If you own a Shopify store or use Shopify e-commerce software, you’ve likely heard of the SFN – Shopify Fulfillment Network. The Shopify Fulfillment Network is a Shopify service that provides picking, packing, storage, inventory management, and shipping for Shopify sellers. In this network, the seller would ship merchandise to a distributed full-service network of Shopify fulfillment warehouses. From there, the seller’s items are stored until that product is sold. When an item is sold, it then begins processing, it is shipped out, and will be tracked with end-to-end package tracking.
It’s obvious Shopify knows what their doing, they’re tapping into existing distribution centers and warehouses. Due to this, Shopify has created a platform that’s designed to manage fulfillment and warehousing. If you have a Shopify store, it makes sense, you want a Shopify fulfillment solution if you’re fulfilling orders on the Shopify platform.
Companies and merchants that use the network is able to send inventory to a wide range of Shopify partners, they fulfill these orders as they come through. This is very promising, right? If you’ve been struggling with your fulfillment, warehousing, and every area in between, that may be exactly what you’re trying to accomplish. It you’re facing challenges on that end of the business, it sounds like it could be a life saver. While we won’t discount that, it doesn’t mean it’s the right fit for your company, we can’t stress that enough.
Shopify did go public and stated it had reviewed all fulfillment centers in their network and they guaranteed users will get a high-quality result and a safe workplace. The company does have the means to do so, this is a large network of partners we’re talking about here. It connects all Shopify fulfillment services, so you won’t have to handle anything individually beyond keeping track of inventory counting.
Here at Thill Inc., we’re all about being transparent, so let’s take a closer look at the Shopify Fulfillment Network (SFN).
How Does Shopify Fulfillment Network Work?
To get started using the Shopify Fulfillment Network, you’re going to need an application. If Shopify reviews your store and shipment details, you then begin the process of working within the fulfillment network. It’s a simple process, very straight forward and to the point, everything can be controlled in your admin panel on Shopify
To break this down so you understand, let’s focus in on the most important parts of the process.
- You will be responsible for choosing what products will be shipped by the Shopify Fulfillment Network. You will need to get these products approved.
- You’ll have the opportunity to work with Shopify to determine packaging, boxing, kits, inserts, etc.
- You will be responsible for sending your products to partner locations in the Shopify network.
- When you begin to make sales, SFN will distribute out to the other fulfillment partners so you can get orders picked, packed, and shipped.
- You can use your admin in Shopify to review inventory, set alerts, resupply, etc.
The system at Shopify is relatively simple, it’s not a complex system and that is the way it should be. You don’t want your customers to struggle using the software and tools. Like we offer here at Thill Inc. for users, you’ll be able to get your metrics in the dashboard. Now, it won’t be to the level you’d see if you partnered with a 3PL, but it can be useful if you need a lot of decisions made for you.
Once everything gets approved, Shopify is in control over the day-to-day fulfillment tasks. This includes;
- Shipments receiving and processing
- Storing inventory
- Picking orders as the sale comes in, the specific sales channel wouldn’t matter
- Packaging orders, either with standard boxes or custom packaging you send to each distribution center
- Buying shipping and automating the delivery of tracking orders and carrier tracking information
- Inventory management, including recommendations for reallocation, resupply, and minimum inventory levels.
- Returns and exchange processing, including verification of goods so that they can be added back to your active inventory.
You Have To Be A Shopify Customer, Right?
A common question asked a lot, do you need