September 27, 2019 warehousing
The insurgence of online shopping has forever changed our experience with buying, selling, and advertising. If you follow industry news, it shouldn’t surprise you that Jeff Bezos, the founder of Amazon, is worth over 150 billion dollars, mostly thanks to online commerce.
As this industry continues to grow and change our lives in different ways, the infrastructure required to support it also evolves. You may have heard of something called a fulfillment center.
But do you know the difference between warehouse and fulfillment services? Keep reading to learn everything you’ve ever wanted to know!
The Lure of Online Shopping
It seems like magic. You type some words and press some buttons on your computer or mobile device and -voilá- your clothing, video games, groceries, or whatever you ordered just appears at your door. Nothing beats it.
No more driving around wasting precious fuel and time. Forget about looking for parking and waiting in line at the mall. Who has time for any of that?
Thankfully, we can easily buy and sell whatever we need thanks to the multiple websites that make this possible. But let’s look at the people that truly make this industry tick.
What Makes It Possible?
Like all industries, online retail companies rely on real people to make things work. This includes drivers, package handlers, clerks, accountants, and many other types of laborers.
In contrast to brick and mortar stores, there is less a need for salespersons since the goods are advertised and sold on a website. However, there is a great need for workers to cover logistics. Many of these work at places called fulfillment centers.
What Are Fulfillment Centers?
If you’re unfamiliar with the term, you would be forgiven for thinking that they are places where Taoist monks obtain enlightenment or something along those lines.
However, online orders are what is being fulfilled here. Most goods that are purchased online likely came through one of these places to be packaged and then shipped towards their final destinations. Millions of dollars of products pass through these centers.
Amazon alone accounts for about 75 of these centers across North America. It takes well over 100,000 people to operate these centers. They account for the vast majority of all the people employed by Amazon.
Warehousing and Fulfillment Centers
The truth of the matter is, no matter how sophisticated the technology used by the online retail industry is, there is always going to be a need for storage and logistics.
Is a fulfillment center just a fancy way of saying ‘warehouse’? Although they share certain similarities, they do not serve exactly the same purpose. Let’s take a look at their origins and what it is that sets them apart from common warehouses.
History
Online shopping really began to catch on amongst the general public towards the end of the 90s and the early 2000s. However, online commerce truly began much earlier.
Towards the end of the 80s, industry movers realized the need for packing and distribution centers to deal with the demand for such a rapidly growing industry.
Being part of a new and innovative industry, it became apparent that a new phrase would be appropriate to most accurately describe it. Since it was a place where orders were fulfilled, ‘fulfillment center’ made sense and quickly caught on throughout North America.
Warehousing Solutions
Many companies offer what is known as product warehousing solutions. When large amounts of good and/or material needs to be stored for longer periods of time, it makes sense to utilize the services of a warehouse.
Companies often pay to lease space in a warehouse. This could be measured in square footage or by the number of containers required.
Retailers that utilize these services can choose to keep a certain portion of there inventory in these types of spaces and another part of it in their shop. They can always add or take away from the storage.
How Are Warehouses and Fulfillment Centers Different?
At first glance, they appear to be large buildings filled with people moving and storing big containers and boxes. They are similar in that sense. They are both used to accommodate massive amounts of goods and equipment.
The main difference between warehousing and fulfillment services is that the latter is constantly mobilizing the goods it handles. Also, fulfillment centers have to deal with endless returns.
This means that, in a fulfillment center, the products are not meant to be stored for extended periods of time. This is because their shelves are always being stocked and then shipped to the customers.
How Do Fulfillment Centers Work?
There is currently a massive demand for fulfillment services. This requires a large number of resources, technology, and, most importantly, plenty of people that can make everything possible.
It is a constantly evolving industry that continues to advance along with other fields. Robots have often been used and experts speculate they will revolutionize the industry.
They say it takes a village to deliver a package. The centers have to work with people in many other industries. They depend on reliable courier services to ensure that the products make it from the centers to wherever they need to go.
Order With Confidence!
Fulfillment centers and warehouses are both vital to the world of commerce. The way we use the internet continues to evolve, but the need for these types of services will remain. However, it is important to know that a fulfillment center is actually quite different from a warehouse.
Looking for a courier service that delivers? Get in touch with us to learn more!