What is the difference between warehouse and fulfilment?

What is the difference between warehouse and fulfilment?
If you’re an established SME or are just starting up and you:
  • routinely keep excess stock (to manage your supply chain), 
  • are an online retailer without a physical presence on the high street, or
  • need your products to be easily accessible to a supply route, 
warehouse storage is probably already part of your business plan. But would a fulfilment centre be better? Fulfilment and warehousing are two sides of the same coin, with subtle differences that might affect the effective running of your business.

Fulfilment and warehousing - what’s the difference?

At their most basic, fulfilment and warehousing are essentially the same thing - they are large, secure storage areas with large doors designed to hold business stock and equipment until it’s needed by the business. 

The differences are mainly to do with:
  • How long the stock is to be stored for;
  • Why the stock is being stored;
  • How quickly the stock needs to be accessed to fulfil customer orders.

Small business warehousing

Warehousing is ideal for small businesses that need to store excess stock somewhere that’s secure, affordable and accessible.  

You might, for example, buy excess seasonal stock from manufacturers when prices are low, and store them until you know they’ll be in demand. You might also buy in bulk to maximise your profit. 

If you’re an online retailer and don’t have a physical shop on the high street, a warehouse can be an affordable place to store your stock. If your business has outgrown storage in standard self storage units and you now need more space for your products, warehousing makes sense. If you’re not expecting a swift turnover of your stock, you can keep an inventory and update it as you normally would.

If, though, you have stock that flies off the shelf - where orders are placed directly from customers on a frequent basis and they expect very swift delivery - a fulfilment warehouse might be more suitable.

What’s a fulfilment warehouse?

It’s still just a warehouse! All fulfilment warehouses are warehouses - they differ from normal warehouses in how they function.

Fulfilment centres are mainly used for direct-to-customer sales, rather than B2B, and depending on the size of the business and rate of turnover, they’re often run and managed by a “3PL” (third-party logistics service provider).

Fulfilment warehousing might be right for you if you need:
  • Quick, same-day access to your stock to send immediately to your customers;
  • To replace stock frequently;
  • Your stock to be accessible as part of a supply chain. 
Swift order fulfilment requires tight control of your inventory. In a typical Amazon warehouse, for instance, shelves empty and are replaced by other stock several times a week. They use an inventory system and barcodes to ensure that their customers can see online whether an item is available, and that their staff know where items are shelved so that no time is wasted in fulfilling customer orders. 

In a warehouse-sized space it’s important to be able to find your stock if it moves from shelf to shelf as space becomes available. Swift order fulfilment requires you to be able to locate your stock electronically, and physically. If you’re set up to monitor and maintain your stock with a swift turnover, then fulfilment warehousing can work well for you. 

How much does fulfilment and warehousing cost?

The main difference between the costs of warehouse storage and fulfilment storage is that the latter might come with the additional expense of paying a 3PL. You might need to invest time and money in setting up an inventory management system if you choose to operate your logistics and stock management yourself rather than paying a 3PL.

Beyond that, the costs of small business warehousing depend on whether you buy/rent a commercial warehouse, or rent a warehouse-sized self storage unit. Our self storage units for businesses start at 1000 sq ft and you can store stock, tools or equipment for however long you need.

Renting warehouse storage and fulfilment storage is more affordable and flexible than a traditional commercial lease. Traditional warehousing will tie you to a commercial lease (or require considerable capital to buy the premises) and if your stock fluctuates during the year you may end up paying for more space than you need. You’d also need to pay for security, pest control, utilities and business rates, all of which can fluctuate considerably.

With a rented fulfilment warehouse or standard warehouse you can increase or decrease the size of your unit if necessary. All of your costs are included in your weekly rate so you can budget accordingly, and all of the warehouse units at Safestore are monitored by 24-hour CCTV, fire alarms and pest controls.

Warehouse storage and fulfilment at Safestore

Whether you need a fulfilment warehouse or just a warehouse to store your excess stock, tools or equipment, our stores are accessible all year round. 

We also have staff on hand to help, who can accept deliveries for you so you don’t have to wait around for stock to arrive, and we offer services such as forklift trucks, pallet trucks and shelving at most of our stores. 

Finally, we’re also a DHL Service Point so at any of our stores you can use free DHL packaging and send your parcels to your customers direct from your store - ideal for online retailers and direct sales!

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