A core part of every eCommerce business is order fulfillment. Both a fulfillment center and a distribution center might be part of your eCommerce supply chain. Both play a part in the fulfillment process. But how do you choose between a fulfillment center vs. distribution center?
Some people use the terms distribution center and fulfillment center interchangeably. In reality, however, they are not the same. Each serves a different function. Here’s the difference between a fulfillment center vs. a distribution center.
What is a fulfillment center?
A fulfillment center is a warehouse that provides eCommerce fulfillment services. Your products ship to the fulfillment center in containers or on pallets. The warehouse stores your merchandise until it sells. The fulfillment center is the final destination for your products before they ship to consumers or wholesale customers.
As your orders come in, they are transmitted directly from your sales channels to your fulfillment center. Most fulfillment companies have an online dashboard where you can track the progress of orders through the warehouse. Your fulfillment center picks the items for the order from the shelves and packs them for shipping. The shipping station will add a label and notify the carrier that the package is ready to be picked up. Carriers such as FedEx, UPS, and USPS make regular daily pickups at fulfillment centers.
Many fulfillment centers provide additional services. These can include inventory management, multichannel fulfillment, and kitting and customization. The days when a fulfillment center was simply a warehouse to move products in and out are over.
Fulfillment centers are also known by other names, including:
- Fulfillment warehouse
- Order fulfillment center
- 3rd-party logistics warehouse or 3PL
What is a distribution center?
A distribution center is also a warehouse, but it holds a different spot in the supply chain. Distribution centers are waystations where products are redistributed. Products may also be warehoused in a distribution center.
Distribution centers don’t ship orders directly to consumers. They can be transfer points where products shift from one transport mode to another. Sometimes products are sent from distribution centers to fulfillment centers for order fulfillment. A distribution center may also be a merchandise hub for a large retailer.
For example, many grocery chains use distribution centers to stock their stores. A truckload of bread, eggs, or tomatoes arrives at the distribution center. Then a different truck is loaded to take goods to a grocery store. That truck might be packed with bread, eggs, tomatoes, and other products.
Which do you need – fulfillment center or distribution center?
If you need help with eCommerce fulfillment, you’re probably in the market for a fulfillment center, not a distribution center. Your next step is to find the best eCommerce fulfillment services company for your business. Your choice will depend on the level of service you need, the size of your business, and what type of products you sell. Some eCommerce companies have special requirements, such as crowdfunding fulfillment or subscription boxes. Make sure your fulfillment company provides the services you need.
Red Stag Fulfillment is happy to talk with you about what you need in a fulfillment center. Feel free to reach out if you’d like help figuring out the right fulfillment company for your business. In the meantime, our handy fulfillment company questionnaire can help you ask the right questions and gather information.