A Guide to the Shopify Fulfillment Network:
With millions of businesses and billions in sales, it’s no secret that Shopify has changed the game forever for global e-commerce. In fact, in 2020 Shopify merchants contributed nearly $120B in gross merchandise volume to the global economy, doubling that figure from the year before.
Amidst all that growth, Shopify fulfillment is more competitive and important than ever, leading many Shopify merchants to outsource it to a third-party logistics (3PL) partner. If choosing the latter, merchants have plenty of choices, with each 3PL partner offering its own set of potential risks and rewards.
Among those choices is the Shopify Fulfillment Network, recently started by Shopify in a bid to compete with Amazon’s Prime service. And with consumers’ expectations for fulfillment at an all-time high, this new addition to the fulfillment services field could be a game-changer for Shopify merchants everywhere.
Read on to learn the following:
- The importance of Shopify fulfillment
- Your options for Shopify order fulfillment
- What is the Shopify Fulfillment Network (SFN)?
- What are the Pros & Cons of the SFN?
- What’s the WSI difference?
Why Fulfillment Matters
No matter how exceptional your product and marketing are, if you can’t fulfill your orders reliably, your business won’t survive. Consumers expect their orders to be processed and delivered quickly and reliably, with minimal effort and low to no cost. This is where understanding the nuances of EDI vs API can be crucial for efficient operations.
For retailers like Amazon, this is possible via their massive infrastructure. But for smaller or mid-size sellers (like the majority of Shopify merchants), ensuring a seamless, efficient, and reliable fulfillment operation is much more difficult.
What Are My Options for Shopify Order Fulfillment?<
If you’re a Shopify merchant, your options are:
- Do it in-house. With a small enough store or inventory, it’s possible to keep your order fulfillment in-house. This is especially applicable for local or in-person sales that don’t require a significant shipping operation. Of course, this option requires significantly more work as your business scales. Managing inventory and storage, and then picking, packing, and shipping each order can cost huge amounts of time and money for a growing business.
- Drop-shipping. Drop-shipping allows you the benefits of selling through Shopify, while outsourcing the fulfillment process entirely to the manufacturer. While this does ease the burden of fulfillment, drop-shipping also allows for very little quality control over the product or the supply chain, and shipping times can be difficult to manage.
- Third-Party Logistics (3PL) Partner. For most fast-growing Shopify merchants, this option makes the most sense. Outsourcing fulfillment and distribution to a company like WSI that has the existing infrastructure, network, and software to handle significant increases in shipping, logistics, supply chain, and storage can save immense amounts of time and money as a merchant’s business grows.
What is the Shopify Fulfillment Network (SFN)?
The Shopify Fulfillment Network is Shopify’s answer to Amazon Prime, promising 2-day shipping through a partner who streamlines inventory management, order fulfillment, product storage, and returns for any Shopify merchant whose application is approved. The SFN partners with existing 3PL businesses, utilizing their existing warehouses and distribution centers to service its merchants’ fulfillment in-house.
How Does the SFN Work?
A merchant must submit an application, whose approval is subject to SFN’s terms (for example, SFN only works with vendors with under 200 SKUs). If a merchant’s application is approved, the merchant chooses which products fit SFN’s terms to fulfill (again, these are limited — SFN can’t sell regulated or perishable items, etc.). When that list of products is approved, they are then delivered to the appropriate partner locations for storage and shipping. When a customer makes a purchase, the order is picked, packed and shipped from the nearest SFN location.
What are the Pros & Cons of the SFN?
- Simplicity. After approval, onboarding and stocking inventory, SFN handles the rest. Fulfillment runs through the Shopify admin panel, where inventory levels and resupply timelines are easily monitored.
- Flexibility. SFN doesn’t use long-term contracts, requiring only 45 days’ notice to terminate the service. This allows users to test it out or change partners easily.
- Guaranteed, Timely Delivery. SFN fulfillment centers are located across the US and Canada, making it easy for them to deliver on their “2-day guaranteed” shipping promise. Additionally, they offer discounted rates on shipping via UPS and USPS.
- Handles Returns & Exchanges. For a flat rate, SFN handles returns and exchanges, including inspection, repackaging, and inventory monitoring.
- Lack of Experience. Announced in 2019, SFN has only operated as a 3PL for a few years. While they do partner with pre-existing 3PL companies, the Network itself is still finding its feet.
- Not a One-Size-Fits-All Solution. There are specific limits to the vendors SFN approves and will work with. For example, they’ll only work with merchants who offer less than 2,000 SKUs, and only ship between 10-10,000 orders per day, etc. Some businesses may not fit these specifications.
- Restrictions. SFN will not do business with merchants who offer highly regulated or perishable items (including hand sanitizer, CBD products, firearms, or pharmaceutical products). This eliminates a significant number of merchants from doing business with them.
- No Custom Packaging Capabilities. Unlike 3PL’s like WSI, Shopify’s Fulfillment Network will not execute custom packaging in-house, meaning merchants must provide any custom packaging materials directly to SFN. For certain merchants who desire to deliver unique or special packaging with their product, this can be a deal-breaker.
- Lack of Consistency. SFN uses a wide variety of different 3PL partners. This means a merchant’s products will be shipped, stored, and delivered from multiple warehouses and companies, none of whom have worked together for more than a few years. The risk of inconsistency increases accordingly.
What’s the WSI difference?
For over 50 years, WSI has dedicated itself to serving the complete logistics needs of our clients. Through our large family of companies, we represent a nationwide distribution network with global logistics reach, maximizing decades of experience at every step of the logistics and fulfillment life cycle to deliver 100% reliable results. Our locations span across the US, from the Midwest-East region to the Western region, ensuring we’re always close to your business needs.
Thanks to our significant capacity and expert workforce, most orders we receive are able to be picked, packed and shipped same-day. And unlike SFN, WSI is proud to offer a broad range of capabilities that make custom fulfillment solutions possible for an unlimited variety of B2C and B2B vendors. We also offer significant custom packaging capabilities, and inventory management solutions that are second-to-none.
If you’re in the process of choosing a 3PL partner for your Shopify fulfillment needs, don’t hesitate to reach out to WSI to learn what we can do for you.
Frequently Asked Questions
Is WSI a Shopify Fulfillment Network partner?
No, WSI is not an SFN partner. However, we offer e-commerce fulfillment that has significant advantages over SFN.
Why is ecommerce fulfillment important?
As the global economy has expanded, shipping speeds and fulfillment quality have risen. Consumers’ standards have risen accordingly, making your choice for a 3PL partner more important than ever. Quality fulfillment can make the difference between a one-off customer, and a customer for life.
How does ecommerce fulfillment work with WSI?
At WSI, we offer a complete range of services and expertise at every step of the fulfillment process. Click here to learn more.