4 min read

Fulfillment Center Vs Distribution Center: Which Is Better?

January 6, 2022 by Pulkit Bhola - 4 min read

Warehousing is one of the key elements of a distribution network for any business. This is especially true if a business operates in the eCommerce space. Did you know? The number of warehouses worldwide is anticipated to reach 180,000 by 2025.

Choosing the best form of warehousing based on your operational needs is critical for the smooth functioning of your supply chain. Typically, there are types of storage options with specific order fulfillment procedures- fulfillment center and distribution center.

fulfillment center vs distribution center

While you should take both of them into account when planning your operations, it is important to recognize the subtle differences between the two. A fulfillment center has different purposes than a distribution center. 

This article is about- fulfillment center vs distribution center. Read on to know what fulfillment centers and distribution centers are, which one out of them you should prefer for your business, and why.

What Is A Fulfillment Center?

A fulfillment center is a third-party logistics(3PL) warehouse that receives, processes, and fulfills customer orders on behalf of your business. To manage inventory with a fulfillment center, you can receive and examine the goods before sending them to the center or have the manufacturer send them directly to the center. 

Fulfillment centers are an integral part of the supply chain as they ensure that online orders reach customers faster and more affordably. They help you store your products strategically, ensuring your orders are picked up quickly once a customer has completed an online purchase.

Reasons To Choose A Fulfillment Center

fulfillment center vs distribution center- why to choose fulfillment center

Direct Delivery To Customers

Every time you get a new order, a fulfillment center processes it through a set workflow and delivers the products directly to your customer.

Located Close To Customers

A fulfillment center is generally located close to your customers and strategically so. The idea is to reduce the distance between your customer and your warehouse for efficient shipping.

Pickup & Packaging On Your Behalf

Your inventory is received and managed by trained fulfillment experts who could also pick products, pack your shipments, and label them on your behalf.

Technology & Automation

Whether it’s a warehouse management system, an order management system, or shipping automation, technology ensures transparency at every step of the order fulfillment process.

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What Is A Distribution Center?

A distribution center is also kind of a warehouse. However, it appears at a different point in the supply chain than the fulfillment center. The most basic definition of a distribution center is any warehouse along the way that facilitates the redistribution of products.

When we talk about fulfillment center vs distribution center, the key difference between the two is that a distribution center does not ship directly to customers. Instead, it serves as a transit point for products to change the way they are transported.

Distribution centers can also act like inventory hubs for large retailers so that products are replenished quickly on the shelves, and there are minimum shortages. This helps to keep the supply chain as proactive as possible.

Reasons To Choose A Distribution Center

fulfillment center vs distribution center- why choose distribution center

High Storage & Delivery Capacity

Distribution centers are designed to store and redistribute large quantities of products. There is more than enough space to store large quantities of your store inventory at once.

Long-Term Storage

You enjoy the freedom to store your inventory on a long-term basis without digging a big hole in your pocket.

Affordable Costs

Not just for long-term storage, but distribution centers are generally cheaper as compared to fulfillment centers, majorly due to economies of scale & lesser technological requirements.

Located Close To Target Market

A distribution center enables you to store more inventory closer to your target market. If you’re a multi-channel retailer, you might as well want to store inventory closer to your physical store.

Fulfillment Center Vs Distribution Center: The Conclusion

A typical supply chain usually has both fulfillment centers and distribution centers. The distribution center is a transit hub for goods as they change the mode of transport. Instead, the fulfillment center holds the products before they are shipped to customers.

Most eCommerce sellers require a fulfillment center rather than a distribution center. However, these companies must find a suitable fulfillment solution that is quick, effective, reliable, and efficient.

Shiprocket Fulfillment stores your products closer to your customers in a PAN India network of over 15 leading-edge fulfillment centers. Result? Your orders get delivered three times faster and up to 20% cheaper.

How about offering same-day and next-day delivery to your customers? Outsource your warehousing, order processing, and shipping operations to Shiprocket Fulfillment. Get started today.

Shiprocket Fulfillment features
Jan 6, 2022 by Pulkit Bhola

3 min read

An Overview of Third-Party Logistics Sector in India

December 23, 2021 by Rashi Sood - 3 min read

When we look at India’s third-party logistics sector, eCommerce digitization, and infrastructure modernization are the main growth drivers for the 3PL sector in India.

Third Party Logistics-Sector

According to reports, the Indian third-party logistics (3PL) sector is set to grow by US$10.74 billion in the period 2021-2025 at a CAGR of 8%. Also, as per the market reports, the 3PL market in India is all set to expand at a CAGR of 8.36% by the end of 2022.

This shows that collaborating with a 3PL organization can help big and small companies with their logistics and eCommerce fulfillment operations that can lead to a growth in revenue and sales.

Future of 3PLs in India Post COVID-19 Pandemic

Third Party Logistics-Sector

COVID-19 pandemic in 2020-21 struck the logistics operations of many businesses. Today they are as unorganized as they were before. But gained more traction after eCommerce businesses took the help of the 3PLs to reduce their response time for last-mile deliveries.

