What’s the Difference Between a Fulfillment Center and a Warehouse?

A warehouse and fulfillment center may seem like the same thing, especially given that they are both huge facilities that house inventory and goods for businesses. However, they have different purposes and serve different functions.

Warehouses provide storage for businesses that require long-term housing for bulk inventory in huge quantities. Warehouses are often adapted for the kinds of products that they are storing. For example, there are cold warehouses for storing sensitive or perishable items at very low temperatures. There are also smart warehouses that use automation and interconnected technologies to manage incoming and outgoing products.

Warehouses see a high velocity of products that flow through them. A fulfillment center, on the other hand, are part of the supply chain. A fulfillment center acts as a hub for logistics procedures that need to deliver a product from the seller to the buyer. It manages the whole order fulfillment process from picking and packaging to shipping, ensuring customers receive their purchases on time. Let’s take a look at fulfillment centers vs. warehouses to further understand the differences between the two.

A Warehouse is a Better Option for Long-Term Storage

Both warehouses and fulfillment centers provide storage options for businesses, but warehouses are preferred when it comes to long-term storage. Although fulfillment centers help reduce shipping costs and transit time by storing goods near the end customer, businesses may be forced to pay expensive storage fees. Goods that remain at the fulfillment center for more than a month may also be subject to higher storage fees that are not ideal for the business. Moreover, the primary purpose of the fulfillment center is to process and deliver goods swiftly to customers, not to provide long-term storage.

Renting a warehouse is a more cost-effective solution for long-term storage. Merchants can choose to rent a smaller and less expensive space that provides cost savings in the long run.

A Fulfillment Center Does More Than Store Products

A warehouse is generally inactive since it is used to store merchandise. It is generally silent, except for when products are added or exchanged. An order fulfillment center, on the other hand, is always bustling with activity. The following are some of the everyday fulfillment services:

• Kitting and assembly of items
• Packing
• Shipment labeling
• Handling of returns
• Receiving inventory

Fulfillment Centers Experience a Higher Level of Pickups by Shipping Carriers

Given that consumer purchases must be filled fast, a fulfillment center like Alpacka frequently has relationships with many delivery providers. To ensure prompt delivery, shipping carriers will visit at least once every day to pick up packages. The pickup frequency can be increased as needed, which is especially useful for same-day or next-day deliveries. As a result, there is rarely a calm period in fulfillment centers. Fulfillment centers are more customer-centric and offer more services than a warehouse, so there is higher human traffic at a fulfillment center.

Some fulfillment service providers even have multiple fulfillment centers, allowing them to serve different geographic locations more quickly than if they were to have just one. This creates a scalable way for ecommerce companies to deliver fast and affordable shipping to a diverse customer base. As a customer, you can rely on the convenience brought about by these fulfillment centers to bring your products quickly to your customers. This also increases reliability since your products can reach your customers faster.

There are fewer pickups at warehouses as it is more cost-effective to ship in bulk. Freight companies prefer to schedule a pickup time which could cause delays in shipping due to the lack of flexibility. Merchants need to plan for a longer turnaround time from preparation to pick up.

Different Fulfilment Companies Offer Different Terms

Some companies offer a 100% order accuracy rate, guaranteeing and ensuring your customers get exactly what they purchased. This cuts down on mistakes and confusion and increases reliability. If your company structure is based on repeated orders through subscriptions, some fulfillment companies even offer subscription box fulfillment to make subscription boxes easier to sell and distribute. This allows you to automate your business processes and make end-to-end customer experiences much cleaner and more efficient. Other fulfillment companies may offer return management services for helping customers return unwanted products, or if they want to make an exchange. These services may come at an extra fee or they may be part of a package offered at the point of sale.

You Can Outsource Inventory Storage and Management to a Fulfillment Center

Managing a warehouse can be time-consuming and costly for small to medium-sized businesses. Hiring a fulfillment center to take care of inventory storage and management makes sense from a holistic business perspective. In terms of support, fulfillment centers definitely provide you with a more comprehensive range of services so you can focus on expanding your business while leaving the logistics to them. Fulfillment centers can keep track of incoming orders, ship them out to customers in time, and notify you when stock levels are low. Merchants benefit from having more time to focus on other essential aspects of their business. Alpacka has the perfect logistics solutions for your business needs. We are established in this industry and work closely with our clients to find a plan that best suits their needs. Contact us today to find out more about our order fulfillment services!