On the outside, warehouses and fulfillment centers are large buildings that house inventory. However, the purpose of these facilities are vastly different. Each facility provides a different service for their customers, from storing inventory for extended periods of time to storing inventory and shipping it for customers will all be dependent on what the need of the customer is for their company.
E-commerce, also known as online retail, has changed the way consumers shop. Despite accounting for just over 13% of global retail sales, e-commerce generated an estimate of $215 billion in the United States. Retail has seen substantial changes because of technological advancements, which have had an impact on e-commerce. As businesses have attempted to accommodate unpredictable fluctuations in supply and demand, such changes have come with the complexity of inventory management connected with e-commerce. Many online retailers have adopted Just-In-Time delivery to optimize inventory management and ensure customer satisfaction.
Managing inventory efficiently and cost-effectively is critical to any e-commerce business. And while “warehouse” and “fulfillment center” are sometimes used interchangeably, there are differences in the two types of facilities’ ability to store large volumes of inventory over long periods of time.
How quickly and efficiently your business can fulfill customer orders directly affects your profitability. If your order fulfillment process is too slow, you’re “leaving money on the table,” so to speak.
A third-party logistics provider (3PL) offers a broad range of services that can include fulfilling orders. An order fulfillment provider is also sometimes called a fulfillment center and is defined as a company that takes care of tasks associated with picking, packing and shipping of customer orders.
