Every eCommerce company needs some type of warehouse. You might ship orders from your garage when you’re first starting out, but as your business grows, you’ll eventually need a more formal fulfillment operation. But do you need a 3PL fulfillment warehouse or a different type of warehouse? Here are some warehouse basics to get you started.
What is 3PL fulfillment?
Fulfillment is the process of packing and shipping eCommerce packages. A 3PL is a third-party logistics company that specializes in handling logistics for other companies.
However, 3PL fulfillment involves much more than packing and shipping orders. A 3PL fulfillment warehouse will handle inbound freight and storage as well. Many eCommerce fulfillment companies provide extra services like kitting, returns processing, or inventory management.
There are many other words used to describe fulfillment warehouses: 3PL, logistics, eCommerce fulfillment, fulfillment center, product fulfillment, and order fulfillment, to name a few.
Types of warehouses
There are many types of warehouses other than fulfillment. Here are just a few.
Private warehouse
A private warehouse is owned and operated by a company that uses the space for its product storage. Some private warehouses are also fulfillment centers that serve just one client. For example, a large retailer like Target or Walmart may own and operate private fulfillment warehouses.
Public warehouse
A public warehouse rents space to businesses and individuals. Government entities often own and operate public warehouses. Companies most commonly turn to public warehouses for extra storage capacity and don’t rent the space long-term.
Bonded warehouse
A bonded warehouse is a waystation for imported items that are subject to customs duties. You don’t have to pay the duties until you take delivery of the products from the warehouse. Imported products waiting to finish customs paperwork may also spend time in a bonded warehouse.
These warehouses are called bonded because users buy a bond from the warehouse that guarantees the item’s price at the time it’s sold. Importers often use bonded warehouses to store their shipments while they look for buyers.
Distribution center vs. 3PL warehouse
A distribution center is a warehouse that redistributes products, often for large retail or grocery chain stores. Deliveries come in from wholesalers, and then the distribution center divides them up to send to individual stores. A truck might come into a grocery distribution center filled with just tomatoes, or eggs, or cereal. Trucks then leave the center carrying smaller amounts of a variety of foods, headed for specific grocery stores.
While a 3PL warehouse might seem similar to a distribution center, there are several differences.
- 3PLs provide fulfillment services for many different clients. Distribution centers usually process goods for just one company.
- Fulfillment warehouses are part of the eCommerce industry. Distribution centers most often serve brick-and-mortar retail stores.
- Third-party logistics warehouses occupy a different spot in the supply chain from distribution centers. A 3PL will receive goods from a supplier or wholesaler, process online orders, and ship products directly to the end consumer. A distribution center will receive products from suppliers and ship them to stores, thus remaining within the wholesale space. Distribution centers never deal with individual consumers.
Kinds of 3PL fulfillment warehouses
Fulfillment warehouses come in many different flavors to meet the varied needs of eCommerce companies. These are just a few of the different types of warehouses.
Climate-controlled
Many eCommerce companies now ship products that need cold storage. Climate control might mean anything from keeping the temperature at a consistently cool temperature to refrigeration or freezers. Many food products need cool or cold storage. Electronics, artwork, antiques, and other delicate items might require storage in a climate-controlled warehouse.
Food-grade warehouse
Fulfillment for food products sometimes needs cold storage. Food items always require a 3PL fulfillment warehouse certified to provide food-grade warehousing. Food-grade 3PLs need to meet FDA requirements and pass periodic inspections to keep food products safe. Also, food-grade fulfillment may require the warehouse to track package expiration dates.
Automated or smart warehouse
Smart warehouses provide 3PL fulfillment services. However, instead of a floor filled with human pickers and packers, robots and AI do most of the work. Examples of warehouse automation include drones that fly to shelves to pick items for orders and moveable shelving units that come to a picking station while the picker stays stationary. The tech that runs a smart warehouse is just as crucial to its operations as the physical processes on the warehouse floor.
Specialized fulfillment warehouses
Some 3PL fulfillment warehouses specialize in particular products. For example, there are warehouses set up to store and ship only apparel items. An apparel warehouse might have space for products on hangers and stations for inspecting returns for damage. A fulfillment center specializing in books will have climate control to ensure that the pages don’t curl. A warehouse that works with products labeled as hazardous materials will follow federal regulations about hazmat handling.
Red Stag Fulfillment has a well-earned reputation for shipping heavy and bulky products. We built our shelves and aisles wide enough to accommodate large boxes. The conveyor belts in our packing stations are more sturdy than ordinary conveyors so that they can carry heavy packages.
What type of fulfillment warehouse does your company need?
Whatever special needs your eCommerce company has, there is likely a 3PL fulfillment warehouse built to handle them. When you look for an order fulfillment company, be sure to find one that has experience working with products like yours.
Red Stag Fulfillment has developed a questionnaire to help you ask all the right questions when you interview 3PLs. If you still have questions, or if you think we might be just the right fulfillment company to meet your needs, give us a call.
