The Ultimate Guide to Fulfilment Centres
In the dynamic world of e-commerce, fulfilment centres are the unsung heroes ensuring that products reach customers efficiently. These specialized facilities handle the storage, processing, and shipping of online orders, streamlining operations for businesses. In the UK, the warehousing and storage industry has experienced significant growth, expanding at a compound annual rate of 5.6% to £36.3 billion over the five years leading up to 2024-25, as stated by the IBIS World.
This surge underscores the vital role fulfilment centres play in meeting consumer demands. Understanding their function is essential for businesses aiming to thrive in today’s competitive market. In this blog, we will explore the details of fulfilment centres and guide to choosing fulfilment centres for businesses.
What is the Fulfilment Centre
A fulfilment centre or fulfilment house makes for a core vertical taking care of end-to-end logistics processes in a supply chain. It is a specialized facility where third-party logistics providers (3PLs) manage the storage, processing, and shipping of products on behalf of businesses. All the stages of the order lifecycle, from order picking & processing to packaging and shipping, are duly accounted for, planned, and taken care of.
Key Terms Associated with Fulfilment Centres
Micro Fulfilment Centre versus Macro Fulfilment Centre
| Microfulfilment Centre | Macrofulfilment Centre |
| A micro fulfilment centre is a relatively small-scale storage facility with low-ground coverage inventory operations centre strategically located near a densely populated metro/urban station to improve delivery times. With e-commerce businesses promising flash order fulfilment to their customers, having a micro fulfilment centre empowers the concept of same-day delivery and, thus, helps organizations keep them trending for all the right reasons while effectively saving on infrastructure and delivery costs. | A macro fulfilment centre covers a sizeable operation centre for e-commerce dealings, a macro fulfilment centre supports a large geographical area & manages the maximum SKUs involved in a business’s transactions. A macro fulfilment house generally works in tandem with many micro-fulfilment centres and benefits an organization with reduced handling costs. |
E-Commerce Fulfilment Centre versus Multichannel Fulfilment Centre
| E-Commerce Fulfilment Centre | Multichannel Fulfilment Centre |
| An e-commerce fulfilment centre is a facility designed to handle online retail orders. These centres manage the storage, picking, packing, and shipping of products directly to consumers who purchase through online platforms. They are equipped to handle high volumes of individual orders and often integrate advanced technology to ensure efficient processing and timely deliveries. | A multichannel fulfilment centre manages orders from various sales channels, including online platforms, physical stores, and third-party marketplaces. Unlike e-commerce fulfilment centres focusing solely on online orders, multichannel centres are equipped to process and fulfil orders from multiple sources, ensuring a seamless distribution process across all channels. |
| Imagine “EcoHome,” a company specializing in eco-friendly home products.
EcoHome sells its products exclusively through its online store. To manage this, they utilize an e-commerce fulfilment centre that handles all online orders. This centre is equipped to process individual customer purchases efficiently, ensuring timely delivery to EcoHome’s online customers. |
As EcoHome’s popularity grows, they decide to expand their sales channels to include not only their online store but also major online marketplaces like Amazon and physical retail partners. To manage orders from these diverse channels, EcoHome partners with a multichannel fulfilment centre that is adept at handling orders from multiple sources, ensuring that whether a product is purchased online, through a marketplace, or in a store, the inventory is managed seamlessly, and orders are fulfilled efficiently. |
3PL Fulfilment Centre
A Third-Party Logistics (3PL) fulfilment centre is operated by external logistics providers who manage various supply chain functions on behalf of businesses. These services often include warehousing, inventory management, order processing, and shipping. Partnering with a 3PL allows companies to outsource their logistics operations, enabling them to focus on core business activities while leveraging the expertise and infrastructure of specialized providers. 3PL fulfilment centres can cater to e-commerce and multichannel distribution needs, offering scalable solutions tailored to a business’s specific requirements.
Let’s take the example of Eco-Home again. To focus more on product development and marketing, EcoHome outsources its entire logistics operations to a third-party logistics (3PL) provider. The 3PL fulfilment centre now manages warehousing, inventory management, order processing, and shipping across all EcoHome’s sales channels. This partnership allows EcoHome to leverage the 3PL’s expertise and infrastructure, ensuring scalable and efficient fulfilment as the business grows.
However, a Third-Party Logistics (3PL) fulfilment centre can encompass the functions of both e-commerce and multichannel fulfilment centres. 3PL providers offer comprehensive logistics solutions, including warehousing, inventory management, order processing, and shipping across various sales channels. This integration allows businesses to manage orders from their online stores, physical retail locations, and third-party marketplaces through a single fulfilment partner. By leveraging a 3PL’s infrastructure and expertise, companies can streamline their supply chain operations, ensuring efficient and consistent service delivery to customers across all platforms.
