Fulfillment Center vs Distribution Center: What’s the Difference?

Order fulfillment is the core part of e-commerce. Before choosing a fulfillment center and a distribution center as part of your e-commerce supply chain, you should be aware of the difference between the two.

As e-commerce becomes more prosperous, more and more consumers choose to purchase large items online, resulting in an increasing demand for warehouse space. According to data from the CBRE Group, the availability of industrial real estate in the United States is only 7%. Warehouse space in high-demand areas close to the city center is particularly narrow.

At the same time, CBRE data also shows that 1.25 million square feet of warehouse space are required for every $1 billion in e-commerce sales.

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Explanation of the fulfillment center

The fulfillment center is a warehouse for e-commerce fulfillment services. Your company’s products are shipped to the distribution center in the form of containers or pallets. The warehouse will store your products until they are sold. The fulfillment center is the final destination of your products before they shipped to consumers or wholesale customers.

When your sales platform receives an order, the product is directly transmitted from your sales channel to your fulfillment center. Most order fulfillment service providers will have an online dashboard, which can track the progress of the product in the entire warehouse.

The fulfillment center will remove the order items from the shelves and package them for delivery and transmission. The shipping station will label it and notify the carrier to prepare to pick up the package. Carriers such as FedEx, UPS, and USPS will regularly pick up the goods at the distribution center every day.

Many fulfillment centers also provide other services, including inventory management, multi-channel, and matching and customization.

There are other names for fulfillment centers, such as:

  • Fulfillment warehouse
  • Order fulfillment center
  • 3rd-party logistics warehouse(3PL)

Third-party logistics can refer to fulfillment centers or more complex logistics operations. In addition to 3PL, there are other levels of logistics services, such as 4PL, 5PL, and so on.

Explanation of distribution center

The distribution center is also a kind of warehouse, but its position in the supply chain is different. The distribution center redistributes the products in the warehouse, but the distribution center can also store products.

The direct docking object of the distribution center is not the consumer, but the transfer point that converts the product from one mode of transportation to another. Product advantages will be transmitted from the distribution center to the fulfillment center for order fulfillment. Besides, distribution centers can also serve as commodity centers for large retailers.

Fulfillment Center vs Distribution Center: What Kind of Business Do You Need?

If the center of your business is e-commerce fulfillment, your choice may be a fulfillment center rather than a distribution center. The next step in your decision is to find the most appropriate provider of fulfillment services for your business, which also involves the level of service your business needs, the size of your business, and the type of products you sell. Make sure that the service provided by the fulfillment company is what your company needs.

Suggestions on Controlling Fulfillment Warehouse Loss Rate

What is the utilization rate of the warehouse to prove the strength of an e-commerce order fulfillment center? In a sense, it covers the control of loss rate, the lower the loss rate is, the better the utilization rate will be. Nevertheless, the turnover rate of goods in the e-commerce warehouse is quite high, and there will be losses in the process of turnover and movement. What’s worse, it is difficult to predict where these losses will occur, how many losses will occur, whether they will be registered timely, what causes it, and the most important question is how to effectively control the rate of loss of inventory.

The following aspects will tell you how ChinaDivision carry out this work:

  • List Loss Points

All warehouse staff will participate in the discussion, starting with the process of e-commerce warehouse management, studying which operations are easy to cause the loss of goods, and recording these possible problems timely. Second, we need to count historical data, classify according to the cause of loss, and see how much loss is caused by each loss point. To determine the percentage of each loss that accounts for the overall loss of the e-commerce warehousing.

  • Set the Standard for Los

According to the data, ChinaDivision will calculate the loss value and percentage of the loss point to determine the loss standard and determine how much the loss standard should be kept. Zero loss is always just an idealized number. In reality, there is no such zero loss situation. 3pl fulfilment It is better to work out a more reasonable control target at a time and gradually improve it. Besides, the loss prevention standards mainly  referred to  two aspects, one is the target value, and the other is the loss prevention operation standard, which is used to regulate the staff in the e-commerce cloud storage in order to control within the target loss value operational requirements.

  • Record Data Timely

It is not for the operator to clarify the target value of the loss to be controlled, to receive training to understand how to prevent loss, and the loss will naturally fall below the target. It is necessary to record and account for the loss of the operation. In some places where management is not standardized, there are certain hidden rules, such as underreporting of losses, concealment, or staring at target values. These actions will affect the timely search for the cause of the loss, and then take effective measures to reduce subsequent occurrences. We have formulated the rules for accurate accounting. The loss is classified according to the reason for loss and scrap in the finance. When the reason is more general, the specific loss point is written in the remarks, which is convenient for the next round of combing and reducing the entire warehouse management. There must be a mechanism for inspection, supervision, and assessment, and actions that are not properly accounted for should be dealt with and punished in a timely manner.

Only by sorting out these loss issues, determining specific loss standards, and confirming the data in time, can the loss be controlled within the target range, so both the drop shippers and their customers can benefit a lot.

What Make China Restart Production Activities Easily

Industrial production does not take place in isolation, but rather relies on networks of suppliers, component manufacturers, distributors, government agencies, and customers who are all involved in the process of production through competition and cooperation. The business ecosystem in China has evolved quite a lot in the last 30 years.

China has a large number of dominant industries that create products and materials for export. The most prominent amongst the finished products exported from China are electrical goods, data processing technologies, clothing, and other textiles, and optical and medical equipment. China also has the world’s biggest new car market and exports a significant amount of raw materials, particularly steel. It’s the world’s largest exporter of steel. 

For example, Shenzhen, where ChinaDivision company is located, a city bordering Hong Kong in the southeast, has evolved as a hub for the electronics industry. It has cultivated an ecosystem to support the manufacturing supply chain, including component manufacturers, low-cost workers, a technical workforce, assembly suppliers, and customers.

The huge labor pool in China helps to produce in bulk, accommodate any seasonal industry requirement, and even cater to sudden rises in the demand schedule.

So, if readers were asking about, will the outbreak of virus destroy production in China, well the answer is not, but will be affected in a short term.

LinkedIn Article: 6 Things to Implement Before Publishing

Here are the top tips to create and publish a killer article on LinkedIn.

1. Best dates and times: Generally I have found Sunday, Monday and Tuesday morning between 8am-9am is the best times to post. I should note that these times are based on AEST, you may want to test out your own time zone to see what works well for you.

2. Importance of quality content: I touched on this briefly before but the better and more valuable your content the greater impact you will make on your existing and new followers.

3. Preview your content: Before publishing your post always make sure to preview your work. This will allow you to see whether or not your warehouse are aligned with any pictures or videos you have inserted, if heading are properly spaced out, and if your article is properly laid out, etc.

4. Include videos & images: Break up your text with images and videos so that people don’t get information overwhelm when they first visit your blog. Always make it a habit of listing a few tips or provide a how to guide within a section of the blog. Most people will skim through your article, so this is a great way to provide quick rich content.

5. Ask questions: Doing this demonstrates your genuine interest in feedback. It also makes it an interactive opportunity that encourages participation. Simple questions like “do you agree?” or “how have you seen this done?” are a call to action that can start the ball rolling.

6. Check the analytics: LinkedIn gives you great analytics to show you the success of your articles. This gives you a great opportunity to pay attention to which types of articles are getting the most views, comments, and social shares.

Following the same suggestions listed above,e commerce below is a screenshot of a blog I wrote on LinkedIn. Within 1 hour, it was featured on the home page and stayed as the top story within the “Entrepreneurship & Small Business” category of LinkedIn’s Pulse network for an entire day helping me reach over 9,000 views and over 100 comments.