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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.

fulfillment center vs. distribution center

What is a fulfillment center?

A fulfillment center is a warehouse that provides fulfillment services such as receiving, storage, and shipping for ecommerce businesses. Products are shipped to the fulfillment center in containers or on pallets and stored in the warehouse until they sell. The fulfillment center is the final destination for 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.

Fulfillment center workers

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

Third-party logistics can refer to a fulfillment center or to a more complex logistics operation. Additional levels of logistics services are available, including 2PL, 3PL, 4PL, and 5PL.

What is a distribution center?

Distribution centers are waystations where products are stored and later redistributed. Products are shifted from one transport mode to another at these transfer points, and often go on to fulfillment centers or large retailers. Distribution centers hold a different spot in the supply chain than fulfillment centers, and generally don’t ship directly to consumers.

3PL warehouse dock

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.

fulfillment center vs. distribution center