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Is a Fulfillment House the Same as a Fulfillment Center?

Looking for options for your ecommerce product needs?

You’re probably running into a lot of terms that may be new territory for you, especially if you’re just getting your product-based business off of the ground. Fulfillment house and fulfillment center are often used interchangeably – but they can actually be quite different.

As an independent business looking for help with picking, packing and shipping orders, here’s what you need to know:

A fulfillment center is a physical location where items are either manufactured or received, warehoused and shipped out to customers. Amazon’s fulfillment centers are a good example of how this process works. Customers order from Amazon.com, and then those orders are fulfilled through a dedicated fulfillment center. The staff at the fulfillment center relies on its warehouse management system (WMS) to be able to easily find, package and ship out orders to individual customers.

Not all ecommerce companies are as large as Amazon, so very few have the need to have multiple fulfillment centers around the country like they do. However, smaller ecommerce companies still need to be able to reliably fulfill and ship out orders from their websites. If a company is not large enough to support its own fulfillment center (or doesn’t want to deal with the hassles and costs related to doing so), working with a fulfillment house is the best option.

A fulfillment house is a third-party company that specializes in the process of fulfillment. A fulfillment company works with ecommerce businesses to help them get products out to customers.

The fulfillment house will:

  • Take deliveries of items from manufacturers on behalf of the ecommerce company.
  • Store those items until an order comes in.
  • Maintain and report on inventory counts as goods are sold.
  • Provide pick and pack services that will take the item from storage and pack them securely for shipment.
  • Ship out items to the end customer on behalf of the ecommerce company.

Outsourcing order fulfillment to an experienced fulfillment house is a smart move for several reasons. Fulfillment houses ensure that a critical part of the ecommerce process – order fulfillment – is taken care of professionally and efficiently. In addition, fulfillment houses can often help ecommerce companies save money on shipping and warehousing costs. Because the fulfillment house deals with thousands of items per month, and stores items for multiple companies, the shipping and storage costs per item is significantly lower than if a company tried to go it alone.

Fulfillment centers are great for mega-corporations. But for smaller ecommerce stores, a fulfillment house is the way to go.

 

January 20, 2015
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