Fulfillment Centre vs Warehouse: Understanding the Key Differences

When it comes to logistics and distribution, businesses rely on various facilities to store, manage, and fulfill orders. In today’s fast-paced retail landscape, the terms “fulfillment centre” and “warehouse” are often used interchangeably when discussing logistics and supply chain management, yet they perform different roles in the supply chain. 

Warehouses and fulfillment centres (also known as distribution centres or 3PLs) are two types of facilities that serve different functions in the supply chain ecosystem. Both play critical roles in the storage and distribution of goods, yet they work differently and meet various needs within the supply chain ecosystem. 

Understanding their differences makes a difference for businesses looking to improve their logistical operations. This guide will clarify the purposes and functions of a fulfillment centre vs. a warehouse, allowing you to better understand which option may be best for your company’s particular requirements.

At SPExpress, we offer services from order fulfillment to supply chain management services that include freight forwarding, transportation, warehousing, picking and packing, inventory and supply chain management, and order fulfillment. We work closely with our customers to ensure their 3PL needs are being met properly. Since we understand how valuable working with a reputable 3PL provider can be and how it can help our customers to focus on growing their businesses. 

What is a fulfillment centre?

A fulfillment centre specializes in receiving, processing, and shipping orders directly to customers. These fulfillment centres are strategically placed to ensure efficient order fulfillment and often come with innovative technology to optimize operations. 

Fulfillment centres are high-activity locations for transporting goods. While it does feature shelves for storing items, the main objective of a fulfillment centre is to send orders rather than store goods. 

Workers in fulfillment centres process inbound inventory, pick products to complete orders, pack and label packages, and ship orders directly to customers. They act as a connection in the supply chain between manufacturers and the end user. 

What is a warehouse?

On the other hand, a warehouse primarily serves as a storage facility for goods, typically storing inventory in bulk quantities. Warehouses are instrumental in inventory management, providing a secure space for storing surplus goods until they are needed for distribution or sale. 

Unlike fulfillment centres, warehouses may not be equipped with the infrastructure necessary for direct order fulfillment. Warehouses often have fewer employees and limited movement of goods in and out on most days. It can include big containers, shelves, storage bins, and pallets stocked with products, each marked by a unique SKU or stock-keeping unit, as well as equipment such as forklifts used to move inventory around.

Fulfillment Center vs Warehouse

Primary Functions of a Fulfillment Centre

Fulfillment centres serve as dynamic hubs for order processing and shipping operations. They are strategically designed to optimize efficiency and expedite the delivery of goods to end users. At the heart of a fulfillment centre lie sophisticated technology and automation systems that orchestrate a smooth flow of inventory and orders.

Order Processing

Fulfillment centres excel at processing orders quickly and accurately. They are equipped with systems that automatically receive orders from various sales channels, pick items from shelves, pack them, and prepare them for shipment.

Order Fulfillment

Fulfillment centres use robotics and automated conveyors to automate order picking, packing, and shipping activities. This automation not only speeds up order processing but also decreases human error, resulting in higher accuracy.

Inventory Management

Fulfillment centres use cutting-edge inventory tracking systems that provide real-time monitoring of stock levels and SKU movement. Maintaining appropriate inventory levels is critical for fulfillment centres to ensure timely order fulfillment. Advanced inventory management software monitors stock levels in real-time and advises employees when it’s time to restock products.

Shipping and Delivery

Fulfillment centres have partnerships with shipping carriers to facilitate the timely delivery of orders. They optimize shipping routes and use various shipping options to offer customers fast and cost-effective delivery solutions.

Strategic Location

Fulfillment centres are strategically positioned in proximity to major transportation hubs and target markets. This strategic positioning facilitates expedited shipping, reducing transit times, and enhancing customer satisfaction.

Primary Functions of a Warehouse

Warehouses, on the other hand, primarily serve as storage facilities for goods awaiting distribution. Unlike fulfillment centres, warehouses typically focus on inventory storage rather than order processing. While warehouses play a crucial role in the supply chain, their functionalities differ from those of fulfillment centres.


Warehouses are designed to accommodate large quantities of inventory for extended periods. They feature ample storage space and pallet racking systems to efficiently organize goods. They provide a secure environment for inventory storage and are equipped with shelving, racks, and pallets to maximize space utilization.

