Key Points:
- 54% of shoppers refrain from an online purchase because of costly shipping, while 83% considered free delivery the most crucial factor in online shopping
- Merchants have to ship between 10 and 10,000 each day to qualify for the Shopify order fulfillment
- The Shopify fulfillment network will pick, pack, and ship your products to your customers, as well as give them peace of mind with tracking information that's sent automatically after fulfillment
During the 2019 Shopify Unite, Shopify’s Chief Product Officer, Craig Miller, announced that the platform would move into the order fulfillment space. According to Miller, fulfillment by Shopify aimed to address specific pain points that merchants experience when using large marketplaces such as missed branding opportunities. This move by Shopify underscores the need for a streamlined order fulfillment process for a business to remain afloat in the eCommerce retail space.
According to Avarto, 53% of shoppers value the speed of delivery when shopping online, while 25% had canceled their orders due to delivery speeds that were too slow to match their needs. Further, 54% of shoppers refrain from an online purchase because of costly shipping, while 83% considered free delivery the most crucial factor in online shopping. Because of this, fulfillment by Shopify may seem like a good choice for the platform’s merchants. But it won’t work for everyone.
That’s why Easyship, a key player in eCommerce logistics, can help you streamline your order fulfillment process. We can connect you to over 250 cost-effective courier services, many of which offer reasonably quick delivery times so that you can keep your customers satisfied. We also integrate with Shopify so that you can use our platform directly with your store to easily sync products and orders.
However, if you prefer to manage your business entirely with Shopify, this guide will explain what the Shopify Fulfillment Network is, its pros & cons, how it compares with Amazon FBA and other fulfillment services you can use if fulfillment by Shopify doesn't work for you.
Table of Contents
What is the Shopify Fulfillment Network?
Fulfillment by Shopify is a network of fulfillment centers in different geographical locations supported by powerful machine learning technology to enable intelligent demand forecasting, inventory allocation, and order routing, all of which can ensure faster order delivery. The Shopify fulfillment service aims to achieve that through the following provisions:
- Packaging products: With the Shopify fulfillment service, you get free custom packaging using your own branded material so that you can further enhance your brand identity.
- Shipping and tracking orders: The Shopify fulfillment network will pick, pack, and ship your products to your customers, as well as give them peace of mind with tracking information that's sent automatically after fulfillment.
- Inventory management: Fulfillment by Shopify helps you maintain full visibility of your inventory level with real-time updates across all Shopify channels, as well as receive inventory notifications so that you never run out of stock.
- Inventory distribution: Through machine learning, Shopify will give you recommendations of where to keep your inventory to save time and shipping costs.
- Returns and reorder processing: Fulfillment by Shopify will handle returns and exchanges on your behalf. All returned, saleable items will be repackaged and added back to your active inventory.
How does it work?
If you’re trying to work out how to fulfill orders on Shopify, you’ll be pleased to know that the Shopify Fulfillment Network is pretty easy to use and doesn't require you to be tech-savvy. You can hit the ground running with Shopify order fulfillment by following these four basic steps.
1. Install the Shopify Fulfillment Network app
2. Select the products you want to be fulfilled via the Shopify Fulfillment service
3. Review a custom quote that’s easy to read with a cost per shipment and monthly storage cost
4. Send the products; the Shopify fulfillment network will step in here to fulfill your customer orders
However, it’s important to note that at this stage, fulfillment by Shopify is only available to merchants based in the US. If you’re in another country, you won’t have access to the service, in which case, Easyship may be better able to manage your order fulfillment.
How much does Shopify Fulfillment cost?
Pricing for the Shopify Fulfillment Network is completely customized to each business. Interested merchants will need to apply for the network through the website; Shopify will then come back with a custom quote. However, the costs for fulfillment by Shopify take several things into account, including:
- Storage
- Picking and packing
- Packaging
- Transportation (the cost of shipping orders to customers)
- Special projects (including bundling, receiving, and validating inventory)
Your plan will then be added to your existing Shopify subscription, so you’ll get one simple bill each month without any hidden extra costs.
Pros & Cons of Using the Shopify Fulfillment Network
The decision to offer fulfillment by Shopify was a power move by the platform to get in on the eCommerce fulfillment market. While it seems like a great service, there is, of course, a list of pros and cons that come with it. Here’s what you should know
Pros
- Sync inventory information: You can keep track of your stock in real-time across multiple selling platforms through integrated third-party accounts
- Manage all information on the same platform: Orders placed on other platforms like eBay and Amazon are automatically forward to your Shopify account. You will be able to process orders for dispatch, receive messages, and collect payment without having to monitor other accounts
- Lower operation costs: You don't have to build your fulfillment center or develop a packaging system from scratch.
Cons
- Costs: Shopify is known for being reasonably expensive, charging $299 for a premium shop plan; its fulfillment by Shopify service will undoubtedly be similarly priced
- Less control over third-party providers: Shopify integrates with many third-party fulfillment providers of which it has less control over
Shopify Fulfillment Network vs Amazon FBA
Fulfillment by Amazon (FBA) is a popular online order fulfillment service offered by Amazon to its sellers. Since Shopify is now competing directly with Amazon in the third-party fulfillment space through its Shopify Fulfillment Network, it’s worth comparing the two services.
Similarities
- Both offer delivery within two days
- Both will likely use a similar pricing model and order fulfillment methods
Differences
- With Amazon FBA you surrender your brand identity; with fulfillment by Shopify, you can retain your brand identity with customizations
- Amazon FBA has a clear pricing model; since the Shopify Fulfillment Network offers custom pricing, it’s hard to estimate how much you’ll pay
- Amazon has an extensive fulfillment network of 175 fulfillment centers worldwide compared to Shopify which is still building its infrastructure.
- Amazon's expert shipping management practices are already advanced, but fulfillment by Shopify is still being tested.
What About Other Fulfillment Services?
One challenge with Shopify order fulfillment is still a work in progress. Plus, merchants have to ship between 10 and 10,000 each day to qualify for the Shopify order fulfillment. As such, many smaller merchants won’t be able to use the service. In addition, the opaque pricing policy can be of concern for smaller merchants who need to have serious estimates to make good business decisions.
If fulfillment by Shopify doesn't work for you, consider using Easyship. We integrate with Shopify, and you’ll always get clear pricing estimates for each shipment with our rates calculator. Our platform is also free to use up to 500 shipments per month, and if you sign up for an account before June 30, 2020, you’ll get a free 90-day trial of our premium plans.
Decide Whether the Shopify Fulfillment Network Will Work for You
The Shopify Fulfillment Network was designed to offer the platform’s merchants a full-service Shopify order fulfillment process. However, its fulfillment by Shopify won’t work for all merchants. That’s because the custom pricing plans are a little unclear, and the service is currently only offered to US-based merchants.
If you’re a Shopify merchant whose service won’t work, you can try Easyship with your Shopify store to easily manage your customers’ orders.
