Fulfillment Center vs. Distribution Center: What’s the difference?

Choosing between a fulfillment and distribution center is a rite of passage when it comes to online business. Once you have set up your e-commerce website, you need to consider how your customers will get their orders.

You have to decide between these two warehouse options: fulfillment centers and distribution centers. These two terms may be used interchangeably when it comes to shipping and logistics, but they can mean different things depending on the circumstances.

The type of business you are running plays an important role in choosing between a fulfillment and distribution center. A B2B (business to business) company has different needs than a B2C (business to customer) company, and this will affect your choice.

Right now, these terms may not mean much to you, but in this article, you will learn the meaning of each and what is best for your business.

What is a fulfillment center?

A fulfillment center is a third-party logistics facility that receives, processes, and completes an order from your e-commerce site. It handles all the shipping-related work for you. As a business owner, you can choose to review and receive goods before sending them off to a fulfillment center for delivery. Or, you can let the fulfillment center do it all for you.

Fulfillment centers focus on B2C (business to customer) companies and efficiently cater to small and medium-sized businesses. They strategically store products for sellers and quickly process and deliver goods to the end customers.

A fulfillment center like NextSmartShip might be the perfect logistics company to cater to your business needs. Here is why.

Pros of fulfillment centers

Custom Packaging

Fulfillment centers provide custom packaging services for business owners. They can package your orders with your logo and brand colors. Forget blank envelopes or boxes and add a personal card in packages in order to build customer relationships.   

Kitting and Assembly

Kitting is a process of putting individual items into one big package to make shipping easier. Fulfillment centers can combine products meant to be delivered to the same location into one box. This helps to clear long-term stock and ease delivery costs.

automated inventory management

Distribution centers run on automated inventory management systems. This approach lets you monitor inventory and SKUs from a centralized dashboard in real time. Consequently, it’s easy for you to manage your operations

Fast shipping

Fulfillment centers can cater to your individual shipping needs. NextSmartShip, for example, offers fast shipping services and can deliver your products in as little as two days. The company has global fulfillment centers in China, the USA, Europe, and Australia. 

Bulk shipping

Fulfillment centers facilitate bulk shipping. These centers are adept at packaging and shipping large shipments of products. This way, you can save up on shipping fees.

Experts handle your statistics

As a business owner, you needn’t worry too much about keeping track of shipping related statistics. In fulfillment centers, experienced staff track your inventory. They also use innovative technologies to automate and streamline the entire process.

Cons of fulfillment centers

Cost of holding prices

Fulfillment centers aim to keep products constantly flowing in and out of their warehouses. If products remain in the fulfillment center for too long, they are subject to a fee.

Note: NextSmartShip provides ninety days of free storage, so you’ll have the freedom to sell your merchandise without having to pay hefty fees. However, after that time period, you will need to pay for holding if your products are still in the warehouse.

What is a distribution center?

A distribution center is a facility where stock is stored before being distributed to resellers, wholesalers, or directly to customers. They supply to multiple resellers in their vicinity.

Distribution centers focus on short-term storage and are customer-centric because they focus on making sure packages reach their wholesale or retail customers. They are the middleman between suppliers and their customers. Distribution centers focus mainly on B2B (business to business) ventures.

A distribution center might be the perfect fit for your business. Here’s why.

Pros of distribution centers

Scalability

Distribution centers improve scalability in businesses. Your business is assured of extra space for growing demands from customers. You can easily store their extra inventory.

Use of technology for efficiency

Distribution centers are equipped with the latest technology. They adapt to huge orders by mechanizing delivery procedures and using technology to make things faster and more efficient.

Cons of distribution centers

Fewer services provided

Distribution centers provide a limited range of services to their customers compared to fulfillment centers. They only act as a bridge between the supplier and the customer. They may ship directly to your customer, but they do not provide custom packaging, kitting and assembly, and fast shipping.

Longer time taken for delivery

Distribution centers take longer to process their deliveries. This is because they tend to ship in bulk. They ship orders less frequently to save costs. If you require your order to be shipped in two days, a distribution center is not the right center for that.

Contact NextSmartShip for Fulfillment Services

Fulfillment centers and distribution centers both want to get deliveries to their customers as soon as possible. A business’s needs are the deciding factor when choosing between distribution and fulfillment centers.

A fulfillment center is a better fit when it comes to a small business that runs on delivering online orders to customers. For a small business, fulfillment centers provide custom packaging, kitting and assembly, customer service, and deliver packages directly to the end customer’s doorstep.

For a bigger business that does a lot of bulk shipping, a distribution center can provide logistic services and heavy package handling. Distribution centers work for bigger companies dealing with B2B (Business to Business) operations.  Choosing the right logistics company for your business can take care of all your shipping needs and positively impact your customer relationships. That’s where NextSmartShip comes in. The company helps small to medium-sized companies boost their business through high-quality fulfillment services.

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