Distribution Centers: Best Ways to Reduce Shipping Costs in 2023

Many people are always confused by the terms warehouse and distribution center. Although they are equally important in supply chain management, they serve different purposes.

As product sourcing specialists, we deal with distribution center issues. With our help, you can enhance your entire fulfillment process.

In this article, you'll learn how a fulfillment center works. We will also share the services and benefits they offer you. Let's start.

It is also known as a fulfillment center, package processing center, or cross-dock facility. To complete the fulfillment process, you can store and ship your products from here.

Suppliers can also sort their products at the distribution center. They are then ready to ship it to individual end consumers.

Many distribution centers use inventory-handling equipment during the distribution process. For example, forklifts, pallet jacks, containers, etc. They usually also feature receiving docks, storage space, and shipping areas.

In general, distribution centers provide a variety of services. Let's see:

It makes inventory management easier for suppliers. These centers will receive products in bulk with supplier information. These centers will then stock good inventory as needed. The centers are also equipped with software to manage inventory usage.

The fulfillment center then handles the entire process during order fulfillment. It stores inventory and picks and packs them for the shipping process. They will ensure that perfect products are delivered to customers.

If the sales volume of a product is good, the inventory will inevitably be low. These centers also provide inventory replenishment for ongoing order fulfillment. They use software to manage and store products. Thus, the center will know when to replenish which products to fill the order.

Distribution centers work with logistics professionals to make deliveries happen. Their high-tech system enables retail customers to receive their orders in a timely manner. Integration also helps these centers ship faster and at a low cost.

These centers are zoned to accommodate the e-commerce fulfillment process. They also use the latest technology to store and transport data. Often, they link with e-commerce platforms. These platforms provide detailed information on customer logistics.

The fulfillment center also provides returns management for its partners. These centers often partner with platforms such as Happy Returns. Therefore, customers can return unsatisfactory products through these logistics platforms.

The centers also focus on superior consumer experience. They provide packaging services to provide customers with a pleasant unboxing experience. These centers also manage logistics tracking and returns for customers. It provides customers with a better online buying experience.

Distribution centers bring huge benefits to companies. Let's see what they are.

Packing and shipping cost a lot of money. Businesses can save money by aligning services at these centers. This is because they provide quality assurance throughout the process.

You will be able to reduce the cost of temporary storage and out-of-stock issues. You also have peace of mind that orders will be late or incomplete, driving up your costs.

Distribution centers have experience in handling efficient distribution processes. Businesses can let them handle the process themselves. You can spend more time on other important tasks, such as marketing strategies.

Some businesses may not have the required equipment. You can work with these centers to ensure a smooth fulfillment process.

Distribution centers help businesses focus on other aspects. For example, marketing and advertising strategies.

You'll save your customers the hassle of packaging and shipping. You can free up more time to do things that will increase sales, which is beneficial.

The advantages and disadvantages of distribution centers are as follows:

1. Large Delivery Volume

The center sorts products from one location. Therefore, they can ship products in bulk.

2. Huge Building Space

Distribution centers provide a variety of services. Hence, their warehouse space is huge for the distribution process.

3. Integrated Technology

The distribution center is integrated with the e-commerce platform. They start by collecting data from suppliers. These hubs will then process the flow of information online.

4. Low Cost

In general, distribution centers are less expensive than fulfillment facilities. They handle the fulfillment process at a lower cost than fulfillment centers.

1. Customer Interaction

Distribution centers are customer-centric. However, they have no direct-to-consumer interaction. Some additional customer requirements may cause some problems.

2. Less Service

Distribution centers can be comprehensive overall. However, it still serves fewer than fulfillment centers.

3. Not Shipping Directly to Consumers

Distribution centers sort products by region. Therefore, they do not deliver the product themselves. They will rely on delivery companies to do this.

4. Shipping Schedule

The fulfillment process adds to the transit time, thereby consuming time. In contrast, fulfillment centers process and ship items faster.

In short, a distribution center has a lot to offer. They do have their pros and cons. However, they still play an important role in the e-commerce business.

I hope you learned from this article how a fulfillment center works. Please feel free to contact us for your customized international logistics solutions.

RND is a professional Chinese product purchasing agent. We source products and suppliers at a reasonable cost and provide solutions for product development, bundling, packaging, and shipping. Over the past 16 years, we have built trusting relationships with clients from more than 50 countries. Some of them are now part of our family. Due to our experience in most aspects, we have established reliable partner supplier resources.