What Is a Fulfillment Center? Everything You Need to Know

Employees working in a warehouse fulfillment center to demonstrate what is a fulfillment centerIt would be simply impossible for the planet to accomplish all that it does every day without the assistance of fulfillment centers. We rely on them as a society to help us move products from one location to another and help provide goods to the people who order them. It is essential that we understand a little more about retail fulfillment and what a fulfillment distribution center is if we want to peek behind the curtain and see how our goods are moved from one place to another. 

What Is the Difference Between a Fulfillment Center and a Warehouse? 

Fulfillment centers and warehouses seem very similar to one another. The two terms are often used interchangeably by people who are not confident that they understand the difference between the two. The two types of buildings share some similarities in that they are both extensive facilities that hold massive amounts of inventory. However, the way they are used is different, and it is critical to note how they differ. 

Fulfillment Services: What Are They? 

The logistics and fulfillment processes are intertwined in that a fulfillment center is built with many logistics processes in mind. That is to say that a fulfillment center can provide the following service to its users: 

  • Packaging
  • Shipping
  • Storage
  • Handling returns

Essentially, a fulfillment center can handle every interaction that a customer has with a company regarding the products they purchase online. Additionally, fulfillment centers are most often used by third-party companies interested in leveraging the services these centers offer. Companies do not necessarily want to build their warehouses and storage facilities due to the overhead costs. However, they are happy to rely on fulfillment centers to help them get their goods to customers right when they need them. 

How Is This Different from a Warehouse? 

Warehouses are often more about the long-term storage of goods. They are typically owned by the same company that uses them, and the supplies in that warehouse may remain there for a long time. The company may sell some of the items from their warehouses from time to time, but they are generally used for parking certain things that the company doesn’t have space for at that time. 

Many companies have started to balk at the idea of using warehouses as they do not appreciate the high costs of these facilities, and they are concerned that keeping their items stored in a warehouse could pose a risk to the bottom line. As such, fulfillment centers have quickly become the preferred logistics storage and transportation method. 

What Does Inventory Fulfilled Mean? 

This is a good sign if a customer ever sees a message about their inventory being fulfilled. It means that all systems are processing the goods precisely as they should. In other words, ordered items are currently making their way through the supply chain as intended. Customers who see a message like this should expect to receive their order on its expected delivery schedule. 

Fulfillment centers have made predicting when items will arrive much easier. These centers have many pieces of data that they can lean on to determine precisely when a specific order will arrive at the doorstep of the customer who ordered it. These systems are not perfect, and they may get the delivery date wrong from time to time, but mostly they are pretty accurate. 

Clients who use fulfillment centers have been very pleased with their ability to use these centers to get orders out to their customers without the financial burden it would cost them to store all of their inventory on their own. Fortunately, more fulfillment centers are being built all around the country to meet the ever-increasing demands of online shopping. 

You should expect to see more and more companies relying on fulfillment centers in the future as they see how the tides are turning in favor of on-demand delivery like this. The public will continue to demand materials be delivered right when they want them, and many companies will feel the pressure to meet those demands for their customers. That is the direction that commerce is headed, and the companies that get ahead of it now will put themselves in the best position to profit from it later.

Veltri Logistics is here to help you with all your logistics needs. Contact us today.

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