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:
The seller places their inventory in the fulfillment center
A customer completes a purchase online
Order information is treanferred to the fulfillment center
The inventory is picked and the order is packed
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
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