According to an industry report, the 3PL industry in India is planning to employ more than 40 million people that will become the biggest job creator in India in two to three years.

Evidently, the growth of the 3PL providers in India has increased post the COVID-19 pandemic. It is due to the imbalance which has occurred since the pandemic struck the nation.

The E-commerce industry has realized the importance of 3PLs and how they play a key role in the success of the company. It is now imperative to have an organized and tech-driven operational infrastructure for an integrated supply chain.

Another factor that leads to the demand for 3PL companies in India is the changing business scenarios that have made corporations move to 3PL experts to handle their operations. The third-party logistic providers can change the way of business execution and take their business to greater heights with cost reduction.

This is the reason why several eCommerce companies are moving to 3PL services to focus more on core business, to improvise supply chain efficiency, and operations management.

Technology – The Future of 3PL Sector in India

Third Party Logistics-Sector

Technology will change the way the 3PL industry operates across India. With the evolving digital trends, companies focus more on improving productivity and efficiency with a digitally connected supply chain.

Companies are focusing on technologies such as Artificial Intelligence (AI), Machine Learning, Robotics for the management of supply chains and the logistics sector. This will surely increase the efficiency and effectiveness of the supply chain process.

The third-party logistics market is rapidly growing in the market. At such a time, technology and innovation should be the top priority of a company looking for supply chain outsourcing.

SR Fullfilment

The 3PL sector in India is poised for technological adaptation and enabling infrastructure across industrial sectors and companies that look to reduce their carbon footprint and ensure competitive operations. Shiprocket is one of the best 3PL providers in the market, is known for its effective eCommerce fulfillment, warehousing management, and third-party logistics (3PL) services. With a proven track record and a deep understanding of eCommerce business functions, Shiprocket is known for specializing in integrated operations of inventory management, order fulfillment, warehousing, and logistics.

Shiprocket Fulfillment features
Dec 23, 2021 by Rashi Sood

5 min read

Store Inventory Management: How Do You Manage Store Inventory?

December 21, 2021 by Pulkit Bhola - 5 min read

Your inventory, as they say, is actually money that’s just sitting around in another form. Since you must manage your money wisely, store inventory management is definitely something you need to be good at.

No matter how many warehouses you’ve got to maintain, you must count each item of stock in each one of them, record the results, and take necessary action accordingly. It seems so challenging, right?

Well, you can’t help but keep track of your inventory levels all the time. After all, an unexpected stock-out is the last thing you’d wish for. Some inventory management software do come to your rescue by making store inventory management less of a headache.

store inventory management

Managing your stock is often like you’re stuck between the devil and the deep blue sea. On one hand, you don’t want to disrupt your cash flow with excess stock. On the other, you want to keep enough stock to timely meet the demand of your customers.

This is where store inventory management comes into the picture. Let’s understand what it is and how you can do it effectively.

What Is Store Inventory Management?

Store inventory management refers to maintaining your stock at the optimum levels across your online stores. In other words, it means keeping track of incoming stock, outgoing stock, and the stock lying in your warehouse.

Managing your inventory effectively helps you not only save big on your costs but also enables you to make timely decisions. You can get a crystal clear idea about when to recover your stock or sell your old stock.

Result? You can enjoy an uninterrupted cash flow and also can fulfill your orders on time. Here are the best practices of store inventory management to help you along the way:

Effective Practices Of Store Inventory Management

Did you know? Mismanaged inventory had cost retailers a whopping US$ 677 million during the coronavirus pandemic last year. To protect your business against such a situation, do the following:

store inventory management

Forecast Accurately

If you fail to forecast, you forecast to fail. Always base your sales projections on crucial factors such as your past sales data, economic environment, marketing plans, and the ongoing market trends.

Utilize The FIFO Approach

FIFO(First In, First Out) approach of store inventory management suggests that your products should be sold in the same chronological order as they were bought or manufactured. This is particularly useful in case of perishable products like food items. 

However, it’s also a great idea for non-perishable goods as long as there is a risk of damage or becoming unsellable. Here’s a trick. Always add new stock from the back, so the older stock is at the front.

Identify Excess Stock

You see, excess of everything is bad. Get rid of every stock item that hasn’t been sold at all in the last six to twelve months. Maybe, consider running a special discount or promotion for such products to clear that stock.

Do A Stock Audit

No matter how good your store inventory management software is, don’t forget to manually count your inventory from time to time to avoid any surprises. This can be done through various techniques, such as an annual physical inventory count or an ongoing spot audit.

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Deploy An Inventory Management Software

If you aren’t using any store inventory management software, get one today. The most important things you need in an inventory management software is real-time insights and regular inventory alerts via Email or SMS.

Keep Track Of Your Stock Levels

Never ever lose track of your stock levels. You simply can’t do that, unless you want to waste your time and money. While tracking your inventory levels, always prioritize the most expensive products. A good inventory management software can also help you do this easily.

