Fulfillment Centers vs Warehouses: What’s the Difference?

Are you trying to decide whether to use fulfillment centers or warehouses? Read more to learn some key differences between the two today!

Is it something like the last shot in Indiana Jones: Raiders of the Lost Ark with the ark buried deep in piles of other crates? If so, you’re on the right track.

Both fulfillment centers and warehouses can look just like that – rows and rows and stacks upon stacks of goods, crates, product, and more. But that simple image is actually where the similarities end.

The short of it is that fulfillment centers can act as warehouses, but warehouses aren’t fulfillment centers (or at least they don’t perform the same duties). Read on, and we’ll dive into some of the more detailed differences between these two.

All About Warehouses

Warehouses pretty much say what they are in the name. They house wares.

Warehouses are large buildings that can store lots and lots of goods and products for an indefinite amount of time. It’s sort of like having personal storage units for businesses. Companies use these buildings to store large quantities of product in bulk until they need to take them out.

A good example is if your company carries a seasonal product. You only need that product to sell one time out of the year, so where do you put it the rest of the time?

A warehouse allows a company to keep its product safe and sound until the company needs it back. In some cases, companies share warehouse space with each other and it can even be used for dealing large quantities of products in B2B deals.

In the end, it’s a fairly passive operation that simply involves storing and moving goods.

Fulfillment Centers 101

Everything you read about warehouses can apply to fulfillment centers, too. After all, it’s still a large building with plenty of storage capacity, so why not?

But some centers are different than others, so you will always need to check.

Where these two structures part ways, though, is that fulfillment centers fulfill orders by businesses, whether B2C or B2B. E-commerce fulfillment is a common service offered by these types of structures, and it’s why they are sometimes referred to as an e-commerce warehouse.

They work with retailers and corporations to fulfill orders when they are placed and sometimes even more. That’s why – unlike a simple warehouse – a fulfillment center may not have product stored in its capacity for very long.

They’re designed to house goods and products short term until they need to be shipped out, which can be a rather quick turnaround.

E-commerce grows and experts project it will continue to grow. Online shopping blew up out of nowhere, and so far it shows no signs of slowing down.

Especially around the holidays, where brick-and-mortars are packed and bogged down, more and more people seek easy ways to make their purchases online. But a lot of smaller businesses know that fulfilling orders when you get going can be a difficult process.

Sure, shipping out a package here and there doesn’t seem like a big deal, but what do you do when you have hundreds in a single week? And even then, what other aspects of the customer’s shopping experience are you missing out on?

There are actually more than a few ways fulfillment centers assist businesses.

Shopping Portal Integration

Fulfillment centers can integrate directly with your online store. This means there doesn’t need to be back and forth you and the center. They can simply be linked up and automatically be notified when orders are placed.

Quality Assurance

When orders are placed, the integration software allows a fulfillment center to grab it right away, but there’s also an opportunity to check for errors.

Sometimes, errors can happen right at the beginning of an order. These centers can catch that early on.

Not only that, fulfillment centers will be able to provide quality assurance to the actual packaging itself. At some point, products will be picked out, but packers will have the opportunity to inspect order accuracy when everything is put together.

This means stopping mistakes before they become an even bigger problem.

Individualized Packing

One of the possible drawbacks of e-commerce is the blandness of a plain cardboard box. A company may have exciting and unique products and goods with equally unique packaging but plain shipping can ruin the experience.

Some fulfillment centers give businesses the opportunity to individualize and personalize their packaging or inserts. Packing slips, for example, can help brand your business and

Customer Interaction

Another part of the process that some people don’t think about before using shipping centers is the ability to interact with the customer after the order.

Again, in this day and age of online shopping, customers want to know that their order has been confirmed and they want to know where the package is. Fulfillment centers are able to help companies out by providing:

• Order confirmation e-mails
• Shipment e-mails
• Tracking e-mails
• Follow-up e-mails

It’s always a good idea to follow up with the customer after the order has been placed and fulfilled.

Go Beyond Borders

Fulfillment centers also give companies the opportunity to reach markets they may not have been able to before – as well as save. Because shipping centers carry so many products and deal with so much shipping, they often benefit on bulk discounts and savings.

Those savings can be passed on to your company. Plus, these centers generally have access to locations all over the world, which means being part of a large network and reaching customers that were previously unreachable.

Which is Right for You?

It’s easy to view fulfillment centers and warehouses as the same thing. Sometimes, the names are used interchangeably, such as “shipping warehousing.”

But while a fulfillment center can sometimes be a warehouse, a warehouse doesn’t perform the same duties as a fulfillment center. As online shopping continues to rage in the modern era, fulfillment centers provide the opportunity to make, ship, and fulfill orders in no time flat.

If you’re interested in seeing how Leap-3PL can help you with your e-commerce business, feel free to chat with us right away!