If you run an online business and want to grow it, you also need to shift your mindset. To stay competitive, you need to expand your customer reach and provide fast, affordable shipping. Therefore, scaling your business means you need to invest in optimizing your logistics facilities.
Logistics facilities play a key role in optimizing a business’s supply chain because they determine how efficiently a shipper allocates inventory and fulfills orders.
What is a logistics complex? In this article, you’ll learn more about how logistics facilities work, the different types, and why many online companies choose to partner with third parties that offer extensive distribution networks.
What Is a Logistics Facility?
Logistics facilities are warehouses that offer storage space and additional logistics services such as direct shipping to customers.
It’s not uncommon for logistics businesses to offer more than one location within their network. This allows you to strategically distribute inventory across multiple locations, streamline picking and packing processes, and ship goods to other locations or customers.
However, different logistics facilities offer different services. For example, some logistics facilities focus solely on moving goods from one distribution center to another, while others focus on storing inventory, fulfilling orders, and shipping orders to customers.
Types of Logistics Facilities
Not all logistics facilities are the same. There are various logistics facilities that offer different services, ranging from warehousing to order fulfillment.
Shippers need to understand their business needs before choosing the type of logistics facility to store inventory or ship products.
Here is an explanation of the various types of logistics services you can choose from:
Fulfillment Centers
This logistics facility is a physical location operated by a third-party logistics (3PL) provider that not only stores inventory but also ships orders on your behalf.
Fulfillment centers are designed to streamline the shipping process, reduce logistics costs, and speed up final delivery to customers.
Fulfillment centers are often supported by 3PL software that allows you to connect your online store to these facilities. This enables you to pick, pack, and ship orders placed online, which are automatically routed to the nearest fulfillment center as soon as possible.
Storing inventory at a fulfillment center and outsourcing shipping to a third party simplifies inventory management, facilitates the fulfillment of customer orders, and reduces the time and money spent on packaging and shipping.
Distribution Centers
Although the term “distribution center” is often used to refer to fulfillment centers, some distribution centers do not offer shipping services for online stores.
Some 3PLs view their fulfillment networks as distribution centers due to their ability to distribute inventory across multiple locations within the same network for efficient product distribution. Thus, orders can be fulfilled from the fulfillment center closest to the customer.
In some cases, distribution centers act as transit hubs for products that need to be moved further along the supply chain or redistributed. Many large retailers use this method for internal transfers, such as to supply their branches.
Sometimes products are shipped to a distribution center to be transferred to another mode of transportation to efficiently reach their next destination, whether it’s a consumer or another warehouse.
As you grow your business and optimize your logistics system, third-party logistics facilities provide the solution. From product packaging and returns management to inventory planning and marketing support, our extensive network of logistics centers makes it easy for you.