Did you know that warehouses are one of the largest employment industries in the country? There are over 2 million Americans who work in warehouses; sharing and storing products for companies.

For outstanding success, choose the right facility management services for your warehouse. With proper planning, you can ensure your company can fulfill and distribute orders without issue.

Before you get started in the world of logistics and distribution, you’ll have to choose the right center. So what are the differences between a fulfillment center vs distribution center?

Read on to learn more about the differences between the two.

What Is a Fulfillment Center?

A fulfillment center is a type of warehouse to store, pack, and ship items for online businesses. These facilities provide a high level of efficiency and accuracy in fulfilling orders. Many e-commerce businesses use fulfillment centers and see here to outsource their shipping and handling needs.

What Is a Distribution Center?

A distribution center is a facility where products and materials are received and stored. They then redistributed these products to authorized locations.

Retailers often have distribution centers to which they send products for storage. And from which they have the products shipped when needed.

A distribution center can be a warehouse or a cross-dock facility. A warehouse is a building in which they store products and materials.

While the cross-dock facility is a location where goods from one set of trucks are being received. Then these goods are loaded onto another set of trucks for distribution.

The Key Differences Between Fulfillment and Distribution Centers

Fulfillment centers get to focus on completing customer orders. Yet, distribution centers are for storing and shipping products. As a result, fulfillment centers tend to be smaller and have more employees than distribution centers.

Here are some other key differences between the two:

Location

Fulfillment centers and distribution centers can differ in their location. Fulfillment centers are near population centers so they can easily ship orders to customers.

Distribution centers are near transportation hubs. With this location, they can ship products to retailers at ease.

Also, distribution centers are near major transportation hubs like highways or railways. While fulfillment centers are located anywhere that is convenient for the company.

For example, Amazon has fulfillment centers near major cities. With this, they can ship out orders to customers faster.

Distribution centers serve a larger geographic area than fulfillment centers.

Services Offered

There are a few key differences between the two in the services they offer. Distribution centers are larger in size and offer a wider range of services than fulfillment centers.

Distribution centers are also more specialized. They focus on either distributing finished goods or goods in raw materials form.

Fulfillment centers offer a higher level of customer service. This includes features like order picking and packing, shipping, and returns processing.

Storage

The difference can be quite confusing because both types of centers offer storage services. Yet, fulfillment centers have a more limited inventory. They focus only on outbound shipping.

Also, a fulfillment center is a type of storage facility that stores products that are ready to send to customers. They ran this type of facility by a third-party logistics provider (3PL) to store products for e-commerce businesses.

A distribution center, while also providing storage and shipping services, receives inbound shipments. And may even provide some manufacturing or assembly services. It is a type of storage facility to store products that are ready to be shipped to retailers.

This type of facility is normally run by a manufacturer or a wholesaler.

Shipping Methods

A fulfillment center is a facility that ships products on behalf of a company. A distribution center is a facility that ships products for a company’s own use.

There are several key differences between fulfillment centers and distribution centers in shipping. Fulfillment centers ship orders for many customers. While distribution centers ship orders for a single customer (the company itself).

As a result, fulfillment centers have more stringent shipping requirements. These include the least order size and lead time.

Also, in fulfillment centers, customers order smaller quantities of items and they need to get them shipped faster. Because of this, they use a variety of shipping methods. Including air shipping, to get products to customers.

Distribution centers, on the other hand, often have more flexibility in terms of shipping. Since they are only shipping products to one customer.

Distribution Centers are being used by businesses that sell to retailers.
Retailers order larger quantities of products. They can afford to wait a bit longer for their products.

Because of this, Distribution Centers use ground shipping. This is because it is cheaper, but takes longer.

Cost

There are a few key differences between fulfillment centers and distribution centers in cost. Fulfillment centers are more expensive to operate than distribution centers. This is because they need more capital investment in inventory, labor, and technology.

Additionally, fulfillment centers have higher operating costs. This includes the need for staff and training employees to pick, pack, and ship orders. Yet, these increased costs are offset by the increased revenue from online sales.

In contrast, a distribution center is focused primarily on receiving and storing inventory. As a result, distribution centers are generally more cost-effective. For companies that have large volumes of inventory, but relatively few orders.

The Type of Products Stored

Fulfillment centers, store and ship smaller items such as clothes, books, and cosmetics. They have high ceilings, many floors, and use mezzanines and conveyor belts to increase efficiency.

Distribution centers are much larger to store and ship larger items. These items include furniture, appliances, and electronics. They have lower ceilings, and use pallets and lift trucks to move merchandise.

Choose Your Service Provider: Fulfillment Center vs Distribution Center

There are differences between a fulfillment center vs distribution center. The fulfillment center is being used to store and ship products to customers. While a distribution center is being used to store products and ship them to retailers.

They also differ in their locations, services offered, storage, shipping method, cost, and type of products stored. So, if you’re an e-commerce business, you’ll want to use a fulfillment center. And if you have a brick-and-mortar business, you’ll want to use a distribution center.

If this article helped you learn the difference between the two, check out more related articles on our website.