[Guide] How to Automate Your Shopify Order Fulfillment
Shopify is a great platform for running a storefront, primarily because it handles a lot of the everyday tasks of maintaining a store on its own. Keeping product pages up to date, sync with inventory, handling payments; it does a lot.
But not everything. Shopify alone, out of the box, simply hands you your orders when they come in. It’s up to you to package up, fulfill, and track all of those orders. That’s fine for a small shop that sells a few dozen products each month, but if you’re looking to grow and scale, it becomes unsustainable.
That’s where automation comes in. Technology allows us to automate fulfillment in a few different ways, all of which are great options for handling a growing store.
Which one is right for you? Read on to find out.
Determining Your Situation
Every business needs some manner of order fulfillment system in place, but the nature of that system depends a lot on the kind of business you’re running.
If you’re selling a physical product you create locally, such as hand-made goods, you’ll need to consider using a system where you can ship the goods to a third party, who then handles managing the inventory and fulfilling orders.
If you’re selling a physical product that you don’t produce locally – such as items produced in an overseas factory and sold via your site, in a dropshipping agreement – you’ll need to either use whatever process they have set up or use a middleman to handle the order fulfillment process. This also applies to products that are created on-demand, such as print-on-demand apparel, art prints, or other items.
If you’re selling digital goods, order fulfillment becomes more a matter of authentication services and digital transactions. The good news is, that’s a lot simpler.
Knowing the flow of orders and the typical path of a product from manufacturing to shipment is important for setting up a fulfillment process and will help you decide which of the following systems will work best for you.
Picking a Fulfillment Service
Once you know your needs, you can pick a fulfillment service that handles those needs. Here are some of the better options you can explore.
Fulfillment By Amazon – The most popular shipping and fulfillment system is by far Amazon’s offering. Amazon, being one of the world’s largest retailers with distribution centers around the globe, is easily able to maintain your inventory, fulfill your products, and handle basically everything from the sale to returns and beyond.
Amazon actually offers two forms of this system: FBA and MCF. FBA, as a term, is used to refer to both of them. Strictly speaking, fulfillment by Amazon means that you send your products to Amazon, you sell through Amazon, and that’s it. It doesn’t consider your Shopify store as part of the process at all.
In order to integrate with Shopify, you want to use the “MCF”, or Multi-Channel Fulfillment. MCF allows you to ship your items for indexing in the Amazon warehouses and distribution centers. You can then use both Amazon, your Shopify store, and any other sales channel you want to use all at the same time. When a user makes a purchase through your Shopify store, the order is sent to Amazon and Amazon fulfills it, the same as if the order was purchased from Amazon directly.
Amazon has a lot of benefits, including extremely high reliability, relatively low costs, and a global reach. On the other hand, a lot of people are reaching a point where they don’t want to support Amazon, or have had issues with Amazon in the past, so they may be looking for alternatives. Luckily, Amazon isn’t the only game in town.
Shopify Fulfillment Network – Shopify doesn’t want to be left in the dust by Amazon here, so they have been gradually building up their own fulfillment network. Like Amazon, they have distribution centers across the country, with product inventory, robotic assistants to help with organization and shipping, and reasonable pricing for stores that want to use their system.
Like with Amazon, you send your products to storage within a Shopify warehouse. When a customer makes an order, that order is referred to the Shopify distribution center and process, shipped, tracked, and confirmed as necessary.
If the Shopify system seems familiar, that’s because it’s modeled heavily after Amazon’s system. They are essentially trying to take a position as “what Amazon does, but more ethical.” They promote themselves with perks like fair pay and benefits to their distribution partners, and so on. Otherwise, the process is more or less the same; you send orders to their distribution center, which handles the fulfillment process from start to finish.
There are two drawbacks to Shopify’s distribution system as opposed to Amazon’s. First, they’re largely a single-channel setup. You can use multiple Shopify stores with their fulfillment network, but you can’t use a non-Shopify platform. The second is the coverage. Amazon is a global company with distribution centers in numerous countries. Shopify, thus far, only has distribution centers in the United States.
Oberlo – Oberlo is one of the most popular fulfillment services specifically for one kind of online commerce: dropshipping. With dropshipping, your storefront acts as a middleman between the customer and the manufacturer of an item, without being the one involved in developing or manufacturing the item directly. It’s common, profitable, and reliable in many industries.
Oberlo is a Shopify app that serves as a dropshipping engine. Using their platform, you can find dropshipping suppliers and set up deals quickly and easily. Just by using the system, you’re already offloading fulfillment to the suppliers, who already have their own processes set up to handle it. Since it’s a Shopify app, it’s already easy to install and get running.
There are a few downsides to using Oberlo, though. First, it’s an extremely popular app, which means that there are thousands upon thousands of stores out there already using it. Trying to carve out a unique niche for your dropshipping using a saturated platform is much more difficult than you might think.
Secondly, Oberlo is also limited to the Shopify platform, like the Shopify Fulfillment Network. You can’t use it on other platforms, because it’s a dedicated Shopify system.
That said, Oberlo is generally quite good if dropshipping is your goal. If you’re trying to sell your own hand-made products, products from a supplier not on Oberlo, or digital products, you’ll probably want to go with a different system.
