Getting more sales is the goal of any Shopify store, but the customer's post-purchase experience ensures that sales keep happening. Shopify stores that provide a great product and a great customer experience are the ones that manage to stand out and grow their business.
For any Shopify store to succeed, its fulfillment processes must be streamlined and running smoothly. No Shopify store can grow if its customers are routinely getting their orders delivered late or with the wrong products.
Shopify stores can leverage a variety of fulfillment models including self-fulfillment, 3PLs, dropshipping, and more. Here’s what you need to know about fulfillment for Shopify stores so you can grow your business.
What's involved in fulfillment for Shopify stores?
Here’s how the fulfillment process works for Shopify stores.
Order management
Order management is the process of getting customer orders, keeping track of them, and sending them out. The order management process starts when a customer places an order and ends when the package is delivered to the customer.
Picking, sorting, tracking, and shipping are all parts of order management. Depending on the operation, order processing can be done by hand (written by hand on an order log sheet) or with a lot of technology and data (online orders and automated order processing software).
Inventory management
Inventory management helps Shopify stores figure out what and how much to order and when. It keeps track of goods from the time they are bought until they are sold. The practice looks for and reacts to trends to make sure there's always enough stock to fill customer orders and that there's plenty of notice if there's going to be a shortage.
Inventory turnover is one way to measure how well you manage your stock. A Shopify store doesn't want to have more inventory than they sell. If you don't sell enough of what you have, you may end up with deadstock.
Inventory management is important for the health of a business because it helps make sure there is never too much or too little stock on hand. This reduces the chance of stockouts and wrong records.
Shipping
Shipping orders to customers involves many moving parts. Having to factor in things like shipping costs, packaging, and delivery speeds gets complicated quickly.
Are you going to pass the full cost of shipping on to your customers or will you offer free or flat-rate shipping to absorb some or all of the cost? How will you get orders to your local customers? Addressing these questions is key to growing your Shopify store.
Warehousing
Warehousing is the process of storing items that will be sold or sent to different places. Warehouses are used by all kinds of businesses that need to store a lot of products for a short time before sending them to other places or sending them to customers one by one.
For Shopify stores, warehousing is often the most expensive part of running a store. Having a physical location that houses all your inventory is going to be cost-prohibitive, so more stores are turning towards working with 3PLs that store their products and fulfill orders on their behalf.
Returns management
Though undesirable, product returns are inevitable. Contrary to popular belief, returns don't mean a customer is lost forever. If managed effectively, product returns can become an opportunity to gain the trust and the satisfaction of the customer and to show them that you care.
Shopify fulfillment models
Being a Shopify store owner, there are a variety of fulfillment models that you can use. Here they are in detail.
Self-fulfillment
If you are a small business and have more time than money on your hands, it is a good idea to manage fulfillment on your own. Self-fulfillment provides you with the ease, control, and flexibility you need when your business is still in its infancy.
What is self-fulfillment?
Self-fulfillment is when you take care of your order fulfillment process yourself, either as an individual or with a team. Handling the processes yourself can help you save a lot of money if you are a small business and your sales volume is low.
Pros
Fewer operations costs if the business is small
Flexibility in order management
Ease in managing special business needs
Cons
Challenging to manage as the business scales
Hiring and training staff for handling different processes can be challenging
Less efficiency as compared to logistics companies
Third-party logistics (3PL)
If you're looking to scale your business or have run out of warehouse space, it's a good idea to use a 3PL to manage your storage and shipping needs. The services provided by different 3PL providers can vary; it is, therefore, essential to do a cost-benefit analysis while keeping in mind your business needs before choosing a 3PL provider.
What is a 3PL?
A 3PL or third-party logistics provider is a company that offers to take care of the fulfillment needs of your business. The services provided by 3PLs can range from inventory and order management to shipping and returns management.
Pros
Specialized logistics infrastructure to benefit from
Easy scalability
Efficient customer service
Cons
Less control over customer service
Less control over brand image
It can be challenging to find a 3PL that you can trust and that suits your needs
How to choose a 3PL for your Shopify store
Suppose you're a Shopify seller and are looking to hand over your business's fulfillment to a third-party logistics provider. In that case, there are a few essential things that you must keep in mind before making a decision.
Integrations with Shopify
The first and the most important thing to look for in a 3PL provider is whether it offers a Shopify integration. A Shopify integration with the 3PL provider is crucial because it helps automate the process of order pushing from your Shopify store to your fulfillment provider, thus keeping your processes in a flow and making your job easier.
2-day shipping capabilities
If you wish to offer shipping services like 2-day shipping, you must check whether your 3PL provides that. Once you have identified different 3PL providers that offer a 2-day shipping service, you must compare the shipping rates and the quality of service they offer and choose the provider you think will suit your business needs and customer preferences.
Fulfillment center locations
Choose a 3PL provider that has a vast network of fulfillment centers spread across the country. This will allow you to place your inventory in centers near your customers, reducing transit time and shipping costs.
SLAs for shipping & delivery
When choosing a 3PL provider for your business, make sure that the service level agreements are in line with what you are looking for. That way, the 3PL fulfillment service will be able to cater to your business needs now and in the future.
Lower shipping costs for your brand
Controlling shipping costs by making smart choices is a great way to cut down your expenses. While choosing a fulfillment service provider for your business, it is important to choose one that offers reduced shipping costs for your brand.
Dropshipping
When you are only interested in making sales and do not want to handle other business aspects like inventory management and order fulfillment, dropshipping is the option for you. Shopify has integrations with trusted supplier platforms like Amazon that allow Shopify sellers to make sales without hassle.
What is dropshipping?
Dropshipping is when your supplier holds the inventory and takes care of the shipping process for you. You pay the wholesale price to your supplier and manage your store's prices according to your preference.
Pros
Low startup cost
No inventory management required
No need to manage fulfillment
Cons
No control over the supply chain
Low profit margin
Highly competitive
What about fulfillment services from Shopify?
Shopify used to run the Shopify Fulfillment Network, but they have deprecated that service. Recently, Shopify acquired leading 3PL, Deliverr, so we expect them to begin offering fulfillment services again for their stores in the future.
Which fulfillment model is best for Shopify stores?
The best fulfillment model to choose depends on the type of business you're running and how mature your business is. While there is no "best" fulfillment model, here are our suggestions:
Your company is new or small: Self-fulfillment
Your company is rapidly growing: 3PL or Deliverr
Your company is enterprise-level: Self-fulfillment (because you have the resources to build out your own logistics network)
Your company doesn't want to manage inventory at all: Dropshipping
The best Shopify fulfillment services
Considering outsourcing fulfillment to a fulfillment provider? Here are some of the leading 3PLs for Shopify stores:
ShipBob
Acknowledged for its best fulfillment technology by Adweek's Retail Awards, ShipBob serves more than 4200 e-commerce businesses as a 3PL and provides an accuracy rate of 99.95% in fulfilling orders. Using ShipBob as a 3PL can help you improve your transit time and shipping costs as ShipBob allows you to strategically store your inventory in warehouses near your customers.
ShipHero
ShipHero offers easy integration with different sales channels like Shopify and Amazon. As a fulfillment service, it helps e-commerce brands by picking, packing, and shipping their orders. ShipHero charges on a pay-as-you-go basis and does not ask for any set-up fee. Its optimized shipping saves you from overpaying and thus also from overcharging your customers for shipping.
ShippingTree
ShippingTree has fulfillment centers strategically located all across the US and has partnered up with trusted shipping carriers like FedEx, UPS, and DHL. ShippingTree also provides fulfillment for orders from Shopify, Walmart, Amazon, and other sales channels.
Whiplash
Whiplash is a cloud-based order fulfillment service with a network of fulfillment centers across the United States. The company offers complete transparency in terms of processes and pricing. Whether you are looking for discounted shipping rates or wish to offer your customers a same-day delivery service, Whiplash fulfillment has got you covered.
Amazon Multi-Channel Fulfillment (MCF)
Amazon Multi-Channel Fulfillment offers one-day and two-day deliveries that you can use to your benefit and increase your customer base by making them wait for less time. What sets apart Amazon's Multi-Channel Fulfillment from its competitors is its simplified operations and easy management.
Shopify Fulfillment FAQs
Here are the answers to some commonly asked questions about fulfillment for Shopify stores.
Does Shopify offer fulfillment services?
Not anymore. Shopify used to offer fulfillment services for Shopify sellers and other ecommerce businesses that ship from the United States, Canada, or Australia through the Shopify Fulfillment Network.
Does Shopify own warehouses?
Yes, Shopify owns several warehouses as part of its former fulfillment network and suggests businesses to distribute inventory to achieve proximity to different customer bases at the same time.
Conclusion
When it comes to choosing a fulfillment service, there is no right or wrong option; it all depends on the size of your business, your resources, and the goals you have for your business. To choose the best fulfillment service for you, you must consider all of these factors together and then make a decision.
To learn how Malomo can grow your Shopify store, schedule a demo with our team or start your free trial today!
