What Is The Difference Between Warehousing and Fulfillment?
Warehousing and fulfillment, both are e-commerce businesses that store goods, sell and later on ship them. Usually, people assume both the practices to be similar and use the terms correspondingly. However, they are considerably dissimilar in usage; services rendered mainly depend on the organization that uses them. Check out the post right here too. At the same time, read along to know the significant differences between both of them.
What is Warehousing?
A warehouse is a place where a seller can stockpile goods and products for a seemingly long period. It is a building, which is carefully designed to store a business’s inventory in bulk such as seasonal items, until it is required. Therefore, warehouses are usually enormous and efficient for storing.
Several selves of extended height are stacked from top to bottom with goods in a warehouse. In addition, it has optimal space for forklifts and containers moving from corner to corner to relocate or load carriers.
Fixed procedures are followed in warehousing: moving packed boxes and crates from one place to another to reorganize products. Relocating the products means efficient usage of space.
Apart from this, another function is to transfer load out from the warehouse onto carriers for the delivery process. Therefore, inventory is mainly added, relocated, and transferred out.
Generally, businesses like wholesale, which work with an abundance of products, reach out to the warehouses for storage. It is available for various sizes of companies, whether small or large scale. Small businesses can share or lease warehouses for inventory storage and can generate revenues too.
What is a fulfillment center?
A fulfillment center is a large building where third-party logistic suppliers provide custom orders for e-commerce retailers or companies. Fulfillment centers deliver goods and services to the customer in response to an order they place.
Also, it stores items for a small duration only. The centers work for retailers, ecommerce companies, corporations to fulfill B2C and B2C orders quickly.
The significant differences between fulfillment centers and warehousing are:
1. Storage
The critical aim of fulfillment centers is to turn inventory quickly. Supremely, you should not keep the products for more than a month in a fulfillment center. Otherwise, as a retailer you have to pay high keeping fees.
However, sellers do send enough inventories beforehand to centers to avoid shortage and trouble before shipping. Also, they can choose a center nearby the customer’s location to cut shipping costs and delivery time.
In contrast, warehouses store products for prolong period, and their objective is to securely keep them in one place unless they are in demand. They are located at a specific location and may cost you high for storing goods for a particular time ensuring their safety and quality.
2. Major errands
Warehouses are inactive, whereas a fulfillment center takes account of the continuous movement of goods. The center can be responsible for various order fulfillment services like receiving inventory, generating pickup lists, and picking products from different sites.
Moreover, they also deal with box packing, labeling shipments, managing returns and shipping orders.
In comparison, the warehouse’s main actions are adding items in inventory or transferring them out without offering extraordinary services like fulfillment centers.
3. Shipping carrier’s pickup rate
Shipping is a significant part of a fulfillment company. Thus, they usually have good relations with different shippers. The centers work to deliver customers’ orders, as soon as possible and to achieve it they need the help of transporters around the clock. The time and date of delivery rely on the customer’s hand, and shipping carriers have to pick up orders sometimes instantly and cope with fulfillment centers depending on domestic or international shipments.
On the other hand, warehousing does not need separate packing and shipping labels like fulfillment. The pickups are scheduled and less frequent as boxes are wrapped together on a pallet, hence also cost-effective.
4. Technology usage
As in fulfillment centers, activities are operated constantly, and for 24 hours a day, it does need up-to-date technology to handle different kinds of demands. The relentless movement of goods needs ongoing communication and the capability to respond to unforeseen requests based on market movement within the industry. Therefore, tech involvement is necessary to ensure receiving, tracking online orders on time, and tracing packages movement efficiently.
Whereas, as stock is piled for an extended period and movement is static in warehouses, investing in technology is less desirable.
To run an e-commerce business smoothly and make it a cost-effective process, retailers need to manage and coordinate inventory movement. Although fulfillment and warehousing are interchangeably used, they do have significant functionality differences.
As stated above, a warehouse will have extensive storage facilities for a fixed time, but the fulfillment center offers storing options for a shorter period and other services. The sellers must carefully choose the favors by keeping in mind the services they provide to customers.
