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.
What is a Warehouse?
The main purpose of warehouses is for storing items. Product storage within a warehouse can be either long-term or short-term. Depending on your company, you may either own your own private warehouses to store your inventory or they may outsource warehousing for extra storage if that works best for their company.
What is a Fulfillment Center?
Similar to a warehouse, fulfillment centers also store inventory. Fulfilment centers, however, are also responsible for taking items held in inventory, packaging them up and sending them to customers as item orders are placed. Businesses such as retailers, e-commerce companies, and corporations often use fulfillment centers to fill B2B and B2C orders. The overarching goal of a fulfillment center is to get product to the customer as quickly as possible, after the order is placed. Orders can be shipped from a warehouse to a fulfillment center, where the fulfillment center will ship the item to either a business or a customer.
What is The Difference Between the Two?
Both of these facilities are large buildings that store inventory on their shelves, so, differentiating the two can be difficult. The biggest differentiator between a warehouse and a fulfillment center is long-term vs short-term storage. Warehouses are meant to store inventory long-term; companies will send their product to be stored and then removed as needed for production. However, fulfillment centers store inventory for short periods of time, and should not have inventory longer than one month as the sole purpose is to get items picked, packed and shipped.
Is a Warehouse or Fulfillment Center Better for Your Company?
Whether you’re a small business or a retail company, taking your storage and shipping needs into consideration will help determine if a warehouse or fulfillment center will better benefit your company. When your business begins to spend a noticeable amount of time packaging inventory and shipping out orders, it may be time to outsource a fulfillment company. Additionally, if your company is also running out of space to store items, looking into warehousing can benefit your company by reducing inventory. It is important to decide if it is more beneficial for your company to purchase their own warehousing or outsource a warehouse facility to help mitigate inventory on hand.
Utilizing cost effective warehousing and fulfillment services can improve customer satisfaction and increase your profits. NewStream Enterprises, LLC is centrally located allowing easy shipment to anywhere in the continental US. NewStream provides both warehousing and fulfillment services that will take care of all your needs and help your company love their supply chain again.
Will our warehousing and fulfillment services help improve your company? Contact our experts today!