Ensure Proper Quality Control

Last but not least, take a pledge now that you’ll keep your products in tip-top condition and are working properly. To start with, hand over a simple checklist to your stock auditors that covers damage, labeling, and other quality-related aspects. 

That’s it for now. We hope you must have got a clear understanding of what store inventory management is and how you can implement it in your business. But here’s a tip. If you don’t want to take any stress, how about outsourcing your entire order fulfillment process to a third party?

Manage Your Inventory Like A Pro

Using Shiprocket Fulfillment, you can sync your inventory from all your sales channels and marketplaces in a single place. You can also integrate new channels in just a few clicks. 

It’s easier to keep track of your stock and determine how many products you have on your hand. Our system will let you know when you are running out of stock so that you can update your inventory on time.

Simplify your fulfillment, warehousing and logistics operations today.

Shiprocket Fulfillment features
Dec 21, 2021 by Pulkit Bhola

5 min read

How to Identify the Best Courier Distribution Service in India

December 16, 2021 by Rashi Sood - 5 min read

Hiring the best logistics services for an eCommerce company is crucial for shipping products to the end customers. However, choosing the best courier distribution service in India is difficult, owing to the availability of options. With the number of options available, most eCommerce business owners like you often find it challenging to choose the best fit for their business. To make the task easier for them, we have compiled a list of considerations that you should make before zeroing in on a logistics provider.

courier distribution

Considerations to Make While Choosing the Courier Distribution Service

Choosing the best courier distribution company can be pretty tricky. What is the definition of the best? When you talk about a courier service, the first two things that come to your mind are how fast the order can be delivered and how reliable the service is for the order delivery.

Nowadays, most customers want their orders to be delivered faster and safer. So, one can say that the best courier service would be the one that delivers orders faster. But, as a business owner, don’t you want your courier distribution service to be cheaper as well, so your profits can be maximized?

Thus, it indeed can be said that you need to be extra careful while finalizing the courier service, as a lot depends on it.

The partner you decide will also connect with your customers on your behalf. Their behavior and performance will determine what they will think of you. The customer satisfaction rate will also depend on them. So, it will help you safeguard the reputation of your brand.

Now, let us have a look at the checklist of the features that you must look at in your courier distribution partner:

Delivery Speed

The world is constantly changing, and there have been steady technological advancements as well. From the product sales to the brand reputation, today everything is impacted by the order delivery speed. That is why the customers these days want everything faster. In fact, for most customers, faster delivery is not even a perk; it is an essential feature and a basic requirement.

Nowadays, many logistics services and order fulfillment services like Shiprocket Fulfillment offer same-day and next-day delivery options. So, if you don’t want to lag behind your competitors, you need to find a courier service provider that gives you a faster delivery option with robust technology.

You can also consider partnering with Shiprocket that has more than 17 courier partners under one platform. You can choose a different courier partner for each order based on their shipment delivery time and pricing.

Shipping Cost

While fastest delivery is what every customer wants, it should not come at the cost of your profits. Take some time in comparing the rates offered by different courier partners and choose the most budget-friendly shipping service.

Notably, the shipping rates and services don’t go hand in hand. There are courier companies that might be offering shipping at the lowest rates, but their services are reliable. Thus, again, a background check is crucial. Choose a courier that offers faster shipping services at the lowest rates with quality customer services.

Company Reputation

Before committing to any partnership, it is always advisable to run a background check on the partner. The same applies to your courier service provider as well. There are many well-established companies in the market, and it is natural for you to get confused between them.

SR Fullfilment

A reliable logistics partner will ensure that not just you but your customers are also satisfied with their services – they are a crucial link between you and your customers. As mentioned earlier, the delivery agent will hand over the order to your customers on your behalf and will represent your brand. So, it is crucial that you perform background checks and read all the available reviews.

Order Tracking

Customers these days want to be updated about the whereabouts of their orders in real-time. Many courier providers also offer order tracking options with advanced tech capabilities. Your customers will be notified about the orders through custom tracking pages and SMS and email notifications.

Shipment Security

There is always a possibility of accidents and shipment damage or loss during shipping. The security of shipments is the topmost priority. If your item is lost during transit, you will incur losses. Similarly, if your shipment is damaged during transit, you will have to incur losses. But this time, with customers receiving damaged products, your reputation will also be tarnished.

Thus, it is crucial if your courier service provider also offers you shipment security. This will provide you instant relief to the losses incurred, and you can also ship orders without any worry. You may think that not all your shipments require security. Companies like Shiprocket offer different types of shipment security – blanket coverage that covers all securities and selective coverage for selective shipments only.

Hence, you must read the company’s coverage in detail to make an informed decision. The best courier service provider will offer you an affordable security policy.

Conclusion

Courier distribution services are an integral part of the supply chain network. They help businesses connect with customers by delivering orders to them. With the change in customer behavior and them opting for online shopping, the eCommerce industry has seen a rise in recent times. This has led to a rise in the demand for courier services. When choosing a courier service provider, choosing a provider that provides faster delivery service at cheaper costs is crucial.

Shiprocket Fulfillment features
Dec 16, 2021 by Rashi Sood