{"id":1228,"date":"2021-03-22T08:35:32","date_gmt":"2021-03-22T13:35:32","guid":{"rendered":"https:\/\/www.shipbob.com\/au\/blog\/distribution-center\/"},"modified":"2025-11-17T23:02:40","modified_gmt":"2025-11-17T23:02:40","slug":"distribution-center","status":"publish","type":"blog","link":"https:\/\/www.shipbob.com\/au\/blog\/distribution-center\/","title":{"rendered":"Distribution Centre Benefits and Key Processes Explained"},"content":{"rendered":"\n

Table of Contents<\/p>

** Minutes<\/p><\/div><\/div>\n

What is a distribution centre?<\/a><\/p>\n\n\n\n

4 differences between a distribution centre vs. a warehouse?<\/a><\/p>\n\n\n\n

What are the essential distribution centre processes?<\/a><\/p>\n\n\n\n

How ShipBob\u2019s distribution centres benefit ecommerce stores<\/a><\/p>\n\n\n\n

Conclusion<\/a><\/p>\n\n\n\n

Have your own warehouse?<\/a><\/p>\n\n\n\n

Distribution centre FAQs<\/a><\/p>\n\n\n\n

<\/a><\/p>\n<\/div>\n\n\n\n

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Key Takeaways<\/h2><\/span><\/div>
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1<\/p><\/div>

Distribution centres are specialized facilities that store finished goods, streamline the picking and packing process, and ship products to their final destinations, offering value-added logistics services beyond traditional warehousing.<\/p><\/div><\/div>\n\n\n\n

2<\/p><\/div>

Unlike warehouses, distribution centres focus on customer-centric processes, providing services such as order fulfilment, returns management, and direct integrations with ecommerce platforms to enhance supply chain efficiency.<\/p><\/div><\/div>\n\n\n\n

3<\/p><\/div>

Distribution centres partner with major shipping couriers to expedite order processing and shipping, utilising technology to optimise delivery routes and reduce shipping costs.<\/p><\/div><\/div>\n\n\n\n

4<\/p><\/div>

ShipBob’s distribution centres offer a global network with advanced technology integration, allowing ecommerce businesses to save on logistics costs, improve shipping times, and focus on business growth.<\/p><\/div><\/div>\n<\/div><\/div>\n\n\n\n

The concept of a traditional warehouse is simple; it\u2019s a large building that stores bulk quantities of product or ecommerce inventory<\/a>. <\/span><\/p>\n\n\n\n

In order for a business to grow and compete with other brands that sell similar items, they need more than just inventory storage \u2014 they need expertise, technology, and processes to help streamline their <\/span>ecommerce supply chain<\/span><\/a>. <\/span><\/p>\n\n\n\n

That\u2019s why distribution centres are replacing traditional warehousing<\/a>. Rather than businesses storing inventory in a warehouse and handling fulfilment themselves, ecommerce businesses rely on distribution centres that provide value-added logistics services to meet customer demand. <\/span><\/p>\n\n\n\n

Distribution centres offer the fulfilment infrastructure and technology that help online stores offer affordable, accurate, and fast shipping. <\/span><\/p>\n\n\n\n

In this guide, you will learn how distribution centres work, what services they provide, and how they support <\/span>direct-to-consumer (DTC) brands<\/span><\/a>.  <\/span><\/p>\n\n\n\n

What is a distribution centre?<\/h2>\n\n\n\n

A distribution centre is a specialized warehouse that serves as a hub to strategically store <\/span>finished goods<\/span><\/a>, streamline the picking and packing process, and ship goods out to another location or final destination. Often used interchangeably with the term fulfilment centre<\/a>, distribution centres handle<\/span> order fulfilment<\/a> and other value-added services.<\/p>\n\n\n\n

4 differences between a distribution centre vs. a warehouse?<\/h2>\n\n\n\n

\u201cDistribution centre\u201d and \u201cwarehouse\u201d are terms many people think are one and the same, but there are some key differences. <\/span><\/p>\n\n\n\n

At its core, a traditional warehouse only stores inventory (typically on a long-term basis), where a distribution centre is a facility that briefly stores inventory until orders get fulfilled and then sent to their next or final destination. <\/span><\/p>\n\n\n\n

Here is a deeper dive into the main differences between a distribution centre and a warehouse: <\/span><\/p>\n\n\n\n

