# What Does a Fulfillment Center Do & How Do They Compare to Warehousing Services?

**Last updated on May 27, 2026**  Written By [Kristina Lopienski](/content/author/klopienski/index.html)

## Key Takeaways

1. Warehouses primarily store inventory for extended periods, while fulfillment centers focus on quickly processing and shipping orders to customers.
2. Fulfillment centers handle a range of logistics activities, including order picking, packing, and shipping, often partnering with third-party logistics providers.
3. Outsourcing fulfillment to a professional center can save time and improve efficiency, allowing businesses to focus on strategic growth rather than operational tasks.
4. Fulfillment centers often offer expedited shipping options and use technology to provide real-time inventory management and order tracking for ecommerce businesses.

The terms "warehouse" and "fulfillment center" (or "[distribution center](/content/blog/distribution-center/index.html) ") are often used interchangeably – but in reality, the two have very different connotations.

In this article, we’ll define and break down the definitions and benefits of fulfillment centers and warehouses, as well as the key differences between the two so you have a better idea of which option is best for your business needs.

## What does a warehousing solution do?

A warehouse is a large storage center or industrial space designed to house inventory in bulk. A [warehousing solution](/content/blog/warehousing/index.html) refers to a company that stores products on a business’s behalf within their warehouses for an extended period of time.

Warehouses can be dedicated to storing only certain types of inventory. For example, some warehousing providers geared toward wholesale business may only store inventory dedicated to [B2B ecommerce](/content/blog/b2b-ecommerce/index.html) orders.

When it comes to acquiring warehouse space, brands have two options: buy (or build) their own, or lease warehouse space from an outside warehousing provider. Larger brands or retailers with lots of resources may be able to afford their own warehouse; for small businesses, leasing warehouse space is typically more cost-effective – especially if they partner with a warehousing partner and rent space in a warehouse in conjunction with other ecommerce businesses.

## What is a fulfillment center?

A fulfillment center is a part of the supply chain and serves as the hub for all logistics processes needed to get a product from the seller to the customer. It houses all of the activities involved in the order fulfillment process, ranging from [order picking](/content/blog/hybrid-order-picking/index.html) and processing to packaging and shipping.

As with warehousing, ecommerce brands have two options when it comes to finding a fulfillment center: either operate their own, or partner with a [third-party logistics (3PL)](/content/3pl/index.html) provider, such as ShipBob, that operates their own facility (or facilities).

## How do fulfillment centers work?

In a fulfillment center, an ecommerce business’s inventory is received and briefly stored in preparation for fulfilling customer orders. After a shopper completes a purchase on the business’s ecommerce store, that inventory is picked, packed in a box or poly mailer, and labeled for shipment. Last-mile carriers then pick up labeled packages from the fulfillment center, and transport them to the end customer.

Fulfillment centers can process both business-to-business (B2B) orders — typically a high volume of product that is sent to a big-box retailer — as well as direct-to-consumer (DTC) orders, which are shipped directly to an individual consumer’s home.

When a seller outsources [ecommerce fulfillment](/content/ecommerce-fulfillment/index.html), the fulfillment provider is completing the fulfillment process on the store owner’s behalf. This includes everything from inventory management to negotiating rates with shipping carriers.

## What is a fulfillment warehouse?

A fulfillment warehouse is another term for “fulfillment center”. A stand-alone warehouse differs drastically from a fulfillment warehouse, as a warehouse is usually a place where inventory is just stored, while a fulfillment warehouse serves many other purposes and houses many other activities besides inventory storage.

## What are the differences between warehousing and fulfillment centers?

Let’s take a deeper look at a few of the nuances that distinguish fulfillment centers from warehouses.

### Long-term storage vs. short-term storage

While there is a warehousing component to fulfillment centers — in that it does store a merchant’s inventory — the main goal of a fulfillment center is to turn inventory over quickly.

Ideally, inventory should not sit in a fulfillment center for more than a month, or the merchant may be stuck paying high inventory holding costs. Sellers should only store enough inventory in their fulfillment centers to make sure there is always enough product on hand to meet demand.

Conversely, the role of a warehouse or an [on-demand warehousing solution](/content/blog/the-downside-of-on-demand-warehousing/index.html) is to store products for long periods of time.

### Operations

Warehouses are generally static, with the main activity being receiving inventory or transferring it out. Fulfillment centers, on the other hand, are hubs of activity, full of continuous movement and much more complex operations. A fulfillment partner provides a variety of order fulfillment services in a fulfillment center, including:

- Receiving, checking, and stowing inventory
- Generating [pick lists](/content/blog/picking-list/index.html) and picking products
- [Kitting and assembling](/content/ecommerce-fulfillment/kitting-assembly/index.html) shipments
- Packing boxes
- Labeling shipments
- Shipping orders
- [Managing returns](/content/blog/ecommerce-returns/index.html)

### Frequency of pickups by shipping carriers

A [fulfillment company](/content/best-fulfillment-company/index.html) can have relationships with many different shipping carriers. Since a fulfillment center’s goal is to fulfill direct-to-consumer orders as soon as they are placed, they need shipping carriers to pick up shipments at least daily. This ensures orders will be delivered to consumers on time as promised.

Depending on the exact services a fulfillment company offers, shipping carriers may need to pick up customer orders at certain times each day for guaranteed [same-day or next-day shipping options](/content/blog/same-day-shipping-delivery/index.html) chosen by customers. Other carriers and services will have regularly scheduled pickups, for both domestic and [international shipments](/content/blog/international-shipping/index.html).

## Benefits of using a fulfillment center

Here are some of the top advantages that online sellers enjoy when they leverage a professional partner’s fulfillment centers.

