Fulfillment Centers vs. Warehouses: Which One is Better?

Fulfillment Center vs. Warehouse: Which One is Better? Maybe you are thinking about whether a fulfillment center is better or a warehouse. Technically, both are different things. Yet they offer storage services but with distinct goals. You have to be very definite about the goals, budget, and criteria for your orders.

We have written a detailed comparison of the Fulfillment center with a warehouse. The aim is to clarify all the concepts and goals. Are you ready to embark on a new journey for a better decision? Then, sail this boat, and we’ll know which is better, the fulfillment center or the warehouse.

 

1. Warehouse Basics

1) What is a warehouse?

A warehouse is a place where you can store your products. Consider it as a facility that facilitates storage services at a specified cost.

Warehouses are not government-owned property. Instead, some private warehouses are there. They offer good storage installations with excellent inventory monitoring in real-time.

2) How does it work?

Think about a walk in the park! That is the same with the warehouse storage services. Here are some steps to understand the operations of the warehouses.

• Ship the products you want to store in the warehouse.
• Loading, unloading, and shelf storage depends on the team.
• CCTV monitoring, RFID technology, and automated system integrations. All provide real-time information about the stocks left.
• Connect your stores with the warehouses or suppliers. Make automated orders and monitor the stock levels.

Warehouses have revolutionized the whole industry with their flawless storage systems. No matter if you want to store your products for one month or a year. Most of the warehouses offer all the facilities. Plus, intelligent robotics technology has dominated the monitoring aspects. It delivers a smooth experience to users.

3) When do you need a warehouse?

You have understood the significance of the warehouse, but when should you use it? It is not a big deal as a warehouse can be effective in the following conditions.

• Storage of products. Sometimes, you have no plans for short-term or long-term storage. A warehouse can be the deal of the century at such a point, offering you a place and ease to store products.
• Stock monitoring. Do you want to monitor stocks and order them in time? Believe in the supremacy of the warehouses. They offer flawless monitoring services with regular updates. You can automate the orders when connected with the supplier dashboard.
• Smooth supply chain. Enhanced consumer experience is possible with a seamless supply chain. Most warehouses offer an ideal environment to connect multiple sale channels and automate all the orders. That draws consumers’ attention and increases the sale levels within no time.
• Dropshipping. Dropshippers don’t own warehouses and need to hire one. It can be the right option to store and ship their inventory to consumers.

4) Types of Warehouses

There are multiple types of warehouses you can find out, but we have listed the most popular types you should know.

● Public warehouses

The local government often owns such types of warehouses. Public warehouses are open to product storage. Private companies or individual sellers can store their products in such warehouses.

● Private warehouses

Private warehouses are often present in almost every country or city. They might be more than the public warehouses and are owned by private companies. Costs depend on the set standards by the owners. However, you can store the products.

● Bonded warehouses

In cross-border shipments, bonded warehouses play a crucial role. They offer a space for the products before customs inspections and duties apply to them. They don’t charge until you get the clearance from the customs.

● Smart warehouses

If you are looking for innovative warehouses, look no further. Smart warehouses deploy cutting-edge technology such as artificial intelligence and streamline the order process.

● Consolidated warehouses

When the shipment companies have to ship smaller packets, they consider the consolidation in one place. That is when consolidated warehouses play out and provide a definite space until the final delivery takes place.

 

2. Fulfillment Center

1) What is a fulfillment center?

I don’t think the fulfillment center is different from a warehouse. But there is one difference you must know: fulfillment centers have a different purpose.

First, define the fulfillment center.

A fulfillment center is a large building or space used to store the products. Such products are not there for long-term storage. Instead, only a short storage period occurs until the shipping occurs to the consumers.

 Such warehouses are around the customer locale. For instance, the DHL fulfillment center in Alabama serves the delivery to the Alabama state consumers. Similarly, it applies to all the cases around the globe, countries, and cities.

2) How does it work?

A fulfillment warehouse allows the companies and sellers to store their products until they get shipped. Proper monitoring and updates come through the use of technology and API integration. The whole working mechanism, from securing products to shipping, is the same as the warehouse. The only difference is the short-term collection of all the products in a centralized place.

