Synonyms are funny. They’re meant to be two different ways to describe the same thing; we use words as synonyms when we shouldn’t. A painter is an artist, but an artist isn’t necessarily a painter. And a fulfillment center may be a type of warehouse, but a warehouse isn’t necessarily a fulfillment center.
In eCommerce, companies that have outgrown their mom-and-pop-sized operations typically use a warehouse or fulfillment center with warehousing capabilities. This blog will briefly discuss the difference between the two and how they work to your eCommerce brand’s advantage.
Warehousing Solutions:
A warehouse is an ample storage space that holds inventory in bulk. There can be many different sections to a warehouse. Regarding eCommerce brands, how much you pay for room and where that space is located within the warehouse depends on how much product you store and how quickly it moves. Warehouses can service B2B and B2C clients. These storage centers have shelving as far as the eye can see and machinery to load in and load out products like forklifts, conveyors, and robotic assistants.
Huge eCommerce brands may have their own warehouse space, particularly for excess inventory. For certain businesses, it can be more cost-effective to lease warehouse space rather than buy their own private storage space. Given the higher prices for warehouse storage in today’s rising eCommerce market, some smaller sellers may choose to go with a less expensive and extensive warehousing solution and will rent private storage, which may come with the burden of looking after your inventory more personally but allows you to retrieve on-hand product easily if you are running low.
Fulfillment Center Solutions:
A fulfillment center is the heart of a 3PL (third party logistics) operation and a modern marvel of the eCommerce world. Your products are processed, picked, packed, and shipped to customers. A fulfillment center handles every step to get your goods to those who bought them, including storing your inventory. An eCommerce brand will integrate a top-tier fulfillment center solution like FR-Logistics into their supply chain to streamline operations—increasing efficiency, decreasing the possibility of error, and shaving time off the shipping process, so your customers get their orders as fast as possible.
A fulfillment center has the warehousing solution built-in, whereas a warehouse does not automatically come with fulfillment solutions. As mentioned, a fulfillment center’s component is storing your inventory. How it works with a fulfillment center is your stock will arrive and be stored in its designated shelving location. This is called slotting.
2PL vs. 3PL:
Just as an entree at a restaurant influences what wine you order (white with fish, red with meat), your logistics path is determined by where you put your inventory. To further understand the difference between a warehousing solution and a fulfillment center solution, AND understand which is right for you, let’s look at 2PLs vs. 3PLs. Briefly, warehouse solutions go with 2PLs, and fulfillment center solutions pair with 3PLs.
In the case of a 2PL (second party logistics), there are three players in the online retail journey—the business, the carrier, and the customer. Once a purchase is made from the online retailer, a page like FedEx, UPS, USPS, DHL, and so on is called upon to be the middleman that transports goods from the business’s storage space to the customer. Having a 2PL is certainly better than being a 1PL (one-stop-shop and in it alone, if you will) because this middleman handles your freight forwarding, courier services, and all other transportation needs. If you’re doing all the fulfillment logistics yourself because you either have all the product at your business/home or utilize a warehouse, you are in the 2PL camp.
If you are an entrepreneur that wants to free up your valuable time and invest in a provider that doesn’t just hold onto your inventory but fulfills orders, you are on Team 3PL.
To save time, maximize efficiency, and kick eCommerce butt, growing businesses go the route of 3PLs because orders do not require your hands-on involvement. 3PLs like FR-Logistics have a technologically advanced, intelligently designed fulfillment center with warehouse space designated for holding your inventory.
That way, fulfillment processes can move with the precision of an exemplary train station when an order comes in. At FR-Logistics, we handle all significant areas of the supply chain for you, including but not limited to:
Inventory Management
Storage
Order Fulfillment
Picking and Packing
Sortation
Shipping
Managing Returns
A FULFILLING Solution:
To quote FR-Logistics: “Warehouses store things. Fulfillment centers move things.”
Your inventory is precious. Adopting the 2PL lifestyle by renting warehouse/storage space and handling the fulfillment process yourself is an option if you are a small operation. If you are a humongous brand, perhaps having your warehouse makes the most sense. Your manufacturing process and supply chain will dictate some of the balance between warehousing storage use and fulfillment. In general, though, for most eCommerce brands, going to the fully integrated fulfillment center, i.e., the 3PL route, is your best bet. Why?
The bottom line is that as an eCommerce business owner, you want to ensure your inventory is safe and ready to move at the drop of a hat when customers come calling. The speed with which you can answer that call to action comes down to streamlining the process as much as possible. You’re an entrepreneur; if you intend to grow and scale your business, don’t waste your time or your customers’ time handling the fulfillment process yourself. Get all the benefits of a warehouse while delegating the multifaceted, complex logistics operations to a trusted 3PL like FR-Logistics.
Ready to take your eCommerce business to new heights?
Outsourcing your order fulfillment has never been easy—FR-Logistics integrates with your sales channels. FR-Logistics is set up to help your eCommerce brand navigate both aspects of the fulfillment process and all others. Our tech and team are bound to make a difference in your business as we make navigating the supply chain, managing your inventory, and keeping your customers happy easier. Contact us directly for a quote.
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