods that are in demand, otherwise you will have to overpay for storage.

When a customer places an order on the website of an online store, the process of assembling and packaging begins. After that, customer orders are packed according to your requirements. Many fulfillment centers offer their own options for packaging boxes with the ability to put your trademark on them. Next, the delivery of the order itself. This part of the logistics includes the execution of all the nuances of transportation. With fulfillment, the supply chain will become a smooth and orderly process that rarely fails. You can be sure that customer orders will be delivered on time, and if any problems arise, the fulfillment center will take care of them.

Long-term and short-term storage

Despite the fact that an order fulfillment center, like a warehouse, allows you to store a large number of products in an organized manner, it does not provide you with long-term storage of goods. The task of the fulfillment center is the quick implementation of the incoming cargo (up to 1 month).

Warehouses, on the other hand, will provide you with storage space for a long period (from 6 months to 1 year).

Benefits of using fulfillment centers

Ecommerce requires the entrepreneur to be fully engaged and to fulfill a long list of tasks. And if at the beginning of the journey you can cope with everything on your own, scaling a business requires a systematic approach. Supply chain management and high-quality transportation of goods are not the easiest tasks, because by missing a few details, the quality of service can become uncompetitive. By delegating most of the affairs to the order fulfillment center, you deprive yourself of such risks and free up your time for more important business processes.

Outsourcing warehouse tasks guarantees:

  • debugged workflows without your participation;
  • saving money on the maintenance of the warehouse and working personnel;
  • fast speed and low cost of delivery of orders;
  • regular reports on product inventories, etc.

Such advantages of 3PL centers will help to reduce logistics costs, increase your efficiency and significantly improve e-commerce execution.

If your business is ready to scale and you are looking for the support of a reliable 3PL operator, Dropex is definitely your best choice! Our company will provide high-quality execution of complex operations, minimal costs and satisfied customers. Write to Dropex managers to learn about the terms of cooperation, prices and additional services of the company.

https://dropex.net/en/ – Order fulfillment Service & Center.

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