1. Storage management<\/h3>\n\n\n\n

Warehouses<\/b> offer inventory storage<\/a>. When you think of a traditional warehouse, you think of a large industrial building stocked with shelves of inventory. <\/span><\/p>\n\n\n\n

Some retailers will own or lease a warehouse to store inventory, or leverage a <\/span>co-warehousing space<\/span><\/a> that allows multiple businesses to store inventory and only use the space they need. <\/span><\/p>\n\n\n\n

Distribution centres<\/b> are far more agile. They are typically operated by <\/span>third-party logistics<\/span><\/a> (3PL) companies that offer warehousing solutions as well as fulfilment capabilities. While inventory<\/span> is stored in a distribution centre (often, not for long), it streamlines the fulfilment process and ships orders to customers efficiently.<\/span><\/p>\n\n\n\n

2. Customer-centric processes<\/h3>\n\n\n\n

Warehouses<\/b> provide space and don\u2019t offer value-added services for customers. Just like a residential storage unit, you pay for the space you need. <\/span><\/p>\n\n\n\n

Distribution centres<\/b> go beyond storage services to help ecommerce businesses <\/span>optimise their supply chain<\/span><\/a>. They offer services and expertise in inbound and outbound logistics<\/a>, from receiving inventory to shipping orders directly to consumers. This provides a more customer-centric approach, as services like packing orders for a good unboxing experience<\/a> or managing returns<\/a> can be done. <\/span><\/p>\n\n\n\n

Distribution centres operated by 3PLs can provide customers with dedicated support as well as the infrastructure, technology, resources, and best practices to save on both logistics costs<\/a> and time by taking care of time-consuming logistics tasks. <\/span><\/p>\n\n\n\n

3. Shipping workflows<\/h3>\n\n\n\n

Warehouses<\/b> typically don\u2019t offer shipping solutions and services to ship each order to customers or other retailers. To get inventory out of a warehouse, you may need to arrange freight<\/a> yourself. <\/span><\/p>\n\n\n\n

Distribution centres <\/b>partner with major shipping couriers that pick up orders daily, so orders can be shipped as soon as possible. <\/span><\/p>\n\n\n\n

A tech-enabled 3PL streamlines the shipping process to <\/span>reduce shipping costs<\/span><\/a> and speed up <\/span>last-mile delivery<\/span><\/a>. They offer direct integrations with ecommerce platforms to send orders automatically to the nearest distribution centre. This connection enables each customer order to be automatically sent to a fulfilment centre to get picked, packed, and shipped out. <\/span><\/p>\n\n\n\n

For example, ShipBob fulfils B2C orders the same day<\/span> as long as they are imported into the ShipBob dashboard by the time of the outbound fulfilment SLA (ranging from noon to 6pm local time of the fulfilment centre fulfilling it, depending on the location), so the couriers can pick them up and ship them out quickly. <\/span><\/p>\n\n\n\n

We also enable faster shipping times by analising optimal delivery routes and fulfilling orders from the most efficient location.<\/span><\/p>\n\n\n\n

Once shipped, order tracking info<\/a> is pushed back to the ecommerce store and shared with the customer.<\/span><\/p>\n\n\n\n

4. In-house processes<\/h3>\n\n\n\n

Warehouses<\/b> are typically just designed to store stuff, and so they lack in-house processes. This means they don\u2019t offer ways to help you save on storage costs or find other ways to optimise your retail supply chain<\/a> by implementing automation and technology. In fact, they often don\u2019t need a technology piece and only need to bill based on how much space you use. <\/span><\/p>\n\n\n\n

Distribution centres<\/b> focus on efficiency, order accuracy and speed by implementing best practices and technology, and many aggregate fulfilment data to continuously look for ways top improve the entire <\/span>ecommerce fulfilment<\/span><\/a> process.<\/span><\/p>\n\n\n\n

Technology is key here, as many 3PLs that operate distribution centres offer direct integrations with ecommerce platforms that connect with their <\/span>warehouse management system (WMS)<\/span><\/a> to automatically send orders to the closest distribution centre to be picked, packed, and shipped. <\/span><\/p>\n\n\n\n

By connecting your online store to a 3PL\u2019s technology, orders are automatically sent to the closest distribution centre where inventory is stored. From there, the <\/span>retail fulfilment<\/span><\/a> process begins and a fulfilment expert picks, packs, and ships the order to your customer for you. <\/span><\/p>\n\n\n\n

