How are distribution centers different from warehouses?
10-03-2022 435
If you are a large business that needs to ship goods in bulk, you may want to work with a distribution center.
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What is a distribution center?
A distribution center is a facility used to receive, temporarily store, and distribute ordered goods as they are received. Distribution centers are an integral part of the product distribution chain, order fulfillment, and goods are manufactured before shipping to wholesale or retail customers. Act as a bridge between suppliers and their customers.
Customer-centric, serving retail stores directly. Vendors typically ship products to these hubs, which serve specific retail locations. These hubs are an important part of the ordering process, and managing them is often complicated because they store a large number of products. To ensure efficiency in order processing, these centers often use the latest technology. Some centers also have warehouse management systems (WMS) and transportation management systems (TMS).

What distinguishes warehouses from distribution centers?
Many people use the terms "warehouse" and "distribution center" interchangeably. Both involve receiving, storing, managing, picking and transporting goods. However, there are several differences between a warehouse and a distribution center:
- A warehouse is only used to store products. In addition to product storage, a distribution center also provides value-added services such as product mixing, packaging, cross-connecting, and order fulfillment.
- Distribution centers usually serve B2B (Business to Business) customers. A warehouse, on the other hand, serves B2B customers but can also handle some B2C (Business to Consumer) customers.
A distribution center stores goods for a relatively shorter period of time than a warehouse. Therefore, the flow velocity through a hub is much greater than the flow velocity through a warehouse.
- Distribution center operations are more complex than warehouse operations. As a result, distribution centers are equipped with advanced technologies for processes such as order processing, shipping management, and inventory management.
- The distribution center is customer-centric and acts as a bridge between suppliers and their customers. The role of warehouses is to ensure efficient storage of products, while the role of distribution centers is to ensure that customer needs are efficiently satisfied.
- Retail and warehouse orders are typically shipped from a distribution center, not a warehouse. Unlike distribution centers, warehouses typically do not serve external customers.
When it comes to choosing between a distribution center and a warehouse, there is no set rule that determines which is best for your business. It depends on the specific needs of your business. One of the main considerations that you need to make is short-term and long-term hosting. However, the best way to decide which is best for you is to consider the pros and cons of each.
Advantages and disadvantages of distribution centers
Advantage:
- Supplying large quantities of products from one business to another
- Enough warehouse space to store large quantities of your store's inventory at once
- Long-term product preservation at competitive cost
- Allows you to locate more inventory closer to your target market
- Best suited for products that do not require individual finishing or packaging
Defect:
- Send orders less often, because they usually ship in bulk
- Goods are delivered on pallets and therefore are not packed at the center
- Shipments often take longer, as the hubs are located further away from the target markets
- Your ability to interact directly with your customers is worse
Distribution centers are essential parts of today's e-commerce logistics. If you are a large business that needs to ship goods in bulk, you may want to work with a distribution center. Whatever your decision, make sure to choose a logistics provider you can trust to deliver your orders on time, help you build customer loyalty, and grow with your business.