Warehouse vs. Fulfillment Centre: What's the Difference?

The terms warehouse and fulfillment centre are often thought of as one and the same and used interchangeably. While they are both considered buildings that house vast amounts of product and inventory, as supply chain and logistics solutions, they do not necessarily function the same.

So let’s learn a bit more about what each does in the context of supply chain and logistics and review their key differences.

What is a Warehousing Solution?

As you can guess, a warehouse itself is a large building filled with vast amounts of product. Warehousing solutions are used to store product inventory.

In terms of occupying a warehouse, some are leased by small and medium-sized businesses while large companies will often own their own warehouse to hold surplus inventory. E-commerce businesses may opt to rent part of a space within a warehouse along with other sellers. Logistics service providers like Envoy operate in this way while also providing competitive shipping rates and mailing and finishing services.

This is important given that the price of leasing and renting warehouse space has been on the rise in the last few years. Thanks to a boom in demand and the resulting construction for expansion, costs are projected to keep going up.

What is a Fulfillment Centre?

Similar to a warehouse, a fulfillment centre also houses product and inventory – but it is more than just a storage facility.

A fulfillment centre is a functioning part of the supply chain that encompasses all parts of the e-commerce fulfillment process, i.e. all the steps between a customer placing an order and receiving that order. In other words, a fulfillment centre is considered the logistics hub.

It handles all aspects of order fulfillment, from picking to processing and packing to shipping. By having fulfillment centres holding stock in strategic locations close to customers, e-commerce companies are able to fill orders fast.

Third-party logistics (3PL) providers such as Envoy offer the use of fulfillment centers to businesses wishing to optimize their logistics operations and get orders to customers quickly. By managing fulfillment on behalf of e-commerce companies and negotiating shipping rates, 3PL partners are able to save their clients valuable time and money.

What’s the difference?

While warehousing is part of the fulfillment process and both are meant to hold inventory, there are differences between the two:

  1. Inventory. Fulfillment centres are not meant to hold inventory for very long, unlike warehousing solutions, which are intended more as a storage option. Fulfillment centres exist for inventory turnover – to ship products to customers quickly and efficiently while replenishing stock based on demand.

  2. Shipping schedules. Because fulfillment centres are intended to quickly move product out the door and into the hands of consumers, they have a steady stream of shippers arriving to collect items for delivery. Warehouses, on the other hand, prefer to have items shipped in bulk via freight, so they will have scheduled shipment pick-ups that are less frequent.

  3. Static vs. dynamic operations. By being a place meant to simply receive, store and transfer inventory, warehouses are more static in their operations, whereas fulfillment centres are bustling hubs of movement and process. Their complex operation as part of the supply chain means more services are carried out, such as receiving, kitting and assembly, labelling, picking and packing, shipping and returns.

By understanding the differences between a warehouse and a fulfillment centre, you can see the purpose (and benefits) of each. Depending on your business, you may require using both!

Look to the 3PL experts at Envoy to manage all your warehousing and fulfillment needs!

At Envoy Warehousing and Logistics, we strive to ensure that, whether it’s warehousing, fulfillment or more, you have the professional services of a 3PL partner who understands your business’ needs.

To learn more about how Envoy can leverage its industry-leading experience in logistics across Canada and the U.S. to become your trusted 3PL partner, contact us today or get a quote.

Have a question about our pricing? We offer cost-effective and transparent pricing.

Call: 1-905-831-0006