In recent years, the concept of traditional warehousing and the storage of products have greatly evolved. Now more than ever, growing businesses require inventory management solutions guided by experts with technological skills and infrastructure to keep up with the speed and efficiency of competitors and customer expectations.
Distribution centers continue to replace traditional warehousing. Rather than storing and handling inventory and fulfillment processes in-house, brands continue to look towards fulfillment and distribution centers that provide specialized logistical guidance to meet increasing consumer demands. Distribution centers offer the fulfillment infrastructure and technology that are essential to growing your online store in the most affordable, accurate, and efficient way possible.
The following breakdown will outline how distribution centers function, what services they provide, and how they can take your Direct-To-Consumer brand to the next level of success and growth.
What is a distribution center?
A distribution center is a functional and specialized warehousing operation that serves as a hub to store finished goods, streamline the picking, packing & shipping processes, and distribute larger quantities of goods wherever needs are. Often interchangeably referred to as a fulfillment center, distribution centers handle order fulfillment and other value-added services.
Differences between a distribution center and a warehouse?
Despite what you may believe, distribution centers and warehouses are vastly different. The most prominent and game-changing difference often can be traced to the moment inventory is stored. Simply put, warehousing almost always suggests a longer product storage period whereas distribution centers are constantly moving product inventory in and out through order fulfillment from eCommerce sales. More detailed differences are as follows:
Storage Management
Warehouses provide traditional storage which often includes industrial buildings with stocked shelves of inventory. Whether leased or co-leased, warehouses are simply a place to store your goods.
Far more agile, Distribution centers are typically guided by a 3PL or Third-Party-Logistics company that provides the storage, fulfillment capabilities, and professional guidance to streamline shipping processes. This more hands-off approach ensures products efficiently move in and out while keeping customers happily satisfied.
User Design
Warehousing is straightforward and run-of-the-mill because its singular purpose is to provide space, rather than the services and functions that add value to your business through fulfillment distribution.
Distribution centers go above and beyond simple storage solutions to help eCommerce businesses optimize their supply chain. They offer expert solutions from inbound and outbound logistics to receiving, to custom packaging and optimized shipping. These processes all revolve around consumer needs because the speed, method, and visual appeal of your product shipments can have just as much influence on the customer as the actual product. All together, providing customers with constant support and professional care is one of the many keys to eCommerce success.
Partnerships & Workflows
Warehouses typically don’t offer the shipping services you need to get products from storage to a customer’s doorstep. Packaging and arranging freight can be a complicated and expensive process to handle alone.
A distribution or fulfillment partner like Drive Fulfillment grants access to major carriers and discounted shipping rates. Partnering with like-minded tech-enabled 3PL reduces overall costs, adds quickness and efficiency, increases flexibility, encourages scaling, and improves accuracy all at the same time. Direct integrations with your eCommerce platform mean that orders are shipped out directly following their approval and processing.
In-House Services
Warehouses are designed to store stuff. Given their straightforward and simple purpose, it’s rare that they offer ways to add value or save on costs to optimize your retail supply chain.
Distribution centers offer efficient and accurate fulfillment because of their involvement and access to eCommerce platforms that connect to a warehouse management system like DriveLine, powered by Deposco. From point A to Z every means is carefully monitored.
Essential processes of a distribution center
While each distribution center may function a little differently, they are all designed to pick, pack, and ship packages to customers in the most effective way possible. Typical distribution center services are as follows:
Receiving and Storage
Accurately accepting, logging, and storing merchandise through an inventory tracking system is imperative. This is the 1st step and the foundation of the fulfillment process. Knowing exactly where and how many of a product is stored, all logged through a custom-built receiving software means that everyone is on the same page and ready to ship quickly once orders roll in.
Picking and Packing
Partnering with a tech-enabled distribution center capable of picking, packing, and shipping products through a warehouse management system is one of the most promising advantages of working with a 3PL. Custom Warehouse Management software that automatically assigns similar orders with inventory in the same area of the warehouse reduces the number of steps required to pick orders.
Each unit that’s picked is scanned from the inventory container or storage space so inventory counts are updated in real-time, providing up-to-date stock levels for the business. This is one of the many examples of how this logistical expertise improves the speed and accuracy of order fulfillment.
Restocking
Inventory replenishment and restocking require a careful eye to ensure that you have enough products stored and ready to be picked as soon as each order comes in. Stockouts or backorders are common, yet troublesome inventory issues that occur due to poor inventory tracking or forecasting.
3PL’s and distribution centers help you avoid understocking and overstocking using software and other automated processes that provide you with the necessary data and visibility to act when required to stay on top of your inventory.
Returns
Don’t underestimate the importance of returns management and customer service support. By using a Fulfillment or 3PL like Drive Fulfillment, you always have the option to invest in return management services. Increasing customer satisfaction with a communicative line of support and network of individual support can go a long way.
Benefits of Drive Fulfillment distribution services?
There are an array of advantages that come with using a distribution center, 3PL, or fulfillment center over a warehouse, especially if it suits your company and stage of growth. At Drive Fulfillment, we take this one step further with a plenitude of services on top of being one of Counselors’ Top 40 distributors of the year.
For more information or to explore how your business can benefit from best-in-class distribution services eCommerce Fulfillment, Custom Packaging, Kitting and Assembly, Direct to Garment, and On-Demand Printing get in touch or to receive a customizable quote Contact us today!