### Eliminate storing inventory and packing boxes

Managing a storage space can be expensive, time-consuming, and physically exhausting. It’s no surprise that many ecommerce businesses want to avoid the hassle of storing inventory or dealing with [ecommerce warehousing](/content/blog/ecommerce-warehousing/index.html).

If you don’t want to pack boxes and run to the post office every day, a fulfillment center is a great alternative. Fulfillment providers can store hundreds of thousands of inventory units, so you don’t have to worry about running out of space – and as your order volume grows, a fulfillment partner has the flexibility to scale up its workforce and fulfill larger and larger batches of orders for you.

### Focus on the big picture

While packing boxes and shipping customer orders are critical to meeting consumer expectations, they are tasks that can be easily outsourced. Entrepreneurs and online store managers have an endless to-do list, so they must stay laser-focused on the tasks that only they can do and those that will help them scale and make money.

Outsourcing order fulfillment frees up time that you can then spend on [marketing](https://deliciousthemes.com/marketing-objectives-examples/), [customer service](https://hiverhq.com/blog/best-customer-service-software-for-small-businesses), and product management to help your ecommerce business be more strategic and less operational. There will never be enough time in the day, but using a professional fulfillment center can help sellers be more proactive in other areas of the business.

> _“At the scale we’re starting to operate at, keeping everything in-house would mean that we would be picking and packing orders all day! We have even bigger ambitions for our business going forward, including launching new products and increasing stock. So we wanted to free up our time to focus on growing our business, and knew it was time to outsource fulfillment to experts like ShipBob.”_
> _Adelina Zotta & Connor Westby, Co-Founders of [NutriPaw](/content/blog/nutripaw/index.html)_

### Leave it to the experts

[Inbound and outbound logistics](/content/ecommerce-logistics/inbound-outbound-logistics/index.html) can be challenging, and a fulfillment center is a complex machine with many moving pieces that must simultaneously work together. From [order processing and inventory management](/content/inventory-management/index.html) to preparations for peak shopping seasons, fulfillment companies are domain experts and have seen it all.

A single fulfillment center handles fulfillment operations for countless ecommerce businesses and ships millions of orders out regularly. Because of this, their volume and experience make them a strategic partner.

### Automate warehousing and fulfillment

Modern fulfillment companies keep technology at the center of their fulfillment services. This means that every step of the fulfillment process is automatically documented in real-time for ecommerce businesses to know the status of their inventory and each order in the fulfillment center without having to be there.

#### Examples of companies using fulfillment centers

Many ecommerce businesses make the choice to work with a fulfillment company after self-fulfilling orders themselves. Read a couple stories below.

### Taste Salud

When Tyler McCann and Josh Leyva first started their drink mix brand Taste Salud, they figured they could handle fulfillment themselves. But when their first 500 units sold out in just a couple hours, the pair quickly realized they were in over their head – so they started looking for a fulfillment solution that could scale with them.

With their orders being picked and packed by ShipBob, Taste Salud’s team was free to focus on growing their business – and grow they did. The brand scaled from $0 to $20M in revenue in just 3 years, and have had zero hiccups in fulfillment along the way.
> _“Personally, when I hear about people trying to do their own fulfillment, I’m kind of skeptical. Having gone through that experience of packing orders, I would tell anyone that’s thinking about starting a business that it’s really, really well worth your time to consider partnering with a professional like ShipBob. A lot of people think, “I don’t need that,” or “I don’t want to waste money on a fulfillment provider.” But in reality, partnering with an expert like ShipBob will free up so much of your time, speed up shipping, and lead to a better customer experience.”_
> _Tyler McCann, Co-Founder of [Taste Salud](/content/blog/taste-salud/index.html)_

### Our Place

As a viral success and mid-market business, the viral cookware and dishware brand Our Place knew they needed a fulfillment partner with exceptional operational capabilities. By outsourcing fulfillment to ShipBob, they found both the technology and geographic footprint that would help them scale.

Leveraging ShipBob’s dashboard, Our Place is able to manage both their DTC and B2B fulfillment through a single platform, so they can seamlessly distribute inventory to retailers like Target and Nordstrom without having to juggle two different pools of inventory.

> _“Expanding our warehouse network from 2 to 4 warehouses has translated into substantial cost savings, amounting to $1.5 million in freight expenses for Our Place. Currently, only 2% of our parcels are reaching Zone 7 or Zone 8 collectively, indicating that 98% of our parcels are reaching Zones 1 through 6. By shipping locally to lower zones, we’re achieving the most significant reductions in outbound costs.”_
> _Ali Shahid, COO of [Our Place](/content/blog/our-place/index.html)_

## Fulfillment center FAQs

Here are answers to some of the most common questions about fulfillment centers.

#### Do fulfillment centers handle inventory management?

Yes! Fulfillment centers receive inventory, sort and shelf products in their respective bin, shelf, or pallet locations, and keep track of units on-hand. The goal of a fulfillment center is to turn over stock quickly and ship orders out as efficiently as possible.

#### Can a fulfillment center do one- or two-day delivery?

Yes, many fulfillment centers offer expedited delivery options, including same-day and two-day shipping. The exact services will depend on the geographic location of the fulfillment center, the technology and operations in place, and the carriers used.

#### What kind of customer service should I expect?

Fulfillment companies should empower you to run your ecommerce business with the right tools and guidance. Depending on your order volume, you may have a dedicated account manager. Otherwise, expect a team to support your business and answer any questions you have.

### Conclusion

Each element explored in this article demonstrates how fulfillment centers have transformed the logistics landscape for ecommerce businesses. By understanding these distinctions, brands can make informed decisions about their fulfillment strategies to enhance their operations and drive growth.