Differences Between Warehouses And Distribution Centers

Time: Aug 15,2022 Author: SFC Source: www.sendfromchina.com

The moment you decide to operate an ecommerce store, you have to take the issues of warehousing and distribution into consideration, so the concepts of warehouses and distribution centers will not be strange to you. These facilities play different roles in smoothly connecting sellers and customers to achieve cross-border trade. Hence, almost all cross-border ecommerce sellers will use them in supply chain management.  

As the roles of warehouses and distribution centers in fulfilling orders and growing your e-commerce business are not the same, you’d better make the function of them clear when deciding to choose a warehouse or a distribution center or use them interchangeably.

There are many differences and similarities between a distribution center vs. a warehouse. To help you make the right choice to facilitate your business via order fulfillment, we will make a detailed comparison of warehouses and distribution centers in this article.  

 

Contents: 

I. What's a Warehouse?

1. Definition of warehouse.

2. Types of warehouses.

II. What's a Distribution Center?

1. Definition of distribution center.

2. Types of distribution centers.

III. Differences of Warehouse vs. Distribution Center.

IV. Better Distribution Services are in SFC.

V. Warehouse vs. Distribution Center FAQ.

I. What's a Warehouse?

1. Definition of warehouse.

A warehouse usually refers to a place dedicated to storing goods for short or long periods of time. As a warehouse covers a large area, it’s common to find them distributed around seaports, airports, and railways. There are various reasons for utilizing a warehouse, like storing overflow stock, off-season products, or even holding the entire stock of an item after manufacture for shipment to a large-scale retailer. To meet the needs of storing different products, there are different kinds of warehouses.

 

2. Types of warehouses.

Different warehouses are of different size, shape and function. Normally, there are 6 kinds of warehouses.

1) Public Warehouse: Public warehouses are generally owned by government agencies and are open to the general public. They are a good choice for short-term storage requirements for ecommerce startups.

2) Private Warehouses: Private warehouses are typically owned by a single organization. Private warehouses are the perfect option for e-commerce SMBs, private distributors, and wholesalers because they can get great benefits in a long period of investment.

3) Smart warehouses: Smart warehouses are supported by advanced technology, and use machines and AI to help with their storage, fulfillment, and management. Their efficiency is much higher than public warehouses and private warehouses.

4) Temperature-controlled warehouses: Temperature-controlled warehouses generally refer to warehouses that are equipped with temperature adjusting devices to store perishable goods for long time storage. They are favored by seafood export sellers.

5) On-Demand warehouses: On-Demand warehouses offer temporatory storage and warehousing management services for retailers or sellers on a short time basis. They are of relatively large liquidity.

6) Bonded Warehouses: Bonded warehouses are specifically designed for importing businesses that need a place to store their products before they’re ready to pay customs duties for them.
 

II. What's a Distribution Center?

1. Definition of distribution center.

A distribution center is also used to store products. However, a distribution center offers more than just an order fulfillment warehouse. The distribution centers also provide fulfillment services like order receiving, quality checking, order processing and prep, shipping, and receiving and dealing with returned goods. With the help of a distribution center, ecommerce sellers can have their orders fulfilled without ever having to lift a finger!
 

A distribution center is customer-oriented, so they generally deal with retailers and suppliers. After the retailers and suppliers send the products to the distribution center, the 3pl warehousing management work starts. A distribution center always uses smart warehousing management system (WMS) and transportation management system to improve their handling capacity and fulfillment efficiency.

2. Types of distribution centers.

Just like warehouses, there are 3 types of distribution centers for options to meet different fulfillment needs.

1) Conventional distribution centers: A conventional distribution center is the most basic type. The whole distribution processes in the conventional distribution center are all manually, and all goods are moved by hands and shoulders, thus it will generally cost a lot of time.

2) Mechanized distribution centers: A mechanized distribution center can move around the products in the distribution center manually or use sortation systems. These systems help distribution centers run much more smoothly than a conventional distribution center.

