Some of our Business to Business (or B2B) clients ask us about the logistics of the courier and transport process, and one of the topics which often comes up is around warehouses and distribution centres. It’s easy to understand the confusion as both are large covered buildings or spaces where goods are stored before being shipped to the consumer. There are however several factors which may make one or the other a better fit for the needs of Australian businesses. To point out the differences between the two, here at Pelican Carrying we have written the below blog to answer your questions:
What is a Distribution Centre?
A distribution centre generally stores goods for much shorter periods of time. They are interim sorting points before goods are re-distributed to their final destination of customers, stockists or wholesalers. Distribution centres are largely driven by demand and their purpose is to fill and ship orders as quickly as possible. For this reason, they generally only house finished products which are ready to be shipped, rather than raw materials. Logistically, distribution centres are usually located closer to final customers or retailers. They generally are equipped with more advanced processing technology than warehouses however this will often make them more expensive, making distribution centres a better fit for businesses with very high or fast turnover of stock.
What is a Warehouse?
A warehouse is again a large storage facility, but it’s generally used for longer-term storage of the goods of businesses or individuals. Inventory tends to stay in a warehouse for longer periods of time with less advanced facilities, making it more cost effective than a distribution centre. Warehouses typically use tiered racking systems to maximise the amount of storage space available, as quick and easy access is less important than in a distribution centre. However, warehouses are not just for storing goods, they’re often used by businesses who have products that don’t sell particularly quickly or even when products are made but need to be stored before going on sale. Warehouses are typically less technologically-sophisticated than their distribution centre counterparts.
When it comes to deciding which option is right for your business, there is no universal answer. It will ultimately depend on your specific needs and requirements. Do you require more long or short-term storage etc? Is budget or a speedy delivery a bigger consideration for you? Here at Pelican Carrying we are industry leaders in transport and courier services in and between Sydney, Newcastle and the Central Coast. To discuss your transport needs, give us a call or send us an email today!