Warehousing is the process of storing physical inventory for sale or distribution. Warehouses are used by all different types of businesses that need to temporarily store products in bulk before either shipping them to other locations or individually to end consumers.
For instance, many e-commerce businesses will purchase products in bulk from their suppliers, who ship them to their warehouses for storage. When an end customer then places an order from the e-commerce site, the business — or its third-party fulfillment provider — picks and packs the product from the warehouse and ships it directly to the customer.
E-commerce has driven rapid growth throughout the warehousing industry. In fact, the market has doubled in the last decade as businesses around the world invest heavily in their supply chains to get goods to consumers and businesses faster and more efficiently.
This isn’t only limited to e-commerce businesses. Most physical retail businesses have limited space in their stores to hold inventory but still need to keep up with demand. Having additional inventory available in nearby warehouses helps ensure they are always able to restock their stores during high volume times like the holidays, even if their suppliers are in other countries and are slow to produce and ship new products.
Warehouse vs. distribution center: What’s the difference?
While a warehouse is technically any building that stores physical products regardless of the purpose, a distribution center is more specifically a type of warehouse designed for fulfilling orders for the purpose of distribution to other businesses or consumers. Distribution centers, therefore, need to be designed for not only compact storage but also efficient picking, packing, and shipping.