Distribution Center vs. Warehouse: What's the Difference?


While you might think a warehouse and distribution center are one in the same, they are, in fact, different.


Looking from the outside in, you might not be able to tell the difference, but once you step inside, you'll see they aim to meet different goals and are operationally unique. Lastly, each plays a very different role when it comes to effectively managing your supply chain and order fulfillment.


In this post, we'll explore the differences between a warehouse and a distribution center.


What is a Warehouse?


A warehouse is a commercial building where goods are stored for an extended period of time. Used mainly by manufacturers, exporters or wholesalers, warehouses provide the controlled environment needed store, sort and ship goods. Typically found in industrial areas, warehouses receive goods by truck and include loading docks to allow deliveries to be received. Other types of equipment include pallets, forklifts and shelving to store products.


Warehouses benefit from the use of wholesale distribution software that makes it easy to manage, maintain and ship out stock in an organized fashion. Also, without strong fulfillment services, warehouse managers will struggle to maintain a strong pick, pack and ship process and satisfy customers. This is why the right type of warehouse inventory management software should be used to streamline your warehouse operations.


What is a Distribution Center?


A distribution center is designed to store products for a shorter time period when compared to a warehouse. Products are typically shipped in and out on a much faster pace. Distribution centers also typically receive more complex orders, requiring the latest technology to support order processing as well as inventory management strategies like wholesale minimum order quantity.


A distribution center, versus a warehouse, is a critical part of the supply chain. Without a smoothly run distribution center, retailers and eCommerce companies would be unable to get the products they need to satisfy customers, or retailers. For this reason, the distribution center today is truly the heart of the modern retailer's supply chain.


Warehouse vs. Distribution Center


When deciding between a warehouse or distribution center, it depends on your need and the type of customers you have. Give thought to who your core customer base will be and strategize a plan around those needs. If you are a manufacturer that stores and then sells products, then you'll likely need a warehouse. If you're selling to multiple retailers and selling fast-moving products, then you'll likely need a distribution center.


Why does this matter?


Your buyers expect an easy B2B buying experience. Making the decision between a warehouse or distribution center is going to affect your order fulfillment or warehouse management processes, which are the secret sauce to happy customers. By making the decision of how to house your products with your customer's purchasing needs in mind, you can set yourself up for a streamlined fulfillment process, and make sure your deliveries are made on time, every time. If you want an optimized, streamlined supply chain to ensure ongoing customer satisfaction, start by setting it up correctly to begin with.


If you'd like to learn more about how Systum can help you use several types of inventory management systems to run your warehouse or distribution center, fill out the form below.


Categories: Wholesale Distribution

Tags: wholesale distributor

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