Many brands might be familiar with Amazon’s in-house fulfillment program, Fulfillment by Amazon (FBA), but you don’t have to be on Amazon in order to use a custom fulfillment service.
Walmart and Amazon both have in-house fulfillment programs for their third-party sellers—but increasingly, so does Shopify. In 2019, Shopify introduced its fulfillment program, Shopify Fulfillment Network (SFN).
Merchants on the ecommerce platform who are accepted into the program can access a network of fulfillment centers across the United States and Canada. These fulfillment locations are composed of various Shopify-owned or third-party-owned warehouses.
There, Shopify will hold their products and then ship orders to their merchants' customers. The company will also take care of other supply chain activities such as inventory management, packing, and bundling.
It’s meant to be a hands-off fulfillment solution for ecommerce businesses. If you don’t have the order volume to justify your own warehouse, you can outsource your fulfillment operations to Shopify.
All you have to do is designate which of your products or SKUs you want to put in the Shopify Fulfillment Network, then ship them directly to one of Shopify’s participating warehouses. The fulfillment process is out of your hands afterwards.
The Shopify Fulfillment Network has been top of mind for many brands given recent news about the program. In January 2022, Shopify cut contracts with a number of its fulfillment partners involved with the Shopify Fulfillment Network.
However, the company quickly clarified that this wouldn’t lead to a reduction of capacity. Instead, these reduced partnerships are part of Shopify's effort to winnow down the number of third-party fulfillment contractors it uses.
In an earnings call in February 2022, Shopify said that it was designing its fulfillment network to be able to deliver packages to 90% of the U.S. population in under two days. It also said it was investing $1 billion in ramping up its fulfillment infrastructure.
So far, a not-insignificant number of people have opted to try it. Shopify hasn’t been specific about how many people use the Shopify Fulfillment Network, but it did say that it has “shipped millions of orders” through the order fulfillment service.
Right now, Shopify Fulfillment Network is only open to brands and online stores that sell products in the U.S., and it will also only fulfill non-perishable products.
Shopify said it is targeting small and mid-sized brands for its fulfillment program. It’s prioritizing brands that sell between 10 and 10k units a day—meaning you don’t necessarily have to have a huge footprint in order to join the program.
In Shopify’s basic plan, which costs $29 a month, only one person can manage fulfillment details. If you want to designate more people to have access to order information and other SFN data, you will have to sign up for the $299 premium plan.
The premium program also provides real-time shipping updates, which will make it easier for your customer service team to send updates to buyers about where their orders are.
Similarly, with all the available data and updates, you can track your inventory levels easily so you don't have to guess when it's time for replenishment.
On top of that, you have to pay for storage, picking, packaging, and shipping costs separately. Their fees vary depending on your product, where you’re shipping to, and so on.
Here are some points you should consider before signing up for SFN.
For small and mid-sized brands, being able to work with a fulfillment network like Shopify’s means you can guarantee quick shipping to your customers without having to negotiate contracts with third-party warehouse companies.
Shopify has already done all of that work for you.
If you don’t have the resources to build up your own fulfillment and logistics infrastructure, opting for Shopify’s fulfillment system can be a great way to guarantee fast shipping without having to give up your independence to a company like Amazon.
When you pick a fulfillment partner through Shopify, you can manage all of your orders in one platform.
If you also use sales channels like Amazon, Facebook, Etsy, and so on, all of those fulfillment choices will show up in the Shopify dashboard, on top of your Shopify Fulfillment Network products.
While Shopify has begun leasing its own warehouses for the first time, the Shopify Fulfillment Network is made up predominantly of third-party warehousing and shipping companies. Shopify doesn’t have its own delivery fleet.
That means you will ultimately be dealing with third parties.
Though Shopify vets each partner and uses its size to negotiate for good inventory storage and shipping rates on behalf of brands, if you sign up with SFN, you ultimately will lose some control over your shipping system.
To resolve issues that crop up during the shipping process, you’ll have to deal with the third-party shipper.
When shipping problems do crop up, whether it’s through the Shopify Fulfillment Network or through a fulfillment provider that you contract with directly, it’s important to ensure a good customer experience.
Have customer service teams on hand to keep your customers up to date about their orders.
Chatdesk Teams integrates with Shopify, and can provide customer service wherever your shoppers are—whether that’s in a live chat on your website or in the comments sections on social media.