3) When do you need a fulfillment center?

A fulfillment center is a blessing in many scenarios. Are you wondering which one? Keep the following under the radar to know when to hire a fulfillment center.

• Short-term storage of products. When you don’t have plans for long-term storage and want to continue the inventory flow, it is the right time to hire a fulfillment center and start working.
• Order automation. Fulfillment centers offer a perfect platform to automate your orders. Connect all your sales channels and let the shipping services ship your products to consumers. Improve customer satisfaction and increase your business reputation.
• Nearby Consumers. A fulfillment center is always the area where the fulfillment has to occur. That means you are going to store your products when customers are nearby. It will offer fast shipping services and ensure better order flow.

 

 

3. Pros and Cons of Warehouse

On one hand, the warehouse feels like a treat. In contrast, you must know the different disadvantages of the warehouses as well.

Here is the complete list of factors deciding which is the right choice for you!

Pros

The benefits of hiring a warehouse include:

● Smart monitoring

Forget all your hassle. Make a perfect shelter where your products get stored. At such a time, warehouses are a better choice. They deploy the latest pelleting options to store your products. When you need to know the stocks, connect your dashboard.

Moreover, RFID technology eases the research of a product. Nowadays, robots have further facilitated human jobs and minimized the risks of human errors. Therefore, you can expect a better storage facility with intelligent monitoring. Make your business smooth and run like a pro!

● Easy storage

Warehouses are of different types in any area. You know what? The storage process is quite simple. There is no need to dig into complex documentation. Grab the necessary stock, handle some documents and store!

Most often, you have to ship the products to the warehouse. The workers offer the loading and unloading facilities, minimizing your efforts. Straightforward storage processes keep your inventory under the radar. You can get peace of mind and store inventory without risks of damage.

● Streamlined processing

The warehouse world has changed a lot. Suppose you are a seller. What do you want?

• Monitor product quantity.
• How many stocks are left?
• When do you want to remove products?
• What are your goals regarding the removal of products?

The API integration handles. Connect your store and get real-time updates. Moreover, automate your orders with the shipping services. The private shipping service will visit the warehouse and pick up the products.

The whole supply chain is seamless. Super fast and easy to operate. Such a streamlining is beneficial for your business. Improve your consumer experience.

● Flexibility

You are the governing body. That is the best about the warehouse. No one can control the inventory. Keep an eye on the dashboard. Store and eliminate products on time. Let the companies ship the products.

Security with the storage is next-level. You can make your supply chain seamless for your consumers. Increase your sales. Boost your business reputation by growing your business.

● Long-term storage facility

Forget the hassles at this point. You don’t have to worry about the storage. The best thing about the warehouse is the indefinite storage period. If you want to store products for one month or a year, it is available.

The monitoring is also the same for all the products. That means products are safe for a year. You don’t have to worry until you remove the products. Just keep in mind the increasing prices with the storage setups.

Cons

Some cons also pop up with the warehouse storage. Take a look at the following cons of warehouse storage.

● Expensive

Different types of warehouses have different prices. Public warehouses are a bit cheaper but more congested. You are less likely to find the space. Private warehouses are the only option left for you!

Don’t fall for the smart supervision. It comes at a cost. For a short-term period, it can be a good deal. If you are looking for the more extended aspects of years, wait! You might change the decision because most warehouses raise the price. As the 6-month or more period passes, they double up the prices.

Moreover, in the peak storage season, the entire picture is different. It is possibly due to increased demand and less supply. Prices jump up to 200-300%, causing a burden on you.

● Shipping facilities are not there.

The warehouse is all about the storage, not the shipping. Yet some of the sellers treat it as a shipping service. Unfortunately, there is no built-in shipping facility. You store the product and get it out whenever needed.

If you want to ship, arrange a separate shipping company. It can be hectic and increase your troubles.

 

4. Pros and Cons of Fulfillment Center

A fulfillment center is a perfect place for order fulfillment. Shipping is fast and reliable. Let’s take an overview of the fulfillment centers.