3) Automated distribution centers: An automated distribution center is completely operated with machinery such as automated weighting and sorting machine. Automated distribution centers are more efficient and convenient than conventional distribution centers and mechanized distribution centers.
 

III. Differences of Warehouses vs. Distribution Centers.

Although warehouses and distribution centers are similar in the function of storing and managing orders, they are different in the ways of managing orders. In addition, the distribution centers involve similar operations like quality inspection, warehousing management, picking packing, and global shipping. Therefore, the traditional warehouses will be extended to the distribution centers when the traditional warehouses can’t meet the needs of the supply chain.

Then let’s see the difference between warehouses vs. distribution centers.

1. Purpose: Warehouses and distribution centers are used to store products, but distribution centers include services such as QA inspect, order fulfillment, custom packaging, API Integration, and product kitting & assembly and global shipping.

2. Mobility: In the aspect of products storage, the distribution center tends to store products for a shorter time than that of a warehouse. This is because the flow rate of the distribution center is higher than that of the warehouse.

3. Focus: Distribution centers act as a link between product suppliers and their customers to meet their needs. In addition, warehouses focus more on efficient product storage.

4. Target: Warehouses are not designed to serve the external customers, while the distribution centers are. Orders of retailers and warehouses are shipped from distribution centers.

5. Operation: Distribution centers perform more complex operations than warehouses. Due to this reason, they rely heavily on high-end and up-to-date technology during the operations of order processing, shipping and warehouse management.
 

When it comes to the question: “a warehouse vs. a distribution center: Which one is better”, you should do a case-by-case analysis of your business needs. If you just need a place to keep your products for a period, renting a warehouse is enough for your use. If you need a place to store, pick, pack and ship your products, a distribution center will be more appropriate.
 

IV. Better Distribution Services are in SFC.

Warehouses and distribution centers are an integral part of ecommerce fulfillment and shipping. A warehouse can ensure safe storage and stable supply, and a distribution center can enhance customer satisfaction via high-quality order fulfillment and better customer services.

The scale and demand of your ecommerce business decide your fulfillment choice on a warehouse or a distribution center. Ultimately, your goal is to deliver your products to your customers in good condition as quickly as possible.

SFC, one of the largest distribution center in China, has been digging into the warehousing and distribution industry for 15 years and customizing a lot of services to optimize your warehouse management and improve your delivery experience. The customized services of SFC are as follows:

 ● Quality inspection: Different from ordinary warehouse and other distribution centers, SFC can provide QA inspect services for their customers before entering SFC warehouse in China. So any discrepancies in quality and quantity will be negotiated and handled at once.

 ● Customized packaging: SFC can use lightweight packaging materials to reduce your shipping costs, use enhanced packaging materials to ensure complete delivery of products, and use exquisite packaging materials to beautify packaging and improve customer satisfaction.

 ● Customized global shipping solution: SFC works with over 60 logistics companies, and extends its international shipping network to 220+ countries and regions around the world. In addition, SFC has rich logistics channels such as postal service, special line and express to custom the highest cost-efficiency shipping solution for customers based on their shipment time requirements and shipping fee budgets.

 ● Customized shipping dashboard: SFC customized self-owned shipping dashboard based on customers’ needs and usage habits. Sellers can import orders, upload CSVs or syn orders directly from their ecommerce store.

 

V. Warehouse vs. Distribution Center FAQ.

Q1: What cost will be generated in Fulfillment services?

A: It mainly includes two parts: warehousing fee + shipping fee.
 

Q2: Would you be able to pick up the goods from my factory?

A: Because we will do Quality Control including product condition and receiving quantity within SFC warehouse, it is recommended sending the goods from the factories to SFC directly. But there is an extra cost if you need us to pick up the goods from your factory.
 

Q3: What are the benefits of a distribution center?

1.Save your Ecommerce Fulfillment Costs

2.Save your Time and Free you from Order Fulfillment

3.Improve Your Order Fulfillment Services

For details of the benefits of a distribution center, you can read the article: 12 Benefits of 3PL Distribution Centers in 2022.