Shopify Fulfillment Network and Services An Overview

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Shopify’s Fulfillment Network provides storage, inventory management and packing services for Shopify sellers. The Shopify Fulfillment Network is a network of fully-serviced fulfillment warehouses that distributes merchandise. Items are kept and accounted for until they sell. Once items have been sold, they are processed and shipped the same day. Tracking is provided via end-to–end package tracking.

Shopify’s existing warehouses and distribution centers have been leveraged to create its own platform that can manage your fulfillment and warehouse needs. This network allows companies to send their inventory to Shopify partners. They then fill orders as they arrive, simplifying warehouse and inventory management. This network can be a great alternative to managing your inventory if you are having trouble with this aspect of your business. However, it may not be the best choice for every company.

Shopify claims that it has thoroughly vetted every fulfillment center in its network. This will ensure that they provide a safe work environment and high-quality results. Shopify connects all fulfillment services so that you don’t need to manage anything apart from tracking inventory.

It will be a great way to manage web sales and other related activities. Let’s look more at the Shopify Fulfillment Network.

How it works

The first step in using the Shopify Fulfillment Network is to complete an application. After the company reviews your shop and your shipment requirements, you can begin the process of joining its fulfillment network. This is a simple process that can be managed via your existing admin panel. These are the important steps:

  1. Shopify Fulfillment Network will ship the products you choose and approve them.
  2. Shopify will help you determine the packaging of your products, including inserts, infills and kits. You can either send your own branded material or get packaging included in your pick pack rate.
  3. Shopify partners can receive your products. Shopify will provide specific recommendations about where to find your products, including volume levels.
  4. You can make a sale via Shopify channel (your shop, Facebook, Amazon Etsy, Instagram), SFN distributes them to various fulfillment partners so that orders can be picked, packed and shipped.
  5. You can use the admin panel for inventory amounts and resupply partners if they are below certain thresholds.
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Shopify makes it easy for the SFN. You won’t find a complicated system on your end. Your existing Admin panel also includes metrics and dashboards, which makes overall management easy. Although you won’t be able to make as many decisions as if you had your 3PL own, it can still be helpful if you have a lot to do.

Shopify will manage your daily fulfillment tasks once you have been approved.

  • Receiving shipments and putting away inventory
  • No matter what sales channel, pick orders as they occur
  • You can either package your order with standard boxes or custom packaging and send it to each distribution center
  • Automating shipping orders and tracking information.
  • Inventory management includes recommendations for reallocation, replenishment, and minimum inventory levels.
  • Returns, exchange processing, and verification of goods in order to add them back to your active inventory.

Are you a Shopify customer?

Shopify approves every business individually, so you won’t get the SFN automatically. However, Shopify has provided some guidelines and we have spoken to a few businesses that said they added the SFN after meeting these requirements.

SFN is a great option for your business if you:

  • Shopify accounts are available to sell online.
  • You want to make sales in the United States
  • Limit your SKUs to fewer than 2000
  • Minimum 10 Orders per Day
  • Ship under 10,000 orders per day
  • Do not offer prohibited or regulated products
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To access the SFN, you must be a Shopify customer, either new or existing, and sell through Shopify channels.

The big caveat is: Restricted items

The most important thing about applying for and using SFN, is that you cannot offer products that are highly regulated or perishable. Shopify’s list of restricted items is likely to be covered by the regulations they mention. A variety of firearms are included in this list.

You should also review the company’s payment terms for a separate list of prohibited items . You can also review agreements regarding illegal “services” just in case.

You cannot also sell or fulfill any drug-related products, high-risk business, multi-level marketing schemes products, pseudo-pharmaceuticals, or anything that mimics drugs.

Before you submit your application, make sure you carefully review everything. You don’t want any surprises after you have invested so much time and money in the SFN.

Shopify Fulfillment Network pricing

If you have ever worked in logistics, you will know the answer to any question about pricing: “It depends.”

Shopify Fulfillment Network works the same way! The company will provide a quote that is specific to your product SKUs and volume expectations, as well as the size of your products, location, and other factors. Each company receives custom pricing that is broken down into four sections:

  1. Stockroom storage. This includes total products as well as how much space they take-up across all fulfillment centers.
  2. Standard rate based on the number of orders you fill.
  3. Transportation. Shipping costs to customers. Shopify allows you to set shipping options, such as two-day shipping. The platform then automatically selects shipment methods that meet your needs. Shopify claims it will “automatically search the lowest rate so you don’t have to.”
  4. Projects that are unique. Bundling, receiving, validating inventories, and many other things. We’ve got a deeper dive into Special Project Fees next.
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Shopify’s SFN membership allows you to receive a single monthly bill. This is an essential feature. Shopify will add all SFN costs and charges to your Shopify subscription, and clearly label each one.