Pros

Fulfillment Center offers the following pros.

● Cutting edge technology

The fast flow of inventory brought one thing— technology. The aim is to streamline the orders. All the technological options come out at such a point.

From RFID technology, you can locate orders. With store integrations, you can know orders. Newer technology has further boosted safety. From every facet, you can expect a better flow.

● Fast shipping

Fulfillment centers aren’t miles away from the customers. They are often in the consumer location.

For example, you are a seller in the US. Your buyer lives in the UK. Your fulfillment center will be in the UK, not the US. That means the distance between the warehouse and the consumer is less. You can ship products in less time. The good news is that you are less concerned about cross-border shipments and customs.

The whole process becomes fast and easy to do. No risks in transit keep your product safe and sound.

 

● Experts’ control

Don’t worry about inventory. Fulfillment centers are designed for good storage. Expert’s control provides a better flow of orders. You can control all your orders in one place. Relay messages to suppliers and shipping companies at one time.

● Better business supply chain

Do you know what precisely the supply chain is? It is the process of procurement of products from suppliers. Storing and shipping it to the consumers.

In simple words, it is the whole business operation structure. In a fulfillment center, you get storage and fulfillment in one place. Shipping is fast. Procurement is often straightforward. Reduced shipping costs and safety improve your business aims and give you a new life.

You can grow your business faster. Conclude better deals from the loyal consumers. Increase the experience and become the number one choice.

● Inexpensive costs

Since you tackle short-term storage, it is not an expensive deal. You can explore lower-cost options as well. The operational costs of the business depend on the supply chain. Since your supply chain is already strong, expect lower costs.

Cons

Here are some cons of storing products in a fulfillment center.

● Short term storage

Don’t think about the long-term storage in the fulfillment. There are many reasons behind this fact.

• The purpose of the fulfillment center is the short term.
• High demand can increase the cost.
• Storage for more than one month is a big problem in terms of costs. You can expect the higher rates.

When it comes to the fulfillment warehouse, never think of long-term storage. Treat it as a fulfillment place and ship your order on time. Otherwise, you’ll be in a greater loss.

● Lack of customization

A fulfillment center is all about the order fulfillment, not the storage. You can’t expect customized opportunities such as packages. It all relies more on you than the warehouse. Also, inventory flow is high. You can expect some negligence in the order flow as well. A fulfillment center may be a suitable place for order fulfillment, not customization.

5. Warehouse Vs Fulfillment Center

Fulfillment Center can be a different entity. We have evaluated the critical differences between the warehouse and the fulfillment center.

● Purpose

A third-party seller or shipping service takes time. Thinks of its goals and expectations. Then, consider the best option regarding the goal.

A warehouse is more about a resting place. Your products remain under monitoring, safe and will be there for extended durations. There is no concept of a one-month or two-month storage facility. There are no shipping services available either.

Fulfillment Center is all about order fulfillment. It is a place with high activity. That means your products must be ready to get delivered. It streamlines the business flow and keeps the storage for shorter periods as well.

● Long-term vs. short-term storage

What plans do you have? Long-term storage or short-term? Decide on your goals before jumping into a heavy discussion over both options. Let’s check out which one can be your hitman!

The warehouse is about storage for three months, six months, or a year. Some even go for two years or more—all thanks to excellent monitoring facilities. Moreover, inventory storage allows bigger benefits for the sellers selling products for years.

The Fulfillment Center is not a place for bigger visions. Get the products stored for less than one month. Ship them to the consumers as soon as possible.

● Operations

Business operations are the decision-makers at such a point. Quick or delayed? Now or late? Shipping or storing? Keep an eye on all the aspects.

Warehouses are static places. Their product loading, unloading, and storage occur. Once workers store pellets, they remain there until the removal of products occurs.

Fulfillment Centers are not mobile places where the continuous flow of inventory occurs.

• Products get stored.
• Shipping companies visit.
• Loading and unloading occur.
• Products get removed from warehouses and sent to customers.

It is the one-sentence story of the fulfillment center. Such scenarios occur every day, week, or month until new products replace the older ones. Monitoring occurs the same way as the warehouses.

