Your Definitive Guide To Shopify Fulfillment Network - 2020 Updated
Fulfilling orders is not the most glamorous aspect of running an e-commerce business.
But as mundane as it is, the estimated global parcel volume is estimated to hit the 100 billion mark this 2020.
The stakes are high, and businesses who do not know how to streamline their order fulfillment process run the risk of closure.
In Shopify specifically, their order fulfillment process is made up of vital pieces. These components work hand-in-hand to implement an effective e-commerce fulfillment service.
In this post, we will be breaking these processes down. We will highlight the most important aspects of Shopify Fulfillment to take your business to the next level.
- What is Shopify Fulfillment Network?
- The Pros and Cons of Using Shopify Fulfillment Network
- Why Shopify Fulfillment Network is for Everyone
- Can Amazon Fulfill Shopify Orders?
- The Steps Needed to Activate Fulfillment by Amazon on Shopify
- How Can You Add Fulfillment to Shopify?
- How Much Does Shopify Fulfillment Cost?
- How About Returns Policy
- Choosing the Right International Fulfillment Partner
- Optimized International Shipping
I. What is Shopify Fulfillment Network?
Shopify Fulfillment Network is a network of fulfillment centers from various geographical locations. It uses a powerful machine learning technology that allows the following:
- Inventory allocation
- Order rerouting
- Demand forecasting
These components ensure faster delivery of orders to your customers.
It also aims to help with the following:
- Product packaging: Using the Shopify Fulfillment service, you can customize your packaging using your own branded material, to improve your reach, and brand identity.
- Shipping/tracking orders: The SFN will usually be the one to pick, pack, and then ship your items to your customers. It will also give keep them on the loop by providing them with tracking information that's sent automatically after the fulfillment.
- Managing your inventory: With the help of machine learning, the platform will provide recommendations on where to keep your inventory to help save time and shipping costs.
- Reorder processing/returns: It will usually handle any returns or exchanges on your behalf. All of the returns will be eventually repacked, and then placed again to your existing inventory.
II. The Pros and Cons of Using Shopify Fulfillment Network
When you use Shopify Fulfillment Network, you do not have to worry about packing, picking, or shipping your orders.
Moreover, cross-border selling will also become the future of e-commerce. It will open up your business to more international customers, allowing you to reach customers from all around the world.
Shopify Fulfillment can help you sell in a number of markets, increasing your revenues, and driving brand awareness to your business on an international scale.
You will receive regular notifications in case you need to replenish your stock. Doing so helps the platform meet your customers' demands on time.
It is also easy to track your stocks in real-time, even across different platforms via integrated third-party accounts. Not to mention that you get to enjoy lower operational costs.
That's because you do not have to build a fulfillment center on your own or create a packing system from scratch.
The Shopify Fulfillment Network also hosts several features:
- Multiple channels
- Customized branding and packaging
- Exchanges and returns handling
- Two-day delivery
But apart from these advantages, SFN has its own drawbacks.
For one, Shopify can be quite expensive, charging as high as $299 for a premium plan. The Fulfillment by Shopify service may also be priced similarly.
This might also hurt your branding experience. Let’s say, your packing presentation is the most important aspect of your branding experience, you’d have a hard time looking for an order fulfillment provider that provides you with the right amount of dedication, and customization for your brand and products.
You will also have less control over third party providers. That's because the platform itself will handle third-party integration.
III. Why Shopify Fulfillment Network is for Everyone
A great thing about Shopify Fulfillment Network is that its technology and fulfillment systems are highly accessible to everyone. It is also extremely cost-efficient, no matter the nature of your business.
It caters to retailers of all sizes, whether you are selling ten or ten thousand packages daily.
Thus, it is an excellent platform for those who want to start an online business with Shopify.
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IV. Can Amazon Fulfill Shopify Orders?
Yes, you can utilize the Fulfillment by Amazon feature to fulfill Shopify orders.
You can use a system where Shopify Integration and Amazon FBA can merge the acquired orders. From there, the system will synchronize your stocks.
You can either fulfill the orders on your own or utilize your FBA stock.
Let’s say, a customer purchases a product on Amazon. You’ll be notified via Amazon Seller Central and on the Amazon Sales Channel overview page.
Then, you can log in to your account to review the details of the order, as well as manage the billing and fulfillment.
V. The Steps Needed to Activate Fulfillment by Amazon on Shopify
Step 01: After setting up your Amazon Centra Account, you need to go to this link: https://www.shopify.com/admin/fulfillment_services/signup_for_mws.
Step 02: Now, on the (Amazon MWS) or on the Amazon Marketplace Webservice page, you need to follow the instructions that will link your stone on Shopify to your account on Fulfillment by Amazon.
Step 03: Complete the entire process and go back to your Shopify Store.
