Fulfillment Wiki

Fulfillment Center

A fulfillment center (FC) is a warehouse built to process high volumes of small customer orders, unlike a distribution center, which mainly ships full cases and pallets to stores.

Why it matters for ecommerce brands

Where you fulfill orders, and how that building is set up, decides your shipping speed and much of your cost per order. Fulfillment centers are designed to pick single units fast, with dense shelving, carts, and pack stations, rather than to move full pallets. For example, 2,000 small orders a day can mean 3,000 or more separate picks from shelves, while a pallet warehouse of the same size might ship a few dozen pallets. Choose locations by where your customers are, since shipping zone drives postage.

Origin

Mail-order houses such as Montgomery Ward from 1872 and Sears from the 1890s ran the first large warehouses filling individual consumer orders, a model later scaled for e-commerce by Amazon.

Common questions

What is the difference between a fulfillment center and a warehouse?
A warehouse mainly stores goods, while a fulfillment center is a warehouse set up to pick, pack, and ship many individual customer orders quickly. Most ecommerce 3PLs operate fulfillment centers.
What is the difference between a fulfillment center and a distribution center?
A fulfillment center ships individual orders to consumers. A distribution center mainly ships cases and pallets to stores and businesses, though many buildings now do both.
How many fulfillment centers does an ecommerce brand need?
Many brands start with one, placed centrally enough to reach most of the US within a few ground days. A second site on the other coast can cut zones and transit times once volume covers the extra inventory and fees.

Laws and regulations