How to Fulfil Shopify Orders: 4 Practical Methods

What is order fulfilment?

Order fulfilment is the process of getting orders to customers after they’ve made a purchase.

In ecommerce, the fulfilment process begins as soon as someone purchases an item from your online store and ends when the customer receives their order in full.

You should care about Shopify order fulfilment because:

• • • Improving your fulfilment efficiency leads to a better customer experience.

    • Reducing fulfilment costs makes your business more profitable.

Let’s look at a few fulfilment solutions for Shopify sellers looking to optimise the process.

4 types of fulfilment for Shopify merchants

There are four main types of Shopify fulfilment:

• • • Third-party logistics (3PL)

    • Shopify Fulfilment Network (SFN)

    • In-house fulfilment

    • Drop shipping

I’ll quickly break these down in detail so you can determine the best strategy for your business.

1. Third-party logistics (3PL)

Third-party logistics, or 3PL, is the outsourcing of fulfilment tasks from a vendor to another company.

The 3PL company handles the physical management of the business, while you focus on the business side of things such as growth, product development, and branding.

Hiring a 3PL means you don’t need your own warehouse, shipping supplies, or warehousing staff to maintain your business’s operations. However, you’ll have to give up a chunk of your margins to pay the provider’s costs.

This can be a good option for businesses selling a high volume of high-ticket items. But if your products are low-cost and/or expensive to ship, a third-party provider could be too expensive.

2. Shopify Fulfilment Network (SFN)

The Shopify Fulfilment Network (SFN) is a type of 3PL service run entirely by Shopify.

Shopify-owned warehouses and logistics teams take care of all your physical stock, making sure orders are packed and shipped correctly and on time. All you have to do is make sure that your inventory is shipped to the SFN location where your orders will be fulfilled.

• • • Note: The SFN is only available for US-based sellers.

3. In-house fulfilment

In-house fulfilment means you receive, manage, pick, pack, and ship all your own inventory. It requires a storage facility, such as a warehouse or factory, and a team of employees to manage it.

Fulfilling orders in-house tends to be cheaper than hiring a 3PL, but the most labour-intensive to manage. You’ll save on the fees third-party providers charge for fulfilment but will need to go through the processes of finding a storage facility and fitting it out, hiring and training staff, and managing suppliers.

This is a good option for boot-strapped businesses or owners with existing inventory management and logistics experience.

4. Dropshipping

Dropshipping is where the physical management of your inventory and fulfilment is done by your supplier.

Customers order products through your website, you forward the address details to your dropshipping supplier, and they ship the goods directly to your customer’s house.

Dropshipping can be a great way to test products and learn the basics of ecommerce without a large investment. It is a low-risk, low-reward fulfilment strategy that works best if only used temporarily.

This fulfilment method is the cheapest as you don’t even need to hire staff or rent a warehouse.

However, it comes with three major risks:

• • • There’s no way to quality-check orders before they go out.

    • Managing returns can be a nightmare.

    • Shipping often takes up to a month as products are typically shipped internationally from China.

How to choose the best Shopify fulfilment method

The best Shopify fulfilment method for you can be determined by considering your business’s goals, needs, and challenges.

If you’re brand new to ecommerce, looking to test new products on a market cheaply, or are just looking for a short-term, minimal-effort side gig, then drop shipping might be right for you.

If you’re finding that you’re bogged down managing operations when you should be focusing on other areas of the business, such as growth, it could be a good idea to seek out a 3PL or work with the SFN.

And if your budget is tight but you still want to prioritise quality and customer experience, it could be a good idea to go in-house.

Ultimately, think about your short-term and long-term goals, get quotes from third-party suppliers, and research the costs of doing it on your own. If you’re still not sure what’s right for you, ask a business consultant or financial advisor for help.