Fulfilment houses and fulfilment centres: what’s the difference?
Our clients – online retailers – are able to deliver goods to customers worldwide and offer next-day delivery to all major cities. This is thanks to our network of fulfilment centres. Located on three continents, they use cutting-edge order fulfilment software and cloud computing to achieve near-100% pick and pack accuracy.
As you might have guessed, “fulfilment centre” refers to the vast buildings, to which goods are transported in bulk, and then stored, picked, packed and shipped to individual customers.
So far, so simple.
But even within the logistics industry, there’s some confusion about the distinction between fulfilment centres, on the one hand, and fulfilment houses, on the other. So…
What is a fulfilment house?
The term “fulfilment house” refers to companies that process, store and distribute customer orders on behalf of their clients, and are responsible for handling any returns.
James and James is a global fulfilment house. In fact, we rank among the fastest-growing fulfilment houses, thanks to the sophistication of our fulfilment centres – the places in which we store, pack and deliver goods to customers who have ordered them.
Both of the terms – fulfilment house and fulfilment centre – gained currency relatively recently, in the mid-90s, and they sound fairly similar. But as we have seen, the distinction in meaning between these terms is significant – the former refers to an entire company, the latter to their individual facilities.
A fulfilment house is a company that fulfils products on behalf of eCommerce businesses. They typically offer a range of services, including order processing, inventory management tools, warehousing, shipping, and returns management.
Fulfilment houses can be a great solution for businesses that don’t have the space or resources to manage their own stock and shipping. They can also help to save time and money by streamlining the process and making the stocking, packing and shipping processes more efficient. This makes it easier for businesses to focus on their core competencies and leaves the fulfilment process to experts who are better equipped to handle it.
Fulfilment houses play an important role in the supply chain by picking, packing and shipping products to customers. They are responsible for ensuring that orders are filled accurately and efficiently, and that customers receive their products in a timely manner.
The role of a fulfilment house can be critical to the success of a business, especially if that business is trying to scale quickly. By outsourcing some or all of their warehousing and fulfilment needs to a specialist fulfilment house, businesses can focus on their core strengths and leave the logistics to someone else. This can be a very cost-effective solution, especially for smaller businesses that don’t have the time, money or resources to handle this aspect of the business alone.
While every business is different and there are many factors to consider when making the decision to outsource your fulfilment, there are a number of general advantages to outsourcing to a fulfilment house:
- Relief from Administrative Burden
When you outsource your product fulfilment, you are effectively hiring an expert team to handle all aspects of managing, warehousing, packaging and shipping your products. This leaves you free to focus on other aspects of running your business, namely, product development, marketing and sales.
- Reduced Operational Costs
Fulfilment houses typically have large-scale operations which enables them to receive discounts from carriers and suppliers due to economies of scale that their clients and partners can use to their advantage. Additionally, a fulfilment house can often do the job more cheaply than if you were to hire additional staff members in-house.
- Increased Speed and Efficiency
When you outsource to a fulfilment house, they take care of everything for you – from processing orders to shipping products. With this experience and expertise at your fingertips, your team can focus on more important tasks, like growth and development.
There are a few things to consider when determining whether or not you need a fulfilment house as an online retailer. Fulfilment houses provide storage, order processing, and shipping services for eCommerce businesses. They can help you manage your inventory and keep your shipping costs low, which is especially important if you’re selling products in multiple locations.
If you’re just starting out and don’t have a lot of inventory, then you may not need a fulfilment house yet. But as your business grows, it’s likely that you’ll need to start using one to ensure scalability and to keep up with demand.