The Importance of Fulfilment Centres for Small Businesses
Fulfilment centres offer significant advantages for small businesses, enhancing efficiency and customer satisfaction. A study by Logistics Management found that companies using 3PL services experienced an average shipping cost reduction of 10-15%.
- By outsourcing storage and shipping to fulfilment centres, small businesses can save on overhead costs associated with maintaining their own warehouse space.
- Fulfilment centres allow small businesses to manage fluctuating order volumes without the need for significant infrastructure investments, facilitating growth and adaptability
- Strategically located fulfilment centres enable faster shipping customers, enhancing faction and loyalty.
- Professional inventory management services provided by fulfilment centres help prevent stockouts and overstock situations, ensuring optimal stock levels.
Read More About Fulfilment Centres Process how-it-works?
Five Best Fulfilment Centres UK
1- Kun Fulfilment
Kun Fulfilment is a specialized logistics provider offering comprehensive solutions tailored to e-commerce businesses. They excel in Amazon FBA preparation services, ensuring products meet Amazon’s stringent requirements for storage and delivery. With expertise in order fulfilment logistics, Kun Fulfilment manages the entire process from inventory management to shipping, streamlining operations for online retailers. Additionally, they provide customs-bonded warehousing, allowing imported goods to be stored under customs bonds, deferring duties until the merchandise is released for sale. This service is particularly beneficial for businesses looking to optimize cash flow and manage international shipments efficiently.
You can get further details at Kunfulfilment Pricing.
2- Bezos.ai
Bezos.ai offers comprehensive fulfilment solutions, including storage, delivery, and returns management, tailored to e-commerce businesses. Operating in 16 countries, including the UK, Germany, and the Netherlands, Bezos.ai enables businesses to expand their global reach. The company specializes in various product categories, providing customized fulfilment services to meet diverse business needs.
3- ShipBob
ShipBob is a prominent fulfilment solution that integrates seamlessly with Shopify, catering to both direct-to-consumer (DTC) and business-to-business (B2B) companies worldwide. By connecting your Shopify store to ShipBob’s platform, you can import your product catalogue and send your inventory to ShipBob for efficient order fulfilment. Key features include omni-fulfilment across various marketplaces, customizable shipping materials, and support for wholesale and dropshipping order fulfilment.
4- Flexport
Flexport is a comprehensive logistics platform that manages global supply chains from the factory floor to the customer’s door, enabling businesses to sell anywhere and ship everywhere. The company offers flexible delivery options, including two- and three-day shipping, catering to e-commerce, direct-to-consumer (DTC), and business-to-business (B2B) fulfilment needs. By leveraging demand-based planning, Flexport positions inventory closer to customers, ensuring efficient international fulfilment with transparent pricing. Additional services encompass customs clearance, insurance, and supply chain financing, providing businesses with end-to-end support for their logistics operations.
5- Huboo
Huboo is a leading eCommerce fulfilment provider that offers transparent pricing models, ensuring businesses understand their costs upfront. Their user-friendly platform allows for seamless integration with various sales channels, providing real-time inventory and order tracking. Additionally, Huboo provides dedicated customer support, assigning a specific account manager to assist clients with their fulfilment needs.
6- The Range Multichannel Fulfent Centre
The Range operates a multichannel fulfilment centre in Rugby, England, located at Valley Drive, CV21 1TN. This facility is designed to efficiently manage and dispatch orders across various sales channels, supporting the company’s extensive retail network. By integrating operations at this centre, The Range enhances its ability to meet diverse customer demands promptly.
Fulfilment Centre Pricing in the UK
The fulfilment centre pricing varies from centre to centre. However, the components involved in calculating the fulfilment prices include storage, pick and pack, shipping, and additional service charges. By evaluating these components, businesses can better manage their fulfilment expenses.
KunFulfilment offers a transparent and flexible pricing structure tailored to accommodate businesses of various sizes and needs.
Choosing the Right Fulfilment Centre for Your Business
Selecting the right fulfilment centre is crucial for your business’s success. Therefore, before choosing a fulfilment centre for your business, consider the following factors
- Choose a centre near your customer base to reduce shipping times and costs.
- Ensure the centre provides services like inventory management, order processing, and returns handling that align with your needs.
- Evaluate the fee structure, including storage, picking, packing, and shipping costs, to ensure transparency and affordability.
- Confirm the centre can accommodate your business growth and handle fluctuations in order volume.
Bottomline
Understanding the role and benefits of fulfilment centres is crucial for businesses aiming to optimize operations and enhance customer satisfaction. By carefully evaluating factors such as location, services offered, pricing, and scalability, companies can select the right fulfilment partner to support their growth and Check the pricing structure of Huboo fulfilment services.