What are the essential distribution centre processes?<\/h2>\n\n\n\n

A distribution centre\u2019s processes are designed to quickly process orders by picking, packing, and shipping packages to your customers in the most-effective way. <\/span>Here is what a typical distribution centre process<\/a> looks like: <\/span><\/p>\n\n\n\n

1. Receiving and storing inventory<\/h3>\n\n\n\n

Warehouse receiving<\/a> and then storing inventory refers to delivering, unloading<\/a>, and optimising storage space in one or more distribution centre locations. <\/span><\/p>\n\n\n\n

A well-established warehouse receiving process can make the <\/span>inventory management<\/span><\/a> and fulfilment cycle easier, more cost-effective, and more efficient. But it takes a lot of effort as it involves several important steps including having proper documentation that must be done right to avoid issues later on.<\/span><\/p>\n\n\n\n

Once all inventory is unloaded and inspected, the next step is to store the received inventory. <\/span>Depending on the size and quantity of products, inventory can be stored either on a palette, a shelf, or a bin. <\/span><\/p>\n\n\n\n

2.  Picking and packing<\/h3>\n\n\n\n

A tech-enabled distribution centre managed by a 3PL works to optimise the warehouse picking<\/a> process. In most cases, a <\/span>warehouse management system<\/span><\/a> (WMS) is used to automatically assign similar orders with inventory in the same area of the warehouse, so pickers can reduce the number of steps required to pick orders. This process creates a more efficient workflow by improving speed and <\/span>order accuracy<\/span><\/a>. <\/span><\/p>\n\n\n\n

From there, a <\/span>picking list<\/span><\/a> is generated, which includes the items ordered, quantity, and where each product is located in the distribution centre. Each unit that\u2019s picked is scanned from the inventory container or storage space so inventory counts are updated in real time, providing up-to-date stock levels for the business.<\/span><\/p>\n\n\n\n

When all items in an order have been picked, the next step is to securely pack them and affix a <\/span>shipping label<\/span><\/a>. <\/span><\/p>\n\n\n\n

3. Restocking<\/h3>\n\n\n\n

Efficient inventory restocking<\/a>, also known as inventory replenishment<\/a>, is an important inventory management process. You want to make sure you always have enough inventory stored and ready to be picked and packed as soon as each order comes in.<\/span><\/p>\n\n\n\n

Stockouts and backorders are common inventory issues that occur when you fail to track inventory levels, <\/span>forecast demand<\/span><\/a>, and restock products efficiently to meet demand. <\/span><\/p>\n\n\n\n

If you\u2019re using multiple warehouses, then failing to restock items (especially <\/span>high-demand products<\/span><\/a>) at one of your locations can result in a <\/span>split shipment<\/span><\/a> (i.e., an order with multiple items that get fulfilled and shipped separately). <\/span><\/p>\n\n\n\n

Distribution centres operated by 3PLs help you avoid understocking (and overstocking) using <\/span>inventory management software<\/span><\/a> and other <\/span>inventory automation<\/span><\/a> tools. This provides you with data and visibility into real-time inventory levels in various locations, so you can easily stay on top of <\/span>inventory control<\/span><\/a>, automate <\/span>reorder points<\/span><\/a>, and track inventory trends. <\/span><\/p>\n\n\n\n

4. Returns management<\/h3>\n\n\n\n

A great returns management process<\/a> can significantly improve your button line by increasing customer satisfaction by <\/span>12%<\/span><\/a> and decreasing logistics costs by 4%. <\/span><\/p>\n\n\n\n

If you leverage a warehouse, you would need to implement your own system to process returns and have your staff put items back on shelves quickly. <\/span><\/p>\n\n\n\n

By using a distribution centre, you have the option to lean on a distribution partner<\/a> or 3PL partner to handle returns for you. For instance, ShipBob simplifies returns management with direct integrations to leading returns platforms.<\/span><\/p>\n\n\n\n

How ShipBob\u2019s distribution centres benefit ecommerce stores<\/h2>\n\n\n\n

ShipBob offers distribution centres located across the US, Canada, Europe, the UK, and Australia (with more locations continuously being added). ShipBob\u2019s entire distribution network<\/a> is powered by best-in-class fulfilment technology.<\/span><\/p>\n\n\n\n

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