Fulfillment centres in India: How do they work?

Fulfilment centres have become an integral part of the logistics industry. These firms handle the storage and last mile delivery of your products assuring the safety of your shipment. Their services begin with inventory storage to doorstep delivery to your customers. These services are usually extended to B2C brands.

What is a fulfilment centre?

A fulfilment centre is an establishment operated by a 3PL logistics provider. This establishment receives packed goods from clients that are to be shipped to the latter’s customers. The centre manages the inventory of the clients and handles order processing. This is done by integrating the software of the centre systems and the retailer.

Benefits of a fulfilment centre

Fulfilment centres eliminate the time spent on the logistics part of a business. As these services are managed by logistics experts, you have better chances at meeting delivery timelines promised to customers.

Here are some of the benefits of a fulfilment centre:

• Real-time updates of products in transit

Fulfilment centres will process your orders and ship them to customers using delivery executives. You will be able to track your shipment from the fulfilment centre to the doorstep of your customer using the integrated software mentioned above.

• Fast order processing

When you sign up with a reputable 3PL service provider your products are picked and delivered using the best technology supervised by logistics professionals. This means that your products are shipped fast with the help of software and the well-planned logistics network design set up by the provider.

• Eliminates inventory management

You can manufacture your products and send the entire shipment to the centre to be stored until they are ordered. This means you can cut down on space and labour required for storage and inventory management.

• Helps you to expand your product collection

Since the 3PL service provider is hosting your entire inventory, you can increase your product variety. The logistics operation handled by the fulfilment centre is scalable and can accommodate all your growing requirements.

• Reduced costs

Since your entire logistics operation is handled by the fulfilment centre, you can cut down the expenses on staff, warehouse space, order processing and fulfilment software, etc.

Examples of fulfilment centres in India

Given below are the examples of some fulfilment centres in India that are most popular among retailers:

• Flipkart fulfilment centre

Flipkart is an Indian e-Commerce company that dominates the logistics industry with a variety of logistics products. Its fulfilment centre called the Flipkart Seller Hub features:

• Fulfilment centre space
• Faster delivery of products
• Quality check of products by experts
• Packaging

Flipkart has over 60 fulfilment centres spread across the country. Their website has a list of Flipkart fulfilment centres (https://seller.flipkart.com/sell-online/flipkart-fulfilment) across the country which powers regional sellers to sell their goods nationally.

• Amazon fulfilment centre

Amazon is another one of the popular e-Commerce companies that has a huge footprint in the Indian logistics industry. The company has over 70 fulfilment centres located across the country. However, these centres are only available for the sellers on Amazon. With Amazon’s same-day and next-day delivery options, many e-Commerce companies thrive on this portal.

• Shiprocket fulfilment centre

A popular logistics startup, Shiprocket offers businesses fulfilment centres and inventory management services. They offer their clients:

• Storage
• Packaging
• Last mile delivery
• B2B logistics
• Reduced order to ship time

How does a fulfilment centre work?

This is the basic process followed by a fulfilment centre:

Step 1: Receive products from clients

Step 2: Store the products and manage inventory

Step 3: Process orders

Step 4: Pick the correct item

Step 5: Assign delivery delivery executive

Step 6: Send the product for last mile delivery

Also read: What is awaiting fulfilment?

Fulfilment centre vs warehousing

There are a few differences between a fulfilment centre and a warehouse. Here a few points that distinguish fulfilment centre and warehouse:

• Warehouse provides only provides storage area for goods while fulfilment centres offer packing and shipping.
• Warehouses are operated by businesses themselves to store their products, but fulfilment centres are owned by 3PL logistics providers who handle products from multiple companies.
• Warehouses are for long-time storage of products. Placing inventory in a fulfilment centre means that you are looking to sell your products in a quick turnaround time.
• The role of warehouses is to store products while the role of fulfilment centres is to fulfil orders, which means picking and sending the product to a customer.

Other services provided by fulfilment centres

While the primary task of a fulfilment centre is to store, pick and ship goods to customers, the fulfilment companies provide other services as well. These value-added services could be activities like assembling parts to make a finished product.

These services are a way of 3PL services to improve their offerings according to their customers’ needs and market trends. Here are some examples of value-added services offered by a fulfilment centre:

• Reverse logistics
• Custom packaging and labeling
• Branded tape and marketing inserts on the package
• Assembling products to create a new SKU code
• Lite testing of electronic items

Fulfilment centres make shipping faster and returns easier. If you have a high volume of sales, you can negotiate better pricing for managing your logistics activity. This will allow you to offer free shipping or other shipping discounts to your customers.

If you have signed up with a large fulfilment centre, you can even arrange for the returns to be sent to the fulfillment center rather than to you. This prevents you from charging customer restocking fees.