Warehouse Fulfillment Centers: Understand The Differences

E-commerce businesses today rely heavily on efficient storage and order fulfillment to meet customer demands. While warehouse fulfillment centers play a crucial role in this process, they differ significantly in terms of their function and service offerings. By understanding these distinctions, business owners can determine which type of facility aligns best with their operational strategy. This blog will walk you through the differences and help you navigate the choices.

1. What Is A Warehouse?

A warehouse is a huge, secure facility that stores raw materials and final products for extended periods. Often covering thousands of square feet, these buildings are designed with simplicity, offering a controlled space for inventory sorting and management.

An e commerce warehouse is integral to supply chain management, as it helps e-commerce businesses improve operational efficiency by providing a centralized space for receiving, sorting, storing, and dispatching goods, while also optimizing inventory levels.

When businesses experience lower sales volumes, warehouse offers a budget-friendly solution for storing goods long-term and managing inventory effectively. With flexible storage options such as bulk and pallet storage, warehouse can also divide larger quantities into smaller batches for more efficient distribution.

2. Common Types of Warehouses

There is a wide range of warehouse types, each created for different operational needs. These are some examples:

• Private warehouses: A warehouse facility that is either owned and operated by a company for its own exclusive use or managed by a third-party logistics (3PL) provider at specific 3PL warehouse locations on behalf of a client, also called a dedicated storage facility.
• Public warehouse: A shared storage facility, often managed and owned by a 3PL company, that accommodates multiple clients; also called a multi-client warehouse.
• Automated warehouse: This facility uses automation to streamline the storage, retrieval, and movement of goods, relying on systems that minimize or fully replace manual processes.
• Climate-controlled warehouse: A warehouse that features advanced systems for controlling temperature and moisture levels, specifically designed to maintain the integrity and quality of perishable items
• On-demand warehouse: A warehouse that provides businesses with adaptable storage options, offering temporary space to handle changes in stock levels and demand.
• Distribution center: A warehouse focused on the reception, storage, processing, and distribution of products, catering to wholesalers, retailers, or direct consumer sales.

3. What Are Fulfillment Centers?

As a central point in the supply chain, a fulfillment center is responsible for managing all logistics operations, such as order picking, processing, packaging, and delivery, to ensure products reach customers from the seller. Just like in warehousing, ecommerce businesses can either choose to operate their own fulfillment center or partner with a 3PL provider that runs the fulfillment facilities.

4. CommonTypes Of Fulfillment Centers

There are several types of fulfillment centers that offer different services:

Merchant fulfillment centers

These are fulfillment centers owned and operated by retailers to handle their own order fulfillment. Retailers maintain full control over warehouse operations, inventory and order delivery. However, owning a fulfillment center requires significant capital investment.

Merchant fulfillment centers make sense for large retailers with sufficient order volume. 

3PL fulfillment centers

3PL stands for third-party logistics. 3PL fulfillment centers are run by logistics companies and handle fulfillment operations on behalf of multiple clients. Retailers can outsource fulfillment to reduce costs and focus on core business.

3PLs provide e-commerce order processing as a service with flexible contracts. This is a popular option for small and medium e-commerce businesses.

Micro fulfillment centers

These are small, automated fulfillment centers located close to urban areas to enable fast last-mile delivery. They specialize in speedy fulfillment of online grocery and food orders.

Micro fulfillment centers hold limited inventory but can quickly assemble orders for 1-2 hour delivery to customers. They help large retailers match the convenience of local small businesses.

>>> Read more: How can 3PL e-commerce fulfillment empower your business in Japan?

5. Differences Between Warehouse And Fulfillment Center

Warehousing and fulfillment services differ mainly in their objectives: Warehouses concentrate on the bulk storage and organization of products, whereas fulfillment centers are built to manage and ship customer orders one by one. However, It’s worth exploring some of the specific factors that pinpoint ecommerce warehouse fulfillment differences on a deeper level.

Prolonged storage vs short-duration storage

The warehousing aspect of fulfillment centers is important, but the core objective is to quickly move inventory and fulfill customer orders. Keeping inventory in storage for more than a month can lead to high storage costs. Sellers need to store sufficient inventory to meet customer demand without accumulating surplus stock. 

Conversely, a warehouse, or on-demand warehousing service, primarily serves the purpose of long-term product storage.

