The Pros and Cons of Using a Fulfillment Center For Your Business

If you've never heard of a fulfillment center, don't worry. There's no shortage of people who get that confused. In fact, many people have no idea what the term even means. In simple terms, fulfillment center refers to a warehouse that specializes in shipping products to customers. The term has come to be synonymous with shipping, which is why many business owners and entrepreneurs tend to call it by this common term.

Fulfillment warehouse and fulfillment center are, of course, modern terms for a specialized packing and distribution warehouse. The two words have been coined from the mid-1990s, and so far, "distribution center" is most often used about an internal packing and distribution department. But in truth, both terms could be used to refer to the same thing, just with different words. Some confusion occurs, perhaps, because either term can refer to the same location. The warehouse with which your goods are packed and distributed may well be a fulfillment center, just located within your distribution center.

For most businesses and entrepreneurs, however, the term fulfillment center refers to a remote warehouse that specializes in shipping to a single destination. This type of distribution facility offers a large variety of services tailored to the unique needs of your company or business. Some distribution centers are capable of handling all of your business needs. Others specialize in specific products or regions. Still others may only provide distribution services for a select number of small businesses or products.

So what types of products and customers can you ship to a fulfillment center? There are literally thousands of products that can be shipped to a fulfillment center, and this virtually unlimited selection leads to the question of what kinds of services you should expect. If you're a small retailer with one store location, for example, you probably don't need to worry about how you pack or distribute your products to your customers. Instead, you should simply focus on how you store those products until they are ready to be sold. Many fulfillment centers can handle all aspects of storing and transporting inventory to your customers. They may even have the equipment, storage facilities, and staff necessary to move inventory between your various locations.

As an alternative to managing inventory at your own facility, some fulfillment centers offer their customers the opportunity to purchase online. Fulfillment centers that offer online stores are very popular among online stores and retailers, as they can offer a wide selection of products that can be displayed on the web page and delivered to your customers via a regular mail service, email, or CD. This flexibility of delivering products to your customers is a great convenience for many business owners and allows them to expand their business with minimal additional investment. You won't be limited by space and employee numbers when you choose to operate an online store. Many fulfillment centers can even ship products directly from your warehouses, so you won't even need a storefront or employees to manage the storefront or shipping. Rather, all of these functions are performed by the same fulfillment center, which will handle everything from receiving the order to the delivery of your products to your customers.

Another aspect of the fulfillment process that is often overlooked is the distribution process. You can choose a fulfillment process that either delivers directly to the customer or stores the products at another location until you receive an order. If you want to offer your customers the opportunity to view your products before purchasing them, you can ship the items to a distribution center before your customers do. On the other hand, if you want to ensure that your products are available to your customers as soon as possible, you can warehouse the products until you receive an order.

A well-run warehousing company will offer both options to their clients. The advantage to having both options is that you can maximize the efficiency of your warehouse by ensuring that your warehouses are well-stocked with the items that you're looking to sell and that you are able to receive an immediate order once you have fulfilled all of your orders. When you utilize a fulfillment center, you can cut the time needed for shipping and storage while you focus more time and attention on your customers.

One of the main cons of utilizing a fulfillment center is the cost. While it is true that you may have to pay a higher price for warehouse space than you would for traditional retail stores, you should remember that the space will be used for products that you sell. If you are seeing a significant amount of profit from every sale you make, then the additional cost of renting warehouse space should not be a problem. Most of these warehouses offer competitive prices and allow you to obtain full flexibility when it comes to the number of items that you sell and when. In the end, whether you decide to purchase your inventory on consignment or warehouse your own products, you will still have the same level of income because you have chosen to warehouse your own products instead of selling them on consignment.