After you’re done activating Fulfillment by Amazon, on your shipping settings, add the shipping rates of Amazon.
How Do You Set Shipping Rates?
Once you’re done activating Fulfillment by Amazon, you need to create Amazon shipping rates that will display to your customers upon check-out.
Note that Amazon offers the following shipping rates:
- Standard Shipping
- One-day Shipping
- Two-day Shipping
For different shipping zones, you might need to put seperate shipping rates that will match the shipping rates of Amazon. See Amazon's fulfillment rates to know how much you need to charge.
Also, make sure that you complete the following:
- Come up with a separate rate for every Amazon shipping option
- Place the name on the Amazon shipping rates (standard, one-day, two-day shipping) on the Shipping rate name field.
- The criteria should be based on order weight, and not the price.
If your shipping rates are improperly set-up, you might receive an error in the process of fulfilling your order on Amazon. Once you encounter this error you might have to go back to your shipping rates, ensuring that it fulfills the criteria.
VI. How Do I Add Fulfillment to Shopify?
Now that you know what Shopify Fulfillment is, as well as its benefits and important components, it is time to learn how you can implement it.
We will break down the steps on how you can add fulfillment to Shopify:
Step 1. Set Up Your Fulfillment Methods
You have the option of fulfilling your own orders, utilize third-party fulfillment services or a combination of these methods.
Once you place a product in your online store, you can choose a fulfillment method. Meaning, you could be using various fulfillment methods for products items on the same order.
Step 2. Identify Your Fulfillment Methods
After setting up your order fulfillment methods, the next step is to identify how you will fulfill your orders. You can choose whether to do it manually or automatically.
The setting that you choose will apply to all fulfillment methods. By default, though, your store will be utilizing manual order fulfillment.
To switch to automatic order fulfillment, you are free to configure your order processing settings.
Step 3. Assign Fulfillment Methods to Your Products
When you edit or add a product to your online store, you can choose a fulfillment method after completing the "inventory managed by" field. You can see this within the product detail section.
You can also change fulfillment service for multiple products when you use bulk editor.
VII. How Much Does Shopify Fulfillment Cost?
The price is customized, depending on your business. If you are interested, you can apply to the network via Shopify's website.
Shopify will usually provide you with a quote. But when it comes to cost, you need to consider the following things:
- Picking and packing
- Transport and shipping costs
There are also the "special projects," wherein Shopify will handle your inventory. This includes receiving, bundling, and validating your items.
For more details, check out: Shopify Fulfillment Network's Pricing
VIII. How About Returns?
Most logistics companies will help you solve order fulfillment problems on your behalf. This will include issues returned, and then processing refunds.
The customer will be sending the item back to the order fulfillment center. Then, the company will inspect the item for damages, validating the customers’ feedback. It will be the one replacing the item, or issuing a refund to the customer.
If the item is still in a good and sellable condition, it will be placed in the inventory, and shipped back for future orders.
IX. Choosing the Right International Fulfillment Partner
Because of the worldwide pandemic that we are experiencing, shipping internationally has become more challenging. The most difficult part in this kind of set-up is choosing the right partner, and selecting the right location.
That’s why, picking the right global fulfillment partner that’s specifically tailored to your needs, and will help fulfill your promise to your international customers is absolutely vital.
Most e-commerce businesses are already relying on international manufacturers. However, only a handful are taking advantage to source internationally when it comes to storage, sales, and shipping. So, don’t overlook these opportunities.
Countries like India, China, and South Korea are not only the most popular manufacturing locations in the world. Apart from that, they’re also the countries that have the quickest growing markets in e-commerce.
Ideally, you should be able to maintain regular and transparent communications with them. Similarly, they should also provide you with insight on whether or not you should adjust your shipping options, and how to properly set customer expectations.
Apart from that, you also need to consider the impact an international fulfillment operation has on the cost structure of your company, in good times and bad, and weight against the risk.
X. Optimized International Shipping
Chances are, most of your products are produced in Asia. But let’s say, you’re catering to European customers. You need to import these products from Asia, ship it to America, then import it to Europe. You’ll be losing out a lot for every transaction.
The proper way to do this is to ship from the manufacturer in Asia, to a fulfillment partner based in Europe who will be the one responsible for the shipment to your respective European customers.
Despite being launched recently, the Shopify Fulfillment Network is already showing promising results.
It can significantly reduce the processing and delivery time, decrease the distance between the merchants and their customers, and boost shipping accuracy. As a result, you get to run your business efficiently and effectively.
It also allows you to focus on what matters - and that is making your e-commerce business grow.
Keep in mind that taking your online business to the next level requires ensuring customer satisfaction. And you can achieve this by providing fast and inexpensive shipping to your customers.
This is where Shopify Fulfillment Network could come in handy.
Do you know other ways how SFN can boost your e-commerce business? Let us know in the comments.