Shopify Order Fulfillment | A Guide for eCommerce Shop Owners

If you're looking to take your eCommerce business up a notch and bring in more sales, then look no further than this Shopify order fulfillment guide from Rakuten Super Logistics!

By:
Rakuten Super Logistics
eCommerce Fulfillment
eCommerce Strategy
Customer Satisfaction
Outsourcing
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Your Shopify store is something you built from scratch. You have worked hard to build your eCommerce business, and now that you have a string of loyal, regular customers and are attracting new ones each week, it can be hard to keep up with all of the orders coming in.

When you set up your Shopify account for the first time, you selected an order fulfillment strategy. At the time, you may not have known all of your options or needed to learn more about the others. Manual fulfillment was enough at first. But as you grow, manual fulfillment can be hard to keep up with.

Learn about additional Shopify order fulfillment strategies and what might work for your growing business in this article.

What Are Order Fulfillment Services in Shopify? 

When someone buys something from your Shopify store, that triggers the order fulfillment process. There are a few different fulfillment strategies for Shopify owners: the do-it-yourself approach, outsourcing your fulfillment, and dropshipping.

Do It Yourself

When you visit the orders page on your Shopify admin, then the do-it-yourself approach would begin by reviewing the orders so you can package the items and ship them. You would then gather and package all the items, print the shipping labels yourself, and get them ready for the carrier. You can either take them to a post office or schedule a pickup from the carrier you are using.

Outsourced Fulfillment

When you outsource fulfillment, you work with a third-party logistics provider (3PL) to warehouse, pack, and track your orders. There should be a connection between your Shopify storefront and the warehouse, so they get a notice and can begin working on the packing slip when an order is placed. They handle everything in the fulfillment process for you.

Dropship

With dropshipping, your supplier or dropship partner sends items directly to the customer when an order is placed. This process removes the responsibility of inventory from you altogether so that your dropship partner handles everything from inventory through fulfillment. 

The first strategy (DIY) means that all the responsibilities are on you, and you will have to have somewhere to store your inventory and take the time to individually package and ship each order. However, the other two strategies allow you to share the responsibility with an outside party.

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That means that you will have time to focus on other aspects of your business, to continue creating more products to serve your current customers and attract new ones.

The Importance of Choosing the Right Shopify Fulfillment Service

You have put in a lot of work to make your Shopify store work for you. The design, the products, the marketing. It’s all-important. But fulfillment is equally important to your customers. You need to fulfill multiple orders accurately and quickly, so you can keep your customers happy. 

Choosing the right Shopify fulfillment strategy will help you manage orders and get the right products to the right customers promptly. Without doing this right, you risk losing your customers to someone else who can provide what they need, when they need (or want) it. As your Shopify store grows, you may need to adjust your strategy.

With more orders coming in, it may be hard to keep up with a DIY approach to fulfillment, so you might need to bring in an outside party to help you keep up with fulfillment. 

Does Shopify Support Order Fulfillment?

When you create a Shopify account to run your eCommerce store, you may be wondering about how it works. Does Shopify support fulfillment? Do they offer order fulfillment services? What exactly do you as the business owner need to do to fill all your Shopify orders?

In short, Shopify has begun to offer its fulfillment services known as the Shopify Fulfillment Network. However, it is new, has some limitations, and might not work for every business owner. There are other ways you can do order fulfillment on Shopify, in a way that will work for your company.

Automatic order fulfillment is one way Shopify can support order fulfillment for certain types of orders. With automatic fulfillment, you don’t have to sit down at your computer each day to process orders. It can give you more time to focus on other parts of your business.

However, automatic order fulfillment will only work if you sell something that does not need packaging and shipping. If you sell something digital – like digital artwork or knitting patterns – you can set up automatic order fulfillment from the checkout page. 

Another order fulfillment method through Shopify is manual order fulfillment. This is the most common strategy for Shopify businesses. This is the best method for businesses who make products to order, sometimes run out of stock, or have pre-orders available. When you manually fulfill orders in Shopify, you will have an option to alert your customer when the order has been filled and shipped. 

