Distribution Center vs Fulfillment Center: Understanding the Difference

You finally got your business up and running, uncovered your target audience, and started creating the products you’re advertising. But what about the most crucial part of the supply chain: getting the products to the buyers? Depending on the services you need and how you expect your customers to receive the items, business owners usually choose between distribution centers vs. fulfillment centers. 

Both centers act as warehouses, storing your goods until they can ship to their proper location. But while some speak of the two interchangeably, they couldn’t be more different. Below, Streamline Fulfillment, which offers nutraceutical fulfillment services, custom kitting, warehousing, and more, delves into the differences. 

Fulfillment Centers Shipping Directly to Consumers

Fulfillment centers fulfill orders according to the seller’s requirements and specifications. They first receive the inventory in secure pallets or cartons from the suppliers and scan them so the products show up in and are retrievable from the inventory management system. 

Since the seller must keep up with consumer demands, they pre-order products. This means they ship to the warehouse long before someone purchases them, and they remain on the shelves, sometimes for weeks, stored in optimal conditions. When a sale finally moves the product, the fulfillment center selects the shelved items based on the order and packages them with safety and security in mind. 

After printing out the shipping label, the fulfillment center provides the carrier (such as FedEx, USPS, or UPS) with the package and manages shipping and logistics until the package finally reaches the consumer’s front door. That includes overseeing order tracking and delivery updates. In some cases, fulfillment centers may also offer:

  • Kitting and assembly
  • Freight shipping
  • Cross-docking
  • Retailer replenishments 
  • Returns management

Distribution Centers Shipping to Other Businesses 

When considering distribution centers vs. fulfillment centers, the latter is in direct contact with the consumer, supplying them with products and acting as the supply chain’s last step. Distribution centers, however, spread goods to businesses like Walmart or Target so these stores can sell the products to customers like a middleman. 

Because distribution centers are key to redistributing products rather than order processing, they’re usually the second-to-last step in the supply chain, but this is far from the only difference.

While distribution centers also receive and store inventory like their counterparts, these central hubs only store for a short period to maintain inventory management efficiency. They must manage inventory among numerous retail channels so there’s a constant ingoing and outgoing of goods in bulk. Also, they usually reside near key market areas for quick delivery compared to fulfillment centers close to buyers. 

Although distribution centers don’t offer pick and pack fulfillment or provide kitting and assembly, they offer:

  • Freight shipping
  • Cross-docking
  • Just-in-time materials
  • Wholesale marketing 
  • Retailer replenishment 

Streamline Your Business Now!

At Streamline Fulfillment, we tailor our services and products to your unique needs so you always achieve customer satisfaction. Our third-party fulfillment and warehousing company is trustworthy, dedicated, and accurate. So, to learn more about distribution centers vs. fulfillment centers, what makes a successful business, or e-commerce integration, call (509) 888-2880 for a 15-minute consultation!

Schedule Your Consultation Today to Save Time and Money

While Shopify offers an excellent way for small business owners to get into the digital market and expand their networks, focusing on packing and shipping alongside increasing your customer base can be stressful.

Running a business takes a lot of time and money, and whether you want to streamline the process so you can focus on other crucial business components or save a drive to the post office, our team is ready to assist.

To schedule a consultation and discover how Streamline Fulfillment can help, give us a call today!