Rakuten Super Logistics – Rakuten is a Japanese company often described as “the Amazon of Japan”. The company has been expanding over the years, initially with the purchase of Buy.com, along with a dozen other regional companies in places like France, Brasil, Germany, Spain, and Canada.
As a global retailer and distributor, they have much the same style as Amazon’s distribution network, with a high level of global saturation. Where Amazon is one of the primary means most people buy things online in the U.S., Rakuten serves that purpose for many other countries.
It should come as no surprise, then, that Rakuten offers their own version of a fulfillment service, in this case called Rakuten Super Logistics. Rakuten SL (as it’s often called) allows you to register your business and send them your products for fulfillment. Setting up the system on the back end of Shopify is much the same as any other system, though it’s worth mentioning that the app they used to have on Shopify is currently not available. In order to use Rakuten, you will need to sign up with them directly.
Shopify Digital Downloads – If your store sells primarily digital products rather than physical products that require shipping, you can still set up automatic fulfillment. The difference is, instead of sending off an order to a third party and relying on them to serve your products, with digital downloads, Shopify can do it directly.
The Shopify Digital Downloads app is an extension for Shopify that allows your store to automatically serve digital files – ebooks, tutorials, zip files, executables, or whatever other digital product you sell – immediately upon confirmation of the purchase. Like other apps, it’s easy to set up and use, and it’s automatic by default.
Activating a Fulfillment Service in Shopify
Once you have picked a fulfillment service to use, you’ll need to set it up. Part of this will involve whatever process the fulfillment service itself requires, but part of it is linking it to your Shopify store. After all, you can’t set up automatic fulfillment if you don’t have fulfillment enabled.
Make sure to only do this if you’re using a third-party fulfillment service that doesn’t have specific integration with Shopify. For example, Fulfillment by Amazon has its own specific way of adding it to a store, which we’ll cover in a moment.
Once you have registered an account and activated whatever your third-party fulfillment service is, you need to go to your Shopify admin panel to activate it there. In the admin panel, go to Settings, and then find the Shipping and Delivery section.
In this section, there will be an “Accounts and Integrations” section, with several options. You want to click the “Manage Integrations” button. This will bring up a box saying custom order fulfillment. Click the button to add a fulfillment service.
This will bring up a form for you to fill out. You will need the title of your fulfillment provider and their email address.
Next, you will need to go to your product pages and make sure they are set to be fulfilled by your new service. In the Inventory section, choose the fulfillment service you just added for each product under the “inventory managed by” section. Save your changes, of course.
Once you add this information, you’re good to go. Now, when someone makes an order on your store, the order is generated as an email and sent off to your fulfillment service, who does the work of handling the processing and shipping.
The granularity of choosing a fulfillment service per product is helpful if you have multiple dropshipping suppliers or if you have a mixture of products that includes both first-hand sales and third party sales.
Adding Amazon MCF
Amazon has a well-defined integration with Shopify, but it’s quite complex since Amazon and Shopify both have a wide range of options and configurations. You need to be careful when setting up this integration because differences between Amazon’s data and your Shopify data can cause issues.
First, you need to register an Amazon Seller Central account and go through the process of setting it up. This includes uploading a list of your products, including accurate SKUs. If the SKU doesn’t match, Amazon won’t be able to fulfill the product.
Next, visit this link to sign up for Shopify’s Amazon Marketplace Web Service. This will link your two stores together and should return you to your Shopify store once all is said and done.
At this point, you’ll need to set shipping rates where applicable. These are the shipping rates you charge, which cover the cost of Amazon’s fulfillment rates and whatever extra charges you need. This guide has a good overview of how to do this.
Now you’ll need to set the products you want Amazon to fulfill. This is the same process as above; go to your Products section, find the product you want to change, and adjust the shipping and fulfillment information. With Amazon’s MCF, they handle inventory tracking, so you’ll want to choose “Amazon Marketplace Web tracks this variant’s inventory” as well. You’ll have to make absolutely certain that things like the product weight and SKU is accurate as well. If you have a lot of products to change, you can use the bulk editor here.
The Risks of Automatic Fulfillment
There are a few risks to using a platform for automatic fulfillment. You should be aware of them prior to implementing any of the systems above.
First and foremost is the risk of fraud. With all facets of e-commerce, there are bad actors who want to use stolen information to make purchases and never pay for them. A poor fulfillment system will fill those orders and hit you with the charge-backs later, and a poor logistics company will fail to account for these problems. You’ll want to make sure whatever system you go with has adequate fraud detection in place.
Secondly, some automatic fulfillment systems have had issues with duplicate orders in the past. Some, like Rakuten, may not have adequate compensation in place, as per some reviews of the platform. Others like Amazon typically eat the cost to keep customers happy. You’ll want to monitor any automatic system to make sure it’s not causing problems.
Any time you’re making a major change to your order, fulfillment, and shipping process, you should make sure to test it before fully making the switch. In most cases, you’ll want to consult with a professional before your store starts shipping out orders to people automatically.
Running a few test orders, including a return, will let you experiment with the system before converting your entire storefront to run on it. Be sure to exercise caution and make sure you’re fully happy with any system you commit to using.
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