Operations

Warehouses are mostly passive, focused mainly on receiving goods or transferring them out to other destinations.

Fulfillment centers differ in that they are lively, fast-moving facilities that carry out a variety of complex tasks. These centers are managed by fulfillment partners, who provide services like:

• Receiving goods, conducting quality checks, and storing them appropriately
• Creating product lists and gathering the selected items
• Combining products and preparing them for shipment
• Packing boxes
• Assigning labels to shipments
• Delivery
• Overseeing the returns procedure

Frequency of pickups by logistics providers

Fulfillment companies often partner with different logistics providers to ensure smooth operations. With daily collection of packages, they can fulfill DTC orders promptly, ensuring customers receive their deliveries as expected.

Shipping carriers’ pickup schedules are based on the fulfillment services a company offers. For customers opting for same-day or next-day delivery, carriers might need to collect orders at specific times during the day. Other carriers offer services that operate on a regular pickup schedule, handling both local and international shipments. Retail fulfillment companies generally set deadlines for placing orders to ensure same-day fulfillment.

Unlike fulfillment centers, warehouses typically have scheduled, less frequent pickups, since it’s more affordable to ship freight on pallets with grouped items, instead of generating separate labels for each individual package.

Due to the practice of consolidating goods from different pickup locations for Partial-truckload and Less-than-truckload shipments, freight companies may cause delays in both pickup and delivery. Merchants should consider this and allow extra time for the process from prep to pickup.

6. How Do Fulfillment Centers Operate?

Fulfillment centers serve as a temporary storage point for an ecommerce business’s inventory. Once a customer completes an order, the items are picked from storage, packed into boxes or mailers, and labeled for shipping. The labeled packages are then collected by last-mile carriers and delivered to the customer’s address.

A fulfillment center processes both business-to-business (B2B) orders, which generally involve sending a large volume of goods to retail giants, and direct-to-consumers (DTC) orders, where products are dispatched directly to individual consumers, usually to their doorsteps.

When ecommerce fulfillment is outsourced, the e-commerce fulfillment center manages all aspects of the fulfillment process for the seller, from overseeing inventory to securing competitive shipping rates.

Handing over order fulfillment to a fulfillment professional helps sellers better manage their stock, provide superior customer service, and gain more time to focus on the strategic growth of their business.

7. 4 Major Benefits Of Using A Fulfilment Service Centre

The following highlights some of the major benefits that come with using a professional fulfillment center for online sellers.

Get rid of the hassle of storing inventory and packing shipments

The logistics of maintaining a storage space are often costly, labor-intensive, and time-consuming. That's why numerous e-commerce businesses look for ways to avoid the headaches associated with inventory storage and warehouse management.

Warehouse fulfillment centers are the perfect alternative if you want to skip the daily routine of packing boxes and going to the post office. With the ability to store large quantities of inventory, fulfillment providers ensure your storage needs are met. Plus, as your business grows, they can scale their services to handle higher volumes of orders without any issues.

Concentrate on the long-term objectives

Packing and shipping customer orders is essential but can be outsourced with ease. Online business owners and entrepreneurs have numerous responsibilities and should prioritize activities that only they can perform, ensuring their time is spent on scaling their business and maximizing profits.

By entrusting order fulfillment to a third-party provider, you free yourself from operational tasks and gain more time to focus on key areas like marketing, product management, and customer service. This enables your ecommerce business to take a more strategic approach. Partnering with professional warehouse fulfillment centers allows sellers to proactively grow their business.

Rely on the professionals

Navigating inbound and outbound logistics may be difficult, but fulfillment centers are designed to tackle these complexities. From processing orders and overseeing inventory to anticipating peak shopping periods, these experts are well-equipped with the knowledge and experience to handle all aspects of the process.

A fulfillment center’s capacity to handle fulfillment tasks for numerous online businesses and dispatch millions of orders consistently makes them a highly experienced and strategic partner. From negotiating better shipping rates with carriers to strategically positioning and sizing their warehouse fulfillment centers, fulfillment companies create efficiencies that benefit the e-commerce businesses they serve.

Automate inventory management and shipping processes

Today’s fulfillment companies rely heavily on technology to streamline their processes. Real-time tracking and documentation of each stage in the fulfillment journey ensures that ecommerce businesses can stay updated on their inventory and orders from anywhere, without needing physical presence.

