One of the most important things to consider when setting up an e-commerce business is how your customers will get their orders. You have two warehouse options to choose from – a fulfillment center and a distribution center.
Both distribution centers and fulfillment centers store and ship products, and it can be difficult to choose between a fulfillment center and a distribution center. This guide explores the function and purpose of fulfillment centers and distribution centers so you can make the best choice for your needs.
What Is a Fulfillment Center?
A fulfillment center is a warehouse operated by a third-party logistics provider that receives, processes, and fulfills customer orders on your behalf. You can receive and inspect items before sending them to the fulfillment center, or have the manufacturer send them directly to the center to manage the fulfillment center’s inventory.
Fulfillment centers are an important aspect of the supply chain because they ensure that online orders are delivered to customers faster and at a lower cost. They assist you in strategically storing your goods, ensuring that orders are picked up quickly once customers have completed their online transactions.
Fulfillment center employees are responsible for picking, packing, and shipping orders to customers. They also receive inventory shipments, label customer orders and process returned goods.
What Is a Distribution Center?
A distribution center for a set of goods is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with goods to be redistributed to retailers, wholesalers, or directly to consumers. A distribution center functions similarly to a warehouse. However, it does appear to be a point in the supply chain rather than a fulfillment facility. In the most basic sense, a distribution center is a warehouse that allows goods to be redistributed.
The main difference between a fulfillment center and a distribution center is that a distribution center does not ship directly to customers. Instead, it functions as a staging area for the transfer of goods from one mode of transportation to another.
What Is the Difference Between a Fulfillment Center and a Distribution Center?
Fulfillment Center vs Distribution Center: Which Is Better?
Pros and cons of fulfillment center
- Provide kitting services
- Pick and package the goods for you
- Focus on the core of your business
- Close to customers for faster shipments
- Provide reverse logistics services and manage returns
- Goods are delivered directly to the buyers
- Thoughtful after-sales service
- The automated fulfillment process is transparent
- Storage costs are expensive
- Keep things for a limited time
- Loss of Personalization
Pros and cons of distribution center
- The convenience of the customers
- Sufficient warehouse space available
- Ability to place merchandise closer to target markets
- Retailers can buy the goods in small quantities
- Bulk shipping, less frequent dispatch of orders
- Goods are delivered on pallets, with no packaging
- Shipping times are often longer
- Less direct communication with customers
- Not as many services as the fulfillment center offer
How To Choose Between a Distribution Center and Fulfillment Center?
Companies sometimes face the dilemma of choosing between a fulfillment center and a distribution center, and in general, e-commerce fulfillment requires a fulfillment center. Because running e-commerce requires a very fast turnaround, delays in the supply chain are not something you want to see. After choosing a fulfillment center as a model, you have to consider the quality of their service in terms of speed and reliability.
Contact Honest Fulphilment for Reliable Warehousing and Fulfillment Services
Fulfillment and distribution centers are an important part of today’s e-commerce logistics, and whether you choose a fulfillment or distribution center, it’s important to choose a logistics provider you can trust. It can help you ship orders on time, build customer loyalty, and grow with your company. At Honest Fulphilment, we aim to help dropshipping stores realize their full potential by providing them with best-in-class fulfillment center services.
Our services include: