Warehouse vs Distribution Center vs Fulfillment Center: What Do These Terms All Mean?

A warehouse, distribution center, fulfillment center, big box industrial and logistics hub are all types of facilities that store and distribute goods, but they serve different purposes and have different functions.
However there isn't a consensus on what these terms actually mean and more often than not they are used interchangeably (and often incorrectly, particularly when it comes to the media).
In this video I explore what these buildings are in broader sense, and also give some examples of why there are no standardized definitions.
For a very quick summary, warehouses are used for long-term storage, DCs are used for short-term storage and distribution, and FCs are used for fulfilling online orders for e-commerce companies. In sounds simple (and mostly it is!) but there are some important nuances to discover.
Also, let me know in the comments if you prefer buying things online or in-store. I'm also curious what you bought last!
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Sources I used for this video:
NAIOP Industry Terms and Definitions: www.naiop.org/...
CBRE 2023 North America Industrial Big Box: www.cbre.ca/in...
JLL UK Big Box 2022: www.jll.co.uk/... insights/research/uk-big-box-2022
Colliers Big Box Buildings and Big Box Money: knowledge-lead...
CNBC's video Why Warehouses Are Taking Over the US: • Why Warehouses Are Tak...
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🙋‍♂️ Chad Griffiths, MBA, SIOR
#industrialize #industrialinsiders #industrialrealestate

[@industrialize]

What was the last thing you ordered online? Mine is ultra-cliche but yesterday I ordered Traeger pellets from Amazon and a new vest from LLBean 🤠

[@harrylawrealestate]

A Noise cancelling microphone headset

[@industrialize]

@@harrylawrealestate Great purchase! It will come in handy when you come on the pod

[@warehouseinvestor5036]

laser measure

[@digitaldaemon74]

Another great video. This actually helps to articulate questions for planning with owner's and AHJ's, good stuff.

[@industrialize]

Thanks for the comment John!

[@ImageBears]

Hey Chad, I am an Intern at a CRE firm in Boston who specializes in Industrial. I've been here a few weeks and I'd love to chat with you regarding my experience thus far at a successful brokerage, what I have learned, the "recruiting and interviewing" experience, and what to expect coming to a brokerage, culture, work/life balance as an intern and other things of the like. Maybe a video like that would be helpful to those looking into the space. I'd be happy to give you all of the info around it! You've been a tremendous help with your videos in the space, and they have helped me prepare to become an Industrial-specialized RE broker. Thank you for your commitment and consistency!

[@industrialize]

Great idea for a video Nils! Shoot me an email (preferably using the email found in my ABOUT page) and we’ll set up a time to chat!

[@invtrk1046]

I'm from the UK and in this industry. It's interesting that everything you mention is globally applicable: all the terms, the general concepts, typical standards. Whereas with other types of buildings and construction methods, there is a large divergence in pretty much everything throughout the world. I really appreciate Chad's content and knowledge of this niche and his videos. Keep up the good work mate.

[@industrialize]

Thanks for the comments! Interesting to hear how those terms are consistent in the UK too. Great point about how crazy (and frustrating) the amount of variance there is in the construction industry. It would make it very difficult, if not impossible, creating any type of guide book that is applicable universally.

[@danielleunsworth3842]

Great explanations Chad, very clear and easy to understand. I prefer ordering things online, the convenience is just too easy especially as a busy mom! Saves me tons of time.

[@industrialize]

Thank you Danielle, I greatly appreciate the comments!

[@RonaldRohdeLaw]

Great explanation. Where does intermodal fit in? Distribution sub type?

[@industrialize]

I'd agree, distribution subset. Wouldn't be overly common for traditional warehousing to be in those high valued areas and FC's tend to be closer to the end user to minimize last mile delivery costs. I did a video on rail + industrial previously too: kzbin.info/www/bejne/baCQmJxno818pMU

[@RonaldRohdeLaw]

@@industrialize Excellent

[@anhhuynguyen4969]

I prefer buying things offline, I want to see the product physically, try it, grab it and examined it by my eyes and hands. By the way, great video!

[@industrialize]

There are certain things I prefer to buy in store as well but I've found I can comfortably buy a lot of things online once I become more familiar with the product / brand. Shoes are a good example, I only buy one single brand and I know exactly how they fit without even having to try them on!

[@yasinnabi]

I order 50% of total groceries online. Amazon doesn't really work in Korea.

[@industrialize]

I'm with you, I'm buying more and more things online these days.

[@brad265]

I prefer buying online now. Last thing I bought was a cheese grater 😁

[@industrialize]

Cheese grater is a perfect example of how you can buy virtually anything online now...I only go to a store if I can't find what I'm looking for online!

[@vishnuvardhan7541]

Which is low investment & stable income business in rural area?

[@boyoungbonniekim4931]

The best video ever!

[@industrialize]

🙏 🙏

[@Eviee..]

great informations

[@industrialize]

🙏🙏

[@shanep.9442]

If you were going to buy a warehouse to lease out, do you think it's worth the extra effort of investing in the USA market, or would achieve similar results in Canada?

[@industrialize]

That's a very timely question as I've been re-evaluating my investment thesis over the past 6 months or so. My previous strategy was only to invest in my market (main reasons being that I know the market extensively and I can visit them in a very short drive). The more I've studied the US market though the more I see opportunities not currently present in any of the Canadian (at least that I'm aware of). I just passed on investing in another property in Canada last week actually as I'm leaning more and more towards believing it is worth the extra effort to consider stateside.

[@shanep.9442]

@Chad Griffiths I'm thinking similarly, wondering where the next move should be. There's interesting markets all over the USA. If I were to invest there, I think I'd stick to the western half of the country, for time zone & travel considerations. The 1031 exchange option that's available in the USA is also compelling.

[@industrialize]

@@shanep.9442 the 1031 is huge and a major differentiator itself. My plan going forward is to focus on value add class B in the sunbelt (excluding blue states). That said I agree a lot of people have become very wealthy investing in the west coast!

[@deqasuleiman1290]

On average, In the west coast, How much can warehouse and cold warehouse be built /ft. Just ball bark

[@industrialize]

Costs can vary huge, I'd say ~ $150 for basic warehouse and +300 psf for cold storage.

[@deqasuleiman1290]

@@industrialize That's great info. Thanks you so much

[@darealiyu5712]

I prefer to buy things in store but yea the reality is a buy more things online

[@8skellerns]

All soulless places where mobile phones and music, anything to keep people's minds sane while working in a steel shed is banned.

[@derenhuang]

First

[@industrialize]

Man you're fast! Are you still at the same address I sent #creatingtrinity to? I'm going to send you a small industrial real estate merch package to thank you for the fast comment!

[@derenhuang]

@@industrialize Yes same address!

[@industrialize]

@@derenhuang I'll mail it this week!

[@shanep.9442]

Thanks Chad