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

In this blog we aim to explain both fulfillment and distribution

  • Written by Alex Dolce
  • Published on December 4, 2023
  • Time to read 9 minutes

Introduction

There are terms you have to know in the world of online shopping and quick deliveries. “Fulfillment” and “distribution” are some of those terms. However, even though they are both critical parts of the supply chain, these terms can get mixed up. So, what do they mean? Well, you’re in luck because today’s blog is here to answer who will come out on top in the fulfillment center vs distribution center battle. In this blog, we aim to explain both fulfillment and distribution, including what they do, how they work, and their differences. Therefore, by the end, you will be able to grasp their differences, as both are vital to today’s business landscape.

Breaking Down the Terms

First, let’s define each term so you can easily distinguish them. 

Fulfillment 

Fulfillment, in essence, is the “getting the order ready” part. So naturally, it involves taking orders, packing them, and shipping them to customers. Overall, fulfillment is about ensuring the right products reach the right people on time.

Distribution

On the other hand, distribution is the bigger picture. So, it includes everything from making the products, storing them in warehouses, moving them to where they need to be (like stores or customers’ homes), and the fulfillment part we discussed. Simply put, it’s the whole journey of a product from the factory to your doorstep.

So, now that you know what the two processes mean and how they work, let’s go over the concepts of a fulfillment center vs. distribution center. Therefore, you can see how each is different from one another. 

Fulfillment Centers

To begin, say you order a cool gadget online. Does it get directly delivered to you the minute you order it? No. So, where does its journey begin? The answer is at a fulfillment center. These facilities process individual orders with precision and speed. So, their essential functions include:

  • Order Picking: Center staff picks specific items from shelves or storage areas.
  • Packing: Items are carefully packed into boxes, usually with dunnage or protective material.
  • Shipping: Packages are labeled and shipped to reach you within the promised timeframe.

Well-known companies like Amazon have mastered the art of fulfillment centers; they offer convenience through quick and accurate deliveries. As e-commerce continues to boom, so does the demand for these centers. 

Distribution Centers

On the other side of the supply chain spectrum are distribution centers. These facilities are the central hubs for managing large quantities of products going to different destinations. For example, certain stores (like grocers) use them to stock their shelves. Some distribution centers’ responsibilities include:

  • Receiving Bulk Shipments: Products arrive in bulk from manufacturers or suppliers.
  • Inventory Management: Products are stored in large quantities and managed to meet demand.
  • Redistribution: Products are then sent to retail stores, fulfillment centers, or other distribution centers based on demand.

All in all, distribution centers are essential players in creating efficiency for the entire supply chain network. Also, they make sure products flow smoothly from manufacturers to end consumers. In other words, they are the behind-the-scenes heroes of logistics.

Fulfillment vs. Distribution: Key Differences

FULFILLMENTDISTRIBUTION
FOCUSIndividual order fulfillmentBulk shipments and overall inventory management
ACTIVITIESPick, pack, and ship productsReceive, store, and redistribute products
SCOPELocated closer to customers for rapid deliveriesStrategically placed to optimize transportation and reduce logistics costs

Conclusion:

Understanding the distinctions between fulfillment and distribution centers is essential for anyone involved in supply chain management. These facilities are the backbone of efficient order processing and product distribution. 

Additionally, as e-commerce continues to thrive and consumer demands evolve, mastering these concepts will be vital to staying competitive in the modern business landscape. So, by knowing your belt, you can be better prepared for success in shipping and logistics.  

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