Years ago, you might not have seen a big difference between warehouses and distribution centers. In fact, you might still hear professionals refer to the two interchangeably, but there is a difference. As technology continues to advance and the logistics industry grows alongside it, there are some significant differences between the two locations.
We’re going to explain the difference between warehouses and distribution centers. Then you’ll know which one is the right solution for your needs. Make sure to read until the end because you might be surprised to learn that you can have both a warehouse and distribution center all in one location!
What is a Warehouse?
To explain it simply, a warehouse is a location that stores your inventory/freight (this is not a manufacturing facility). You can build, run, and manage your warehouse in-house or outsource to a third-party company.
Here’s a quick rundown of how a warehouse works.
- Staff receives inventory
- They place the freight in the correct spot for easy management
- They store the freight
- When you’re ready to ship, you arrange for pickup
- Staff ships out your items when the truck arrives
The warehouse system may differ based on the services you need. Depending on your freight and needs, you might need:
- Temperature-controlled spaces
- Refrigeration storage
- Short-term or long-term storage options
- Location-specific warehouse
- Frequent shipping locations
- Near seaports, railways, or airports
What is a Distribution Center?
Unlike a warehouse, a distribution center (DC) is much more than a place to store inventory/freight. Although you can manage a distribution center in-house, it’s more common to outsource to a third-party logistics (3PL) provider.
Distribution centers are a fundamental element of the fulfillment process. The primary purpose of these centers is to receive freight and then ship it back to its destination. And there are many services that staff might execute before it leaves for its destination.
Here’s an example of how a distribution center works for a retailer with multiple store locations.
- The DC will store your inventory in ready-to-ship boxes (typically near delivery locations).
- The DC staff manages these items and informs the business of low inventory.
- When one of the retail locations needs a shipment, the DC staff picks and packs the inventory boxes.
- Then, the staff loads it onto the appropriate truck for delivery.
Like warehouses, DC offers many services to fit the needs of its customers. Services can include:
- Inventory management
- Pick and pack
- Quality control
- Reverse logistics
- Sort and seg
- Truckload sorting
5 Key Differences Between Warehouse and Distribution Centers
Now that you understand what to expect from these two locations, here are the most significant differences between a warehouse and a distribution center.
Warehouse: Short-term or long-term options.
DC: Shorter storage times with a focus on a faster flow rate.
Warehouse: You’re responsible for arranging pickup and delivery.
DC: They manage inbound and outbound transportation and provide tracking information and updates.
Warehouse: Their primary focus is on correctly storing inventory.
DC: Their primary focus is being a logistics hub for storing and shipping orders.
Technology and Security
Warehouse: Technology focuses on safely securing products.
DC: Uses the latest technology to process orders, product management, transportation logistics, and safely secure inventory.
Value Add for Your Customers
Warehouse: They focus on serving you. The only benefit for customers is a potential shorter transit time if the warehouse location is near their destination.
DC: They provide services focusing on fast and efficient transportation, inside delivery and product placement services, and even returns management.
You Can Have Both: Warehousing and Distribution Services
While there are several differences between warehouse and distribution centers, did you know you could have both? Some 3PL providers offer distribution services at their warehouse locations. You now have the option to store long-term inventory near high-traffic areas without the responsibility of managing the transportation logistics.
How Beitler Logistics Services Can Help You
BLS is a 3PL provider that offers its customers both warehousing and distribution services. They offer the benefit of outsourcing while still providing you with the level of control you want. Whether it’s a hands-on approach with regular updates or a hands-off approach knowing inventory is taken care of and arrives at its destination on time – you can have both!