What is The Difference Between Traditional Distribution Centers and E-Commerce Fulfillment?

Up until only the past twenty years or so, the retail industry has operated on the idea that consumers will visit a physical building to buy the things they need.  With the advent of e-commerce, though, the retail world has changed immensely.

Here are four ways that traditional distribution centers like Fueltransport.com are different from e-commerce fulfillment centers:

DIFFERENCE #1:  Bulk vs Single

Basically, a major difference between traditional distribution centers and e-commerce fulfillment distribution is that the former handles only bulk pallet-loads while the latter deals in sending single items to consumers.  This also means, however, that distribution centers do not accommodate e-commerce customers. Instead, e-commerce orders tend to come from a distribution center and stored at a fulfillment center before being sent to the customer.

DIFFERENCE #2:  Distribution Centers Ship to Retailers while Fulfillment Centers can be the Retailer

Since distribution centers cannot sell directly to customers, they have to send their bulk products to the retailer for the sale.  This is a traditional model that has worked for many decades.  Modern e-commerce, however, has turned the fulfillment distribution center into a retailer, of sorts, since customers don’t have to actually visit a physical brick and mortar store to place an order (which will come directly from the warehouse).

DIFFERENCE #3:  Product Proliferation

In traditional retail, a store could simply just take a bulk pallet and separate the pieces on a shelf for easy sales.  Each row of shelves might have a few competing products, but all in all it was a pretty simple offering that only required minimal stock-keeping-unit (SKU) tracking.  E-commerce does not need any physical shelves and, thus, e-commerce retailers can “stock” a much bigger variety of competing products.  As such, they need to be more efficient at tracking, replenishing, and replacing SKUs.

DIFFERENCE #4:  Online Order Filling is Much Faster

When you walk into a store, you can easily see which products are available.  The store probably has a stockpile of each product in the back warehouse or storeroom, and they can replenish the shelf stock daily and then order more for the warehouse perhaps every week or two.

In the e-commerce world, this replenishment must move much faster. Facilities need to be able to pick items from the shelf, pack them in boxes, and ship directly to the customer almost immediately upon placing the order.