Fulfillment Centers, Drop shipping, and 3PL’s…oh my!
When it comes to e-commerce, there are many ways to get your products from a supplier to a customer. But what exactly is the difference between a fulfillment center, drop shipping, and 3PL?
Fulfillment Center: This is the most common mode of getting your products to customers. A fulfillment center is essentially a warehouse where all of your inventory is stored until it's time to be shipped out. The fulfillment center then fulfills orders by packing them up and sending them to their destination. While you will still pay for postage of your products, because the quantity of packages they ship fulfillment centers usually are able to secure better shipping rates.
Drop Shipping: Drop shipping is when you sell goods from an online store (or any other type of business) that don't actually belong to you. You'll have an arrangement with the supplier so that they ship the goods directly to your customers, but they'll be billed from your company rather than directly from the supplier. This is currently a big trend within the eCommerce industry and while it is still a good option, because of its popularity you may want to vet the companies you are considering.
3PL: Third Party Logistics (or 3PL) refers to a company that helps streamline your supply chain and manage inventory among multiple suppliers or warehouses. It is not uncommon nowadays for 3PL to be used interchangeably with fulfillment centers or warehouses.
These terms are used interchangeably, so your best bet when deciding what to use is to analyze what your actual needs are and what services each offer. If you’re looking for a new way to fulfill your products, check out our fulfillment option!