Many businesses involved in commercial activity are tasked with managing the process after a product has been sold. The concepts of logistics and fulfillment pertain to the journey of goods from the producer to the consumer. However, these two concepts diverge at certain points. So, what are the differences between logistics and fulfillment?
What is Logistics?
Logistics refers to the activities involved in transporting, storing, planning, and executing the delivery of a product from seller to buyer.
The goal of logistics activities is to ensure that the necessary product is delivered to the customer at the appropriate cost and time. Logistics is often confused with transportation and distribution concepts. Transportation covers only the stage of getting the product from the producer to the consumer. However, logistics refers to a broader process that includes physical distribution, transportation, storage, customs clearance, packaging, and inventory management.
Why is Logistics Important?
The rapid development of technology has amplified the importance of the e-commerce concept. This has increased the need for effective management of all processes between the producer and consumer. At this point, logistics holds critical importance. With the rapid proliferation of e-commerce, the need for fast and cost-effective transportation of products has also increased. Consequently, the need for continuous improvement of logistic processes has emerged. Difficulties in accessing data related to order processes cause hiccups in inventory, delivery, supply chain steps, emphasizing the importance of relationships between stages of the logistics process. For a better customer experience, all steps dependent on logistics, such as production rates, inventory control, effective use of warehouse space, need to run smoothly.
What is Fulfillment?
Fulfillment is a system that companies resort to in order to lighten their workload during e-commerce activities.
Fulfillment, also known as order fulfillment, gathers all e-commerce activities occurring from the moment a business takes an order until the order reaches the consumer, into one system. This system supports the business in design, software, and hardware matters in addition to e-commerce activities, resulting in cost and time savings. The steps applied in the fulfillment process are:
- Warehouse management,
- Order management,
- Product packaging and shipping process,
- Customer communication support.
Who Can Use Fulfillment Services?
All businesses and companies, whether they are new to e-commerce activities or are already professionally conducting them, can use fulfillment services. These companies may opt for e-commerce fulfillment services to accelerate the product delivery process and thereby increase customer satisfaction. Regardless of their size, businesses of various scales can benefit from this method, using it according to their needs. For instance, while some businesses may aim to shorten product delivery time, others may prefer to use fulfillment services to enhance interaction with customers.
What are the Advantages of Fulfillment Services?
With this system, preferred by companies wishing to save on costs and time, e-commerce services are centralized. Companies initiating a project with fulfillment don’t have to manage technical, design, or software processes. Instead, they contract a different company providing fulfillment services to fulfill these needs. Consequently, the company providing the service takes care of all preparations, from technical and operational needs to warehouse preparations. The products planned for sale are stored, and operational information such as email addresses and phone numbers are prepared. The company utilizing this service aims to reduce costs and increase sales. While products can be sold in a short period, their delivery time to customers is also shortened.
Logistics vs Fulfillment: What are the Differences?
At first glance, logistics and fulfillment can seem quite similar. In fact, these terms can be used interchangeably. However, these two concepts differ from each other. Both cover the process of goods going from producer to consumer, but the steps applied during this process differ. Logistics is used in all buying and selling processes, both digital and physical. Fulfillment, on the other hand, is used especially effectively in the field of e-commerce. The stages these two methods encompass are:
Stages of Logistics:
- Transportation and physical distribution,
- Supply chain,
- Inventory management,
Stages of Fulfillment:
- Warehouse management,
- Order management,
- Logistics management,
- Customer relations.
As can be deduced from the above listing, the concept of logistics covers physical processes, while fulfillment primarily covers management processes. In logistics, each step proceeds as a process connected to the other. Fulfillment, on the other hand, provides services listed above according to the needs of companies. These services don’t have to follow a specific order. Fulfillment also encompasses digital activities such as software and design, meeting the needs of companies under one umbrella by providing consolidated services.