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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.

Warehousing and fulfillment are important components of supply chain management. Sometimes these terms are used interchangeably, and often, warehousing and fulfillment services are offered by the same company. There are, however, distinct differences between the two. Understanding the relationship between warehousing and fulfillment, and the need for both, can significantly improve order processing and inventory management. 

With the use of a fulfillment center, companies reduce the burden of overhead and labor costs associated with shipping, storing and managing inventory. Not all companies have the capacity to develop and manage their own fulfillment center and instead, seek to partner with fulfillment companies. A strategic partnership with a warehouse and fulfillment center can also offer additional value-added warehouse services such as inventory management, inventory receiving standard protocols, negotiating logistics, product picking, kitting multiple items into one product, packaging, and managing returns. But what are some challenges that may hinder the order fulfillment process?