● Frequency of orders and picking processes

Different Purposes can decide which option is the best. Now, we will have the comparison based on the order frequency and picking process.

Warehouses get one-off orders, and products get removed. Only a few sellers hire shipping services and get their products shipped monthly or weekly. Hence, the frequency of orders and picking processes are less in the warehouse.

In contrast, the scene is different from the fulfillment center. It receives a high number of orders. Product shipping occurs immediately. Companies are ready to pick up and pack orders. All the processes occur instantly and offer a perfect place.

● Safety options

Safety is all about the storage options, monitoring, and relevant aspects. It can not be an easy comparison. However, let’s find out which offers better safety.

Warehouses are the kingmaker in terms of safety. All credits go to their focus on storage. The safe storage of pellets occurs in the shelves and racks. Staff regularly monitors your packages and informs you of mishaps. Moreover, smart options further change and update the users. Therefore, warehouses are famous for storage.

Fulfillment centers have good security, but there is a problem. It is negligence. Daily turnover of products is high. Workers may be busy, and inventory stocks can be ignored. Chances of mishaps might be higher compared to the warehouses.

● Cost considerations

Cost is not a single factor to describe at such a point. It depends on your goals and storage period. For example, a fulfillment warehouse is cheaper than a warehouse if you store it for a week. For long-term storage, a warehouse turns out to be an affordable option. Let’s compare the costs between the two options.

For long-term storage, warehouses are a better option. If you get a chance for a public warehouse, it can be more affordable. However, a private warehouse is suitable for a 6-month storage period. Costs depend on the product dimensions. If the dimensions are high, costs increase. In a year or two of storage, prices also double up.

Fulfillment centers are less expensive for short-term storage and continuous shipping. If your products don’t get sold, ponder again. The fulfillment warehouse might exceed the costs of your budget. Define your goals properly before you land the hiring of a fulfillment warehouse.

 

Which one is the better option in the warehouse vs the fulfillment center?

Before you make a final decision, set the warehouse in comparison with a fulfillment center. Treat both from a business perspective.

Here are points showing the warehouse is a good choice.

• The warehouse is a better option for flexibility and storage.
• Consider a warehouse when you have long-term plans.

A fulfillment center can be a good choice in the following options.

• Your consumers reside in the same place where your warehouse must be.
• The aim is to speed up the shipping process and streamline the orders.

First, consider your goals and choose the option that suits your needs!

6. FAQs

1) What is better for long-term storage?

Warehouse comes on top. It is suitable for long-term storage because:

• The warehouse intends to store for extended periods.
• Inventory monitoring is reasonable.
• In the long term, it is far cheaper than any other storage option.
• API integration facility keeps your eyes on the stock.
• Order processing is also effective.

 

2) What storage method should I use for faster shipping?

A fulfillment warehouse is a better option for shipping opportunities. Here are the reasons:

• The supply chain gets strengthened.
• Shipment services are readily available.
• Inventory procurement, shipping, and monitoring are next level. You get all the luxuries in one place. Maybe it is the right time to work with a fulfillment warehouse.

 

3) Are fulfillment centers the same as the warehouse?

Fulfillment centers are similar in terms of structure except for the inventory flow. In the fulfillment centers, there is an active flow of products. Shipping, loading, and unloading occur in a short period. The warehouse is a dormant area where inventory storage occurs for months or years.

 

4) What is the best in between the fulfillment center and the warehouse?

It depends on your choice. For example, Suppose you want to ship products to a client in Louisiana. Find a fulfillment center for short-term storage until the products get shipped. For an extended period of storage, a warehouse is better. Working with a warehouse provides all the technicalities in one place.

Conclusion

Have you decided who can be your partner: a fulfillment center or a warehouse? Screen out all the aspects from:

• Storage
• Monitoring
• Streamlining business options
• Costs
• Purpose

Once you are sure of all these aspects, explore the pros and cons of each option. Make sure your warehouse or fulfillment center has an excellent area. 24/7 monitoring. And reimbursement facility in case of product losses or damages.