How a Fulfillment Center Works

Most businesses have a centralized distribution center to warehouse goods for final delivery. But what if you could cut costs and still get the product to your customers as fast as possible? This is precisely what a fulfillment center does. These are the places where goods can be processed, packed, and shipped to reach customers faster. Instead of having separate warehouses for various types of goods, a fulfillment center combines them into one location. Red Stag provides an excellent overview of 3PL services at If you want to learn more about fulfillment centers, the following guide will help you immensely.

What is a Fulfillment Center?

A fulfillment center is a facility where goods are assembled and distributed to retailers, distributors, and consumers. This can range from a small factory specializing in a specific product type to a huge warehouse that stocks numerous products.

How Does it Work?

A fulfillment center is usually a commercial warehouse or distribution center. At the center, manufacturers can store their goods and load them onto trucks, trains, or airplanes that take them to various destinations. From there, the goods are distributed to retailers, wholesalers, or distributors through a network of warehouses, stores, and other distribution centers around the country. Fulfillment centers also help manufacturers keep track of their inventory so that they can plan accordingly for high demand and differentiate between backorder vs out of stock products.

What can Go into a Fulfillment Center?

The product type and business model are essential when hiring a fulfillment center. Although they offer support for various products, there are product-specific ones too. For example, centers handling chemical and other flammable materials don’t house normal products.

Packing and Packaging

The primary job of a fulfillment center is to package the order and send it to the customer. Usually, the client will tell the requirements, and the center will do its best to accommodate. Packing and packaging is a lot of hard work and requires training; luckily, fulfillment centers are a cheaper option for small businesses.

Shipment Tracking

One of the main responsibilities of a fulfillment center is to offer excellent shipping solutions. Depending on the client’s requirements, they can ship the order by road, sea or air. Additionally, since they are in the market, they develop special relations with shipping companies; as a result, they will offer their clients the fastest and most inexpensive routes.

High-end Software

The top-of-the-line software handles all the work in a fulfillment center. They are called management software and help the company maintain a healthy inventory, offer order tracking solutions and manage the returns. These software compile reports allowing businesses to monitor their inventory and order processing. Fulfillment centers are great for smaller businesses that are looking to cut costs and want to get their products to market quickly. They take away the hassle of logistics and allow a business to flourish by streamlining order processing and delivery system. Additionally, you can enter new markets by partnering with a fulfillment center as they can deliver your product to all corners of the world.