In these times of booming e-commerce and growing demands for faster deliveries everybody seems to be talking about fulfillment centers. But what is a fulfillment center, really? Is it just fancy word for a warehouse – or something completely different? Let’s sort it out, shall we?

WHAT IS A FULFILLMENT CENTER?

Yes, on the surface a fulfillment center is “just a warehouse”. It is a physical space where products are received, stored, picked, packed and shipped. The difference is in the way it is managed. A fulfillment center is generally run by a provider of third party logistics (3PL) offering their services and space to companies who want help with their last mile logistics

WHAT DOES A FULFILMENT CENTER DO?

The operations in a fulfillment center is centered around the so called order fulfillment process, to retailers or directly to the consumer. The steps can be described as:

  1. The seller places their inventory in the fulfillment center
  2. A customer completes a purchase online
  3. Order information is treanferred to the fulfillment center
  4. The inventory is picked and the order is packed
  5. The order is labeled and shipped

It is also common for a fulfillment center to offer additional services as part of the warehouse process, so call Value Added Services (VaS). A few examples are gift wrapping, assembly, or adding a thank you note or offer in the package.

WHAT ARE THE BENEFITS OF USING A FULFILLMENT CENTER?

Using an external fulfillment center as a part of your logistics process have several advantages, especially for smaller e-commerce companies. Here are some of them:

  • Avoiding time-consuming picking and packing
  • More time to foucs on marketing and business strategy
  • Makes your business easy to scale
  • No contracts for warehouse space and employees
  • Utilising the knowledge of logistics experts
  • No investments in warehouse tech or automation

WANT TO LEARN MORE?

Learn more about the best ways to achieve fast reliable and sustainable last mile service in on our blog post Empower your warehouse and make the last mile shorter”. Read the blog post here.

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