The efficiency of this process relies on fulfillment systems that integrate with ecommerce marketplaces and platforms. This connection ensures that customer orders are automatically forwarded to the fulfillment center for packing and shipping. After shipping, the tracking information is sent back to the ecommerce shop and made available to the customer.

>>> Read more: Why your business needs a product fulfillment center in Japan?

8. Why choose Ezbuy Japan for warehouse fulfillment service

At Ezbuy Japan, we pride ourselves on our technological prowess. Our state-of-the-art warehouse management software ensures that your inventory is managed with precision and accuracy. This means fewer errors, faster order processing, and happier customers.

But it's not just about technology; it's about people too. Our team of dedicated and professional staff is committed to providing you with top-notch service. We understand that your business is unique, and we tailor our fulfillment solutions to meet your specific needs.

9. How Ezbuy Japan balances cost, accuracy and effectiveness for your business 

Ezbuy Japan strikes a careful balance between cost, accuracy, and effectiveness to ensure that your business benefits in multiple ways:

• Cost-efficiency: Ezbuy Japan understands the importance of cost control for businesses of all sizes. We offer competitive pricing structures and flexible fulfillment solutions that can be tailored to your specific needs. By optimizing our operations and leveraging technology, we help you reduce overhead costs associated with warehousing, labor, and shipping.
• Accuracy: Accuracy is paramount in fulfillment, as it directly impacts customer satisfaction and your reputation. Our advanced warehouse management system and rigorous quality control processes ensure that orders are picked, packed, and shipped accurately. This minimizes costly errors, such as shipping the wrong products or incorrect quantities, which can lead to returns and customer complaints.
• Effectiveness: Ezbuy Japan is committed to delivering effective fulfillment services that meet your business goals. We focus on streamlining processes and optimizing workflows to ensure that orders are processed quickly and efficiently. This means your customers receive their orders on time, enhancing their overall experience and loyalty to your brand.

By carefully managing these factors, Ezbuy Japan ensures that your business benefits from cost-effective, accurate, and efficient fulfillment services. We understand that each business is unique, and we work closely with you to tailor our solutions to your specific needs, helping you achieve your operational and financial objectives.

With Ezbuy Japan’s scale, infrastructure and e-commerce expertise, retailers can focus on sales and marketing while optimizing fulfillment. You benefit from our technology, network and buying power across Asia. 

10. FAQs

10.1. What Is A Fulfillment Center Warehouse?

A fulfillment center warehouse, or a fulfillment warehouse, which is another name for “a fulfillment center”, differs significantly from a standard warehouse. It’s crucial to understand warehouse fulfillment services differences. A warehouse is typically used for storing products, while a fulfillment center is equipped to handle various tasks, including inventory control and order processing, in addition to storage.

10.2. Are fulfillment centers responsible for managing inventory?

Yes. When inventory arrives, warehouse fulfillment centers sort products and store them in specific locations, whether on shelves, bins, or pallets, and keep tabs on the stock. The center’s goal is to quickly rotate inventory and ensure prompt order fulfillment.

A majority of warehouse fulfillment centers equip ecommerce companies with technology to track inventory from anywhere, including systems that help monitor stock and send alerts when products need to be reordered to avoid running out.

10.3. Do fulfillment centers offer global shipping?

Yes. Several warehouse fulfillment centers are equipped to manage global shipping, guiding you through the challenges of customs, shipping expenses, and the regulations associated with international delivery.

11. Conclusion

To sum up, while warehouse fulfillment centers are essential to modern supply chain management, their functions vary greatly. By understanding the nuances between these two options, you can make a more informed decision that enhances your inventory management, reduces costs, and boosts customer satisfaction. 

Ezbuy Japan's fulfillment service is a reliable and cost-effective solution for businesses looking to streamline their order processing and inventory management in Japan. With our state-of-the-art warehouse facility in Japan, cutting-edge technology, and experienced team of professionals, we are able to provide accurate, fast, and scalable fulfillment services to our clients. 

By partnering with us, you can focus on growing your business while we take care of the rest. We are dedicated to providing exceptional customer service and helping our clients achieve their ecommerce goals. Our team is committed to ensuring that your orders are processed accurately, efficiently, and delivered on time. If you have any questions or would like to learn more about our services, please do not hesitate to connect us.  Contact us today to discuss how we can help you achieve your ecommerce fulfillment goals.

Website: https://ezbuy.jp