Inventory Management

Similar to fulfillment centres, warehouses also rely on inventory management systems to track stock levels and monitor the product movement. They conduct periodic audits to ensure accurate inventory counts. 

Limited Automation

Unlike fulfillment centres, warehouses may have limited automation in place for inventory management. While some warehouses utilize basic technology, such as barcode scanners, they rely more heavily on manual labour for tasks like order picking and restocking.

Receiving and Dispatching Goods

Warehouses handle the receiving of goods from suppliers and the dispatching of goods to other locations, such as retail stores or fulfillment centres. Efficient receiving and dispatching processes are essential for maintaining smooth operations.

Flexible Usage

Warehouses offer flexibility in storing various types of goods, including raw materials, finished products, and seasonal inventory. This versatility caters to diverse industry needs and inventory management requirements.

Key Differences between a Fulfillment Center and a Warehouse

While both fulfillment centres and warehouses are involved in inventory management, their primary purposes and operations differ significantly.


The fundamental difference between a fulfillment centre and a warehouse lies in their primary purpose. While both facilities store goods, a fulfillment centre focuses on order processing and fulfillment, emphasizing speedy delivery to customers. In contrast, a warehouse primarily serves as a storage facility, managing inventory to meet demand fluctuations over time.

Key Takeaways:

  • Fulfillment Centre: Designed for order fulfillment and direct-to-customer shipping.
  • Warehouse: Primarily used for storage and inventory management.


Fulfillment centres are characterized by their dynamic and fast-paced operations, geared towards processing orders efficiently and meeting stringent delivery timelines. These facilities employ advanced technology, such as conveyor systems and robotic automation, to streamline order fulfillment processes and minimize turnaround times.

Warehouses, on the other hand, operate at a slower pace, focusing on inventory storage and management. While some warehouses may incorporate basic automation for inventory tracking, they typically lack the sophisticated order-processing capabilities found in fulfillment centres.

Key Takeaways:

  • Fulfillment Centre: Focuses on order processing, packing, and shipping.
  • Warehouse: Focuses on storing goods and managing inventory levels.

Customer Interaction

The differences between fulfillment centres and warehouses have a direct impact on the customer experience. Fulfillment centres play an important role in facilitating fast order processing and delivery, resulting in shorter delivery times and greater customer satisfaction. In contrast, relying only on warehouses for order fulfillment may result in longer delivery lead times and possibly lower customer satisfaction.

Key Takeaways:

  • Fulfillment Center: Directly interacts with customers through order fulfillment and delivery.
  • Warehouse: typically does not interact directly with end customers.

In summary, the primary distinction between fulfillment centres and warehouses lies in their respective functions within the supply chain:

  • Fulfillment Centres: Specialized in order processing, fulfillment centres prioritize speed, efficiency, and automation to meet customer demands swiftly.
  • Warehouses: Primarily focused on storage, warehouses offer ample space for inventory storage and cater to diverse industry needs with flexibility.

In conclusion, while both fulfillment centres and warehouses are critical components of the supply chain, their different roles and operations differentiate them. Understanding how they work is important for businesses looking to improve their logistics operations. Businesses can increase efficiency, order fulfillment procedures, and the overall customer experience by exploiting each facility’s distinctive advantages.

At SPExpress, we offer efficiency, scalability, and comprehensive warehousing solutions to businesses of any size, easing the burden on businesses. Contact us to find out more about how we can make order fulfillment and warehouse management simple for your business today!

Read more:

Shift From In-House To Outsourced Fulfillment – When it’s Better & How to Do it Right

How Third-party Logistics Services Can Ensure E-Commerce Growth?

The Top 6 Reasons For Outsourcing in Supply Chain Management For Your eCommerce Business

At SPExpress, we offer services from order fulfillment to supply chain management services that include freight forwarding, transportation, warehousing, picking and packing, inventory and supply chain management, and order fulfillment. We work closely with our customers to ensure their 3PL needs are being met properly. Since we understand how valuable working with a reputable 3PL provider can be, and how it can help our customers to focus on growing their businesses. 

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