The other common way Shopify stores can fulfill orders is by partnering with a third party. By outsourcing order fulfillment or dropshipping, you can leverage the experts and fulfillment infrastructure that is already designed to be quick and efficient. Using another logistics company, instead of doing it all in-house, you can use warehousing, labor, technology, and equipment for when it wouldn’t make sense to have it on your own.

This is a great option for Shopify businesses that want to scale and grow to serve more customers. 

How Do I Set Up Fulfillment on Shopify? 

When you go to set up order fulfillment on Shopify, it is a pretty intuitive process. You will first select the fulfillment method you plan to use. This would involve selecting in-house fulfillment (then going to select manual or automatic), dropshipping, or a 3PL. If you are using a 3PL for order fulfillment, you will then connect your Shopify account to the 3PL technology. This will ensure that orders can be accessed and filled by your logistics provider.

How 3PLs Handle Shopify Fulfillment

When you partner with a 3PL for Shopify fulfillment, there are a few key steps that happen to ensure that your inventory is taken care of and orders are filled for your customers quickly and efficiently.

Here are the main steps involved in the Shopify fulfillment process:

1. Receiving

  • Once the items have arrived at the warehouse, they will input them into their warehouse management system and place them in your designated space of the warehouse. 

2. Warehousing

  • As items are placed on the shelves and stored, they are organized on shelves, bins, or pallets so that warehouse workers can easily find them to fill orders. 

3. Picking

  • Once an order has been placed, it is time for the warehouse staff to pick the order. When your Shopify store is set up correctly, the 3PL will automatically be notified of a new order to your store.
  • Warehouse workers will often go through the warehouse with the packing slip, gathering items for each order. Technology used in fulfillment warehouses makes it easy for workers to accurately pick each order.

4. Packing

  • Orders are packed in the right shape or size envelope or box, making sure items will be safe and secure throughout transportation. You may even be able to create custom fulfillment service options like using customized boxes, envelopes, or tapes with your logo or brand elements.

5. Shipping

  • After boxes are packed, they will go to the shipping area of the warehouse, so that the correct carrier can pick them up. A 3PL often has multiple relationships with carriers so that you can get the best possible rates.

6. Returns

  • Order fulfillment does not always end when an order is shopped. When a customer needs to return part or all of their order, they can send it to your 3PL. There are a few options for dealing with a return: restock, quarantine, or disposal. The right choice depends on your products and what you want to be done with them.

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Benefits of Using 3PL for Shopify Fulfillment

When your business grows to the point that it is too challenging or too time-consuming to keep up with order fulfillment yourself, partnering with a 3PL makes the most sense. When more and more orders are coming in each day, you may be excited at first, because your business is growing.

However, when it comes down to the logistics of it, it can be very hard to keep up with that kind of growth.

Here are the benefits you can find when you decide it’s time to outsource your Shopify fulfillment to a third-party fulfillment center:

Save Time

Inventory Management: A 3PL’s facility has the technology and processes in place to accurately monitor inventory levels and allow you to replace inventory before items go out of stock. Many technologies used in 3PLs can forecast inventory needs so that you can get ahead of restocking before it’s urgent.

With a 3PL, your Shopify store will be able to accurately reflect current stock levels, so that you and your customers know what’s in stock at any given time. This inventory management software can also give you data on returns and stocking levels, so you can identify issues with products or see what is not selling as well as you had hoped. This is so you can make decisions on how to move forward with your inventory in the future.

Picking and Packing: You will no longer have to spend hours processing and filling orders. The fulfillment center you partner with will handle this step, and with the experience and tools at their hands, it is a seamless process.

Order accuracy is often much higher when using a fulfillment center, because the technology, physical setup, and processes they follow have been fine-tuned over years to keep companies and their customers happy.

Save Space 

Warehousing: When you partner with a third party, you no longer have to have the space to store all of your inventory. You send your products to a warehouse managed by a third party. They input the shipment into their system and organize your goods in your assigned part of the warehouse.

In addition to the physical storage of items, warehouses often have specific technology to manage your inventory and warehouse space effectively. This helps to ensure accurate inventory counts and order fulfillment status

Packaging: With your inventory being stored in a warehouse, there is no need to have boxes, envelopes, and other types of packaging sitting around. Your warehouse will hold all the correct packaging so they can safely and securely ship items to your customers.

Many warehouses even offer custom packaging, so you can have branded boxes or packing tape for your area. 

Save Money

Rate Negotiation and Discounts: 3PLs have negotiated rates and discounts with a variety of carriers. Some of the most common – UPS, FedEx, USPS, and DHL – have worked with 3PLs to provide bulk rates on domestic and international shipping. This means that you can save money, and offer your customers discounted shipping rates.

You are also able to offer more shipping options, faster shipping options, or even free shipping to your customers. 

3 Reasons to Outsource Shopify Fulfillment

When you have decided to outsource your Shopify fulfillment, giving yourself more time, money, and space is great. These and many other reasons can benefit your business’s bottom line and increase your customer satisfaction.

3PLs bring additional value-added services that can help with your company’s speed and accuracy, regulatory support, and logistics expertise:

  1. Speed and Accuracy: Today’s world consists of free two-day shipping from many eCommerce platforms. However, this can be hard for small to midsize businesses to keep up with. A 3PL specializes in processes to ensure quickly packed and accurate orders. This also includes negotiated rates for cheaper shipping methods
  2. Regulatory Support: If you deal with certain types of products or international shipping, certain rules and regulations must be followed. A logistics provider can help you manage things like cold storage, hazmat, customs documentation, and more.
  3. Logistics Expertise: You know your business, and a 3PL knows theirs. They can help to streamline logistics services for your business, incorporating the latest best practices and technologies that may improve your business and bring additional benefits.

Understanding Costs Associated With 3PLs for Shopify Fulfillment

The cost of 3PL services depends on the services you outsource and the payment model of the 3PL you use. Common payment models include total fulfillment cost, pick and pack strategy, or on a per-service basis. Let’s take a look at what goes into each of these pricing models.

Total Fulfillment Cost: This model reflects the total fulfillment service cost for Shopify orders. A 3PL might charge only for receiving, storing, and shipping inventory, rather than for each service (some of these services are listed below in the per-service pricing model). 

Pick and Pack Pricing: With pick and pack, you pay for each item packed. The range varies but most 3PLs charge between $0.15 and $5. For some businesses, this model adds up quickly.

Per Service Pricing Model: Some of the costs you may see in a per-service pricing model include the following:

  • Onboarding Costs: This gets all of your services up and running, and is usually a one-time cost.
  • Inventory Receiving Costs: This covers inventory acceptance at the warehouse. It is often charged per unit, per pallet, per hour, or at a flat rate.
  • Inventory Storage Costs: This will include the space for your inventory. It is often charged per SKU or unit or bin, shelf, or pallet in the warehouse.
  • Pick and Pack Costs: This cost covers the fulfillment staff who will be picking and packing orders for your company. It can be charged per item or order.
  • Kitting Costs: When you offer kits, sets, or subscriptions, this fee varies based on what specifically goes into your company’s kitting. 
  • Packaging Costs: Sometimes this fee is separate from picking and packing or kitting, and can include the boxes or filler material for the packages.
  • Shipping Costs: While there is often a negotiated rate with carriers, different shipping speeds, zones, or weights can cost different amounts.

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The Right Partner for Shopify Order Fulfillment

The right Shopify order fulfillment partner can make your life easier. They can help store and manage inventory and ship orders to your customers in a quick, efficient way. This gives you time to grow your business in other ways.

With Rakuten Super Logistics, you can get more than simply fulfilling orders. Our fulfillment service options include kitting and customization, a network of strategically placed warehouses, and a list of shipping partners that get you the best deals on fulfillment for your customers.

Request a quote today to learn how we can help you with the Shopify fulfillment process.

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Rakuten Super Logistics is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand.

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