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What are the Differences Between Warehousing and Fulfillment Centers?

When clients and prospects first come to us at ShipWizard, many are under the impression that a warehouse and fulfillment center are the same thing. We find ourselves often explaining the differences between the two, so we decided to write a blog that we could share with everyone.

What do a warehouse and fulfillment center have in common?

Before getting into the differences between a warehouse and fulfillment center, let’s review the similarities, which may be what causes confusion in the first place. Here are several things that a warehouse and fulfillment center have in common:

  • Both are buildings that store inventory
  • Both are utilized by eCommerce businesses of all sizes, in a variety of industries
  • Both eliminate the need for merchants to store products in their own home or office
  • Both are climate controlled to maintain the quality of the products

That’s about where the similarities between a warehouse and fulfillment center end, as both are used for very different activities.

What’s the difference between a warehouse and a fulfillment center?

In order to outline the differences between a warehouse and fulfillment center, we’ll start by explaining the role that each plays in the order fulfillment process for ecommerce merchants.

  • What goes on at a warehouse? Most merchants don’t have enough space in their homes or offices to store merchandise, so they either lease or purchase a warehouse for the purpose of storing inventory until it is needed. Aside from storing merchandise, that’s about all that goes on at a warehouse.
  • What goes on at a fulfillment center? There is much more action at an eCommerce fulfillment center. Here, some inventory that is expected to sell soon is stored. Once a customer makes an online purchase, the order is picked from the shelves, and then packaged, labeled and shipped. 

Now that you understand what goes on at each, here is an outline of some of the differences between a warehouse and a fulfillment center:

  • Ecommerce orders are usually shipped from a fulfillment center, not a warehouse.
  • A warehouse’s main purpose is to store inventory, while the purpose of a fulfillment center is to ship orders to customers as quickly and efficiently as possible.
  • The day-to-day activities in a warehouse are pretty static, while a fulfillment center is a busy place with lots of action.

Outsourcing your warehouse storage and product fulfillment

When an eCommerce retailer stores merchandise in their own warehouse, they not only have to pay for the cost of the structure, but also the forklifts, conveyors, and other necessary equipment, as well as for electricity and water to keep it running.

On the fulfillment side, bringing it in-house means paying for the materials needed to run your fulfillment center and ship all orders. This includes the cost of everything from employees, to packaging supplies, to shipping costs, to technology (and everything in between).

Outsourcing your warehouse storage and product fulfillment to a 3PL services company can save you lots of money, as well as time and energy. Leaving fulfillment to the experts will provide peace of mind that your customers are receiving the correct orders in a timely manner, while giving you a lot less to worry about in terms of setup, workload, overhead, and maintenance.

November 13, 2019
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