Fulfillment & Warehousing Services: What’s the Difference?
Your business is at the stage where inventory management is necessary. But, what if you’re not sure what the difference is between a warehouse and a fulfillment center? Or, which is the smarter choice for your company? While the distinctions are significant, the two terms can sometimes be used interchangeably to refer to facilities designed to store goods until they are redistributed. The important questions are: what do you need from the facility? How will you utilize it, and what are your goals? It’s helpful to dig into the details to understand what distinguishes fulfillment services from basic warehousing, so you can make the right choice for your business.
Warehouse: What It Does, What It’s For
At its simplest, a warehouse is a large built space—often from 10,000 square feet to more than 1,000,000 square feet. It’s used to store product until it is moved to its next destination, which may be a retailer, wholesaler, or distribution center. There are different kinds of warehouses, based on the type of inventory they house. Six warehouse options include:
• Storage Facility – used to store goods for extended period of time
• Distribution Center – typically takes in products in large quantities and ships them back out in smaller quantities on a local basis
• Fulfillment Center – often operated by a third-party logistics provider (3PL), this kind of facility offers inventory management as well as many other operational functions, including order fulfillment, kitting, repackaging, customer service, and marketing strategies
• Automated – storage facility that operates largely through technologies such as robotics , designed to minimize human labor
• Climate-controlled – facility equipped to safely and adequately store refrigerated, frozen, and temperature-sensitive product
• High Compliance – facility designated to specific areas of compliance such as pharmaceuticals, high security etc.
• On-demand – Short term (often month-to-month) storage and inventory management
Basic warehousing provides space to store inventory. In that sense, a warehouse can be as rudimentary as a rented storage locker. Large commercial warehouses are B2B operations. Goods arrive at a warehouse on a pallet and leave the warehouse on a pallet or other carton. From there they travel on to a retail outlet, wholesaler, or other business. Warehouses accommodate both short and long-term storage, and are often used to store seasonal inventory and excess stock. Partially or fully automated, a warehouse will employ some method of inventory tracking.
The Scope of a Fulfillment Center
A fulfillment center is, in part, a warehouse, in that it manages storage and distribution. As the name suggests, however, a fulfillment center is also much more. At a fulfillment center, goods come in on a pallet and ship as a parcel. Services such as kitting group individual items together for shipment, as with a gift basket, marketing promotion, pharmaceutical starter kit, or other specialized order.
Fulfillment centers are busy hubs of activity, not only for supply chain logistics, but also for value added services including packaging and brand integration, printing, kitting, trade show support, and a broad spectrum of communication services. Fulfillment centers are typically B2C operations that concentrate on e-commerce, managing online orders and shipping directly to customers. Storage is generally short term, as the goal is to receive and fulfill orders as efficiently and expeditiously as possible. Technology plays an essential role across services, in harmony with a trained and dedicated team.
Fulfillment & Warehousing Serives, & Distribution Down the Line
So, then, all fulfillment centers are in some way warehouses, but not all warehouses are fulfillment centers. If you only need a facility to store overstock for several months, leasing warehouse space may meet your needs. If responsibilities such as order fulfillment, packaging, printing, and brand integration are overwhelming both your physical space and your workforce, a full-service fulfillment center can save you time, energy, and money. What’s more, fulfillment services are scalable, meaning your technology platform and services can expand and contract as needed.
Contact CCG Marketing Solutions to see how our 500,000 square foot facility and extensive menu of fulfillment services can support your goals.