Warehouses: How they are Different from Fulfilment Warehouses and Fulfillment Centres
Did you know that global warehouse space is expected to reach 180 million square meters by 2025, driven by the rise of e-commerce and supply chain expansion? Yet, not all storage facilities serve the same purpose. Businesses often confuse warehouses, fulfilment warehouses, and fulfilment centres, but their roles in logistics are vastly different. Understanding these differences can help companies optimise logistics, cut costs, and improve customer satisfaction.
In this blog, we’ll break down how these facilities function, their ideal use cases, and which one best suits your business needs. Keep reading to find out how the right choice can enhance efficiency and give you a competitive edge in today’s fast-paced market.
Understanding the Concept of Warehouses, Fulfilment Warehouses, and Fulfillment Centers
What is Warehouse?
A warehouse is a storage location, more like an enlarged godown typically ranging from 10,000 to 100,000 square feet, designed to store finished goods until they are redistributed to retailers, wholesalers, or distribution centres. For instance, Michale Furniture Store is a warehouse that stores thousands of sofas and beds in a warehouse for months. When a retailer orders in bulk, a truck delivers the goods, but no individual orders are processed.
What is Fulfilment Warehouse?
A fulfilment warehouse combines traditional storage with order fulfilment services. It is more like an order fulfilment warehouse. Unlike standard warehouses, fulfilment warehouses are optimised for e-commerce and direct-to-consumer shipping. They handle everything from storing products to picking, packing, and shipping orders. For instance, Weihai Skincare Brand sends 10,000 soap units to a fulfilment warehouse. When customers order, the warehouse picks, packs, and ships products to them.
What is the Fulfilment Centre?
A fulfilment centre is an advanced logistics hub for fast and efficient order processing. It focuses on short-term storage and rapid distribution, ensuring customers receive their orders as quickly as possible. Unlike warehouses, fulfilment centres are highly automated, allowing for same-day or next-day shipping. For instance, Eden’s Tech Store sells wireless earbuds on TikTok Shop. When he partners with a fulfilment centre, the centre takes orders via e-shops, processes, and ships each order within hours, ensuring same-day or next-day delivery directly to the customers with minimum hassle for the business runner.
Core Functions of Fulfilment Warehouse Services
Warehousing solutions are integral to efficient supply chain management, encompassing several core functions that ensure the seamless flow of goods from manufacturers to consumers. Below is an overview of these primary functions:
Storage
Firstly, warehouses provide large-scale storage solutions for businesses, accommodating goods based on demand and supply cycles for varying durations. This function ensures that products are securely housed until they are needed for distribution or sale. Effective storage strategies maximize space utilization and maintain product integrity.
Inventory Management
In addition to storage, effective inventory management within warehouses involves tracking stock levels, monitoring product conditions, and managing stock locations. This function ensures that products are stored safely and efficiently, facilitating accurate order fulfilment and minimizing discrepancies. Advanced systems, such as Warehouse Management Systems (WMS), are often employed to optimize these processes.
Transportation Coordination
Moreover, warehouses play a pivotal role in coordinating the movement of goods to and from their facilities. This includes managing inbound shipments from suppliers and organizing outbound deliveries to customers or retail outlets. Efficient transportation coordination ensures timely delivery, reduces transit costs, and enhances overall supply chain efficiency.
Key Differences Between Warehouse, Fulfillment Warehouse, and Fulfilment Centre
The use of “warehouse”, “fulfilment warehouse”, and “fulfilment centre” is often used interchangeably. All three are essential to order fulfilment; the buildings share similar functions, and the physical differences between the two are slight. However, when it comes to comparing them, it’s important to remember they are not the same. Following are some key differences.
Purpose and Operation
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Warehouses generally store goods for extended periods | Fulfilment warehouses store and process orders for businesses | Fulfilment Centre rapidly processes and ships direct-to-consumer orders |
| Mostly manages bulk shipments | Combines storage with order fulfilment. | High-speed picking, packing, and shipping. |
| Warehouses deal with fixed inventory storage | Stores goods but also handles individual order shipments | Fulfilment centres are highly flexible, processing high-volume daily transactions |
Storage Duration
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Typical storage time is Several months to years with low inventory takeover | The storage time is medium-term, i.e., weeks to months | Fulfilment centres provide flexibility, from short-term (days to weeks) to months and even years |
| Stocks are Static | Stocks are semi-dynamic as they are to be moved. | Since stocks come into action after almost every order from the customers, they are highly dynamic and automated |
Clientele & Order Processing
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Warehouses work best for manufacturers, wholesalers, large retailers | E-commerce brands, subscription businesses, and retailers prefer using fulfilment warehouses. | Although fulfilment centres encompass, Direct-to-consumer (D2C) brands, full scaling e-commerce sellers utilize them the most. |
| Advanced connectivity is generally not required at warehouses | Connected via warehouse fulfilment software | Integrated with multiple online platforms for real-time order tracking |
Operations & Technology
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Basic inventory tracking because the need is lower due to static operations | Uses warehouse fulfilment services with moderate need of tech-operation | Advanced automation & robotics with high real-time inventory tracking and fast dispatch |
Shipping & Carrier Pickups
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Infrequent bulk shipments | Regular dispatches, but not always daily | Daily shipments, often same-day or next-day |
| Working with courier companies is rare | Works with major couriers | Integrated with multiple courier networks |
| Rare return management | Returns are managed within a structured process | Returns are highly optimised for quick returns & replacements |
Cost & Scalability
| Warehouse | Fulfilment Warehouse | Fulfilment Centre |
| Low (as it’s just storage) | Moderate – combines storage & processing | Higher – speed & automation increase costs, but the processing is highly scalable |
| Packaging options are not available | Limited options for packaging | High–custom packaging, branding, and gift wrapping are available |
Which One Should You Choose?
When deciding between a fulfilment centre and a warehouse, it’s essential to consider several key factors to determine which aligns best with your business needs.
1. Business Model (B2B vs B2C)
Firstly, assess your business model. Fulfilment centres and fulfilment warehouses are tailored for businesses operating in the business-to-consumer (B2C) space, efficiently processing and shipping individual customer orders. For example, an e-commerce retailer selling directly to consumers would benefit from a fulfilment centre’s capabilities. Conversely, warehouses are more suitable for business-to-business (B2B) operations, focusing on storing products until they are distributed to retailers or wholesalers. A manufacturer supplying goods to various retail outlets would find a warehouse more appropriate.
2. Inventory Turnover Rates
Next, consider your inventory turnover rates. Fulfilment centres are designed for rapid inventory turnover, storing products briefly to meet immediate demand. This setup is ideal for businesses with fast-moving products requiring quick customer delivery. In contrast, fulfilment warehouses have moderate inventory turnover, while warehouses are intended for long-term storage, often housing products for extended periods. This arrangement suits businesses dealing with products with longer shelf life or are produced in bulk and distributed over time.
3. Customer Delivery Expectations
Customer delivery expectations also play a crucial role. Fulfilment centres are equipped to meet high customer delivery expectations, with frequent, often daily, shipments to ensure timely delivery to consumers. For instance, companies like Amazon utilize fulfilment centres to offer same-day or next-day delivery services. On the other hand, fulfilment warehouses and warehouses schedule less frequent pickups, often shipping in bulk to retailers or other distribution centres, aligning with standard B2B timelines.
4. Operational Complexity and Technological Needs
Finally, evaluate the operational complexity and technological needs of your business. Fulfilment centres engage in complex operations, including order processing, picking, packing, and shipping, utilizing advanced technologies like Warehouse Management Systems (WMS) and automation to enhance efficiency. This setup benefits businesses requiring streamlined operations to handle high order volumes. In contrast, warehouses focus primarily on storage with minimal daily operations and may employ basic inventory management systems, making them suitable for businesses with more straightforward operational requirements. Fulfilment warehouses stand in between.
| Business Type | Best Choice |
| Large manufacturers needing bulk storage | Warehouse |
| Growing e-commerce businesses needing storage & order fulfilment | Fulfillment Warehouse |
| Fast-growing online store with high daily orders | Fulfillment Centre |
In sum, mostly, the fulfilment centres and fulfilment warehouses, unlike warehouses, are alternatives that work almost the same- Here explained are some types of fulfilment warehouses include
1. E-Commerce Fulfilment Warehouse
An e-commerce fulfilment warehouse is tailored to online retailers. These facilities handle bulk inventory storage, order processing, and returns management.
2. 3PL Fulfilment Warehouse
A third-party logistics (3PL) fulfilment warehouse provides outsourced logistics solutions, including storage, inventory management, and shipping services.
3. Fashion Warehouse Fulfilment
A fashion fulfilment warehouse specializes in handling apparel, footwear, and accessories, offering services such as garment-on-hanger storage and returns management.
4. UK Fulfillment Warehouse
A fulfilment warehouse in the UK serves businesses that need logistics solutions in the United Kingdom, ensuring fast and cost-effective shipping within the country.
Final Thoughts
Choosing the right logistics solution depends on your business needs. Whether you require long-term storage in a warehouse, a flexible e-commerce fulfilment warehouse, or a high-speed fulfilment centre, understanding these differences will help optimise your supply chain. For businesses in London or anywhere in the UK, exploring a third-party fulfilment warehouse or order fulfilment warehouse can improve delivery speed and efficiency, enhancing customer satisfaction.
Ready to elevate your logistics game? In today’s fast-paced e-commerce world, understanding the key roles in fulfilment is crucial for seamless operations. Let Kun Fulfillment Services handle the heavy lifting while you focus on growing your business.
