Warehousing & Fulfillment

Fulfillment Center vs. Warehouse: Which is Best for Your Business?

Fulfillment centers and warehouses find themselves used interchangeably, yet they play very different roles. Learn about these key differences on the blog.
Fulfillment Center vs. Warehouse: Which is Best for Your Business?

By Jules


December 25, 2019

Without a doubt, one of the best ways to achieve a positive customer experience is to make sure that they receive their orders in good time. And, the best way to do this is to make sure that your chosen fulfillment center can keep up with customer demands. After all, one of the benefits of online shopping is having access to a wide range of products. However, this is only the case if these products can be packaged and shipped efficiently.

To do this, it’s important to understand the nuances of the fulfillment center vs warehouse debate. This guide will explain the differences and similarities between the two and how to choose between them.

Inside a Warehouse

What is a Warehouse?

A warehouse is simply defined as a building that is specifically used for storing goods. Warehouses are not used only by manufacturers, but by anyone involved in moving products around the world. This includes importers and exporters, transport businesses, wholesalers, and customers. Warehouses are usually large and plain in design. Often, they’re also situated in industrial parks in the outskirts of a city or town.

Most warehouses also have loading docks attached to them. This is to facilitate the loading and unloading of trucks. Some warehouses are even designed to allow goods to be loaded into them directly from the seaport, airport or railway. For small businesses, any space can function as a warehouse, from a spare room or garage to a basement. However, your warehouse will have to have some unique basic elements. Though these may differ depending on the type of products you deal in, you may need to consider having on hand:

  • A climate control system, especially for frozen or pharmaceutical products.
  • Adequate shelving to store goods.
  • Inventory management software that allows you to accurately track your items and take inventory quickly.
  • Equipment for lifting heavier objects and moving them from one place to another (i.e. a forklift, pallet jack, etc.)
  • Pickers and loaders to help fulfill orders.
  • Adequate security, especially if you deal in high-value items.
  • Affordable transportation for moving products.

What is a Fulfillment Center?

Fulfillment centers are physical spaces where customer orders are processed and fulfilled. These are usually designed to offer cost-efficient, fast order fulfillment. Depending on whether your orders are business-to-business (B2B) or business-to-consumer (B2C), they will go from the FC directly to retailers or your customers’ doorsteps.

Many eCommerce retailers choose to sell through eCommerce channels because it eliminates the need for a physical space. Fulfillment centers enable these online merchants to outsource their warehouse, fulfillment, and shipping needs. It also saves them time, energy, and money, which can instead go directly to manage inventory.

Related Post: The Challenges of In-House Fulfillment

Fulfillment Center vs. Warehouse: The Similarities and Differences

Now that you know exactly what fulfillment centers and warehouses are, we can weigh in on their differences. Here are a few things you should know:

  • Both are usually large buildings that are capable of holding inventory for many businesses.
  • Warehouses are used as a long-term storage solution, while fulfillment centers offer temporary storage for products that will soon go out for delivery to customers.
  • Warehouses only handle storage of customer products; fulfillment centers handle all stages of order fulfillment, including negotiating rates with courier services.
  • Warehouse operations are mostly static, while at fulfillment centers, operations are more complex and in constant motion.
  • A warehouse is often used by an individual company or business; a fulfillment center can offer its services to multiple merchants who need to fulfill customer orders.

In addition, fulfillment centers offer a number of services that warehouses don’t, including:

  • Pickup of products for individual customer orders
  • Gathering of inventory
  • Order packing
  • Shipment labelling
  • Managing customer exchanges and returns
  • Ability to guarantee next-day or same-day delivery in various locations.

Fulfillment Center vs. Warehouse: Know the Differences

As an eCommerce merchant, the success of your online store depends on the overall satisfaction of your customers. Understanding the difference between warehouses and fulfillment centers will go a long way in helping you work towards fulfilling customer orders efficiently and ensuring their satisfaction. Easyship partners with over 20 warehouses around the world and offers assistance with fulfillment. Sign up for a free account today and let us help you streamline your order fulfillment process while you focus on growing your business.