What is a “Special Project Charge”?

Shopify offers Special Project Fees. These fees can be applied to projects you are involved in with the providers or one-time. These fees are added to your monthly fulfillment rates and include elements like inventory validation and if you use Shopify to create bundles or kits. Customers who return products to you will also be charged a fee. This fee is detailed on your SFN Order form.

Shopify can also use this fee term to pay penalties. Shopify may charge you a Special Project Fee if you fail to meet your inbound product requirements. This is typically “at least two (2) time the applicable receiving rate.”

The SFN Merchant Order is your agreement to use the network. It will outline the fees and calculate them. However, you should carefully review each application to see when you might be charged.

Remember ecommerce fulfillment should not come with unexpected costs.

The network has many benefits

There are many significant benefits to applying if your application is approved and you can use SFN. These are some of our favorites, based on reviews from customers:

  • Simpler inventory management. All distribution points can be managed from one platform with an admin panel.
  • Analytics support replenishment and demand forecasting. Shopify also offers recommendations based on customer location, DC size, and other factors. Replenishment recommendations take into account seasonal trends, DC location, and days on hand.
  • Each fulfillment center offers support for returns and exchanges , which allows you to automate a large portion of the process.
  • You can rely on us for reliable, prompt shipping and some discounts with UPS and USPS.
  • Some markets offer same-day fulfillment. Both your customer and the distributor center must be present in that market. There may also be volume/size requirements.
  • Your data is yours to control. Shopify can be trusted with data management. This makes it more convenient than Amazon which has made partner data its own products and strategies.
  • Supports Shopify’s sales elements including Flash Sales, Wholesale Channels for B2B and Subscription Orders. However, additional fees may apply.
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Shopify Fulfillment Network partners use a variety technology platforms, options and tools from Shopify. Chuck, a robotic picker support system by 6 River Systems, is one common element. It’s an interesting collaborative picking unit and can help to reduce picking errors.

Additional support channels

Shopify customers have access to standard 24/7 support via email and phone. You can also join the SFN to get access to customer support options for a “Fulfillment Success Team”, who are experts on the SFN platform. They can assist you with issues related distribution, location, handling customer concerns, and many other things.

Shopify will handle all customer service issues directly, and you won’t need to contact other companies that manage these distribution centers.

Note about product dimensions and variations

We went through the Terms of Service for Shopify Fulfillment Network to find some important points to highlight. While most of the information is simple, you will need to be proactive and confident about shipping products via Shopify.

The platform will require you to accurately describe the product’s weight and dimensions. Shopify will also require you to give the Harmonized Sales Tariff Code. If the product you provide is different from what it will deliver, Shopify’s cost estimator may not be accurate and you will be charged an additional amount for shipping. This is standard. However, there are two important points:

  1. Shopify may not refund overpaid customers and may not notify them if that happens.
  2. Shopify will charge for any administrative costs incurred by Shopify if your measurements or weight are wrong. Shopify spokesperson stated that the costs can increase if you repeat the same error multiple times.
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Another important point to keep in mind about your products: Shopify must receive at least 30 days’ written notice if you want to register new products or make substantial changes to existing products. Shopify must also approve the shipping of your product through its fulfillment network.

Shopify might not be able to fulfill your order if you fail to give notice in a timely manner or if you send the product too soon before Shopify approves. Shopify may refuse to approve the order or store the product for a while before adding it to their fulfillment network. If this happens, you will be responsible for any costs and expenses Shopify incurs in processing and managing these products.

You’ll be responsible for any Special Project Fees charged by the company.

Control: A Big Concern For SFN

Shopify’s standard e-commerce offerings are more expensive than other systems. The Shopify Fulfillment Network is not the only thing that worries us. We are concerned that you only have limited control over inventory and shipping.

Shopify can integrate with many third-party fulfillment companies, so your inventory may be distributed across multiple warehouses of different companies. It’s difficult to manage and maintain consistent quality. Since the SFN service is still relatively new, there aren’t many customer reviews or public information about quality control.

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Customer satisfaction can determine whether or not they are satisfied and if they will make repeat purchases. Shopify has a team of quality control that oversees every order, but they do not have the resources to manage and vet DCs. Sometimes, you might not notice an issue until a few weeks or months later. These problems can get worse if customers don’t complain about the problem. This is dangerous as it could lead to customers not buying from you again.

Red Stag Fulfillment has a personal relationship with each customer to prevent this. We will get to know you and your process. You will also get regular updates and continuous audits to make sure your orders arrive on time, in good condition, and conform to your packaging standards.