Fulfillment Center vs Warehouse: The Ultimate Guide
What is the difference between a fulfillment center and a warehouse? You’re not the first person to ask this question. These two contributions to supply chain management are very similar. So what separates the two? It’s relatively simple, fulfillment centers are warehouses that offer additional logistical services.
According to IBIS World, “there are 3,057,408 Transportation and Warehousing businesses in the US as of 2022”. These businesses range from a small eCommerce retailer to a large 3PL business that handles customer order fulfillment needs for large companies, like BR Printers.
Whether you’re just curious about the difference between fulfillment centers and warehouses or you’re searching for a warehousing solution for your business, this blog should clear up all of your confusion. If you have more questions about fulfillment, contact us today!
What is a Warehouse?
Warehouses are simply a location where goods are stored. Picture this, you’ve started building and selling your own furniture. As your business gets more successful, demand increases and so does your inventory. You’ll need to package and store your furniture before it gets sent off to your customers. Where will you keep your furniture? In a warehouse. You have a few options: rent a whole warehouse, purchase a whole warehouse, or rent a small portion of some else’s warehouse. That’s the easy part. Once your business grows to the point where you can handle storing, picking, packing, shipping, and returns on your own, you typically turn to a fulfillment center.
What is a Fulfillment Center?
Fulfillment centers are fully staffed warehouses with industry relationships, expertise, and technology. Supply chain management issues are common in growing businesses, like the hypothetical furniture business above. Fulfillment centers were created to solve these logistical challenges by handling receiving, storing, picking, packaging, shipping, and returns for businesses. If you’d like to learn more about what fulfillment centers do, check out our related article.
Fulfillment Center vs Warehouse
This comparison isn’t a question of which customer order fulfillment process is the best, it’s about which option best suits a business’s needs. Looking for a warehousing solution? Check out the benefits of warehouses and fulfillment centers below to assess your business needs.
Benefits of Warehousing
Warehousing gives businesses the ability to be hands-on, benefits taxes, and can serve as another revenue stream.
The Ability to be Hands-On
By renting or owning a fulfillment warehouse, businesses have more control over fulfillment operations. Warehouse owners and renters can be hands-on with employees, inventory, and organization.
Tax Benefits
When a business purchases a traditional warehouse space, they acquire a piece of commercial real estate. This is very beneficial for tax purposes.
Another Stream of Revenue
By owning a fulfillment warehouse, there is an opportunity to rent out unused warehouse space to other businesses. This second stream of revenue is a great way to support the warehouse cost.
Benefits of Fulfillment Centers
Choosing to outsource fulfillment is a strategic decision for businesses looking to maximize budget and efficiency in the long run. There are many benefits to outsourcing 3PL and fulfillment, but below we’ll cover three major benefits.
Faster Order to Shipment Turn Times
Since 3PL providers can operate multiple fulfillment centers, they have a national footprint that can speed up shipment turnaround times. Fulfillment centers also have the technology and industry relationships that can drive down the overall shipping cost and speed up the receipt of orders, product pulls, kitting, fulfillment, and shipment.
IT Capabilities
Large fulfillment warehouse operations require a lot of hardware and software to ensure it runs smoothly. When partnered with a fulfillment service center, businesses don’t have to purchase physical hardware, servers, or software subscriptions.
Reduce Internal Stress
When businesses partner with an experienced fulfillment service center, they don’t have to stress about whether their packages are going to be on time, if there’s space to hold inventory, or how returns will be handled. This frees up time for so many other important tasks.
Interested in a Fulfillment Center?
Conducting your own fulfillment can be a very expensive undertaking. The costs of security, labor, rent, materials, logistics—among other things will drain resources for your core business operations. These problems have driven businesses to put that capital into a 3PL partnership that offers more value.
BR Printers started as an educational and trade printer in San Jose, CA but now we’ve diversified our capabilites and national footprint. We’re happy to be based in San Jose, CA with facilities in San Diego, CA, Denver, CO, Appleton, WI, Cincinnati, OH, and Independence, KY, BR is now a provider of high quality large format printing, commercial printing, labels, marketing, value chain, and logistics management to marketers and the publishing industry’s most recognizable names.
Our fulfillment centers are expanding. The talented 3PL team at BR Denver is ready to build you a fulfillment solution that delights your customers and saves you time, internal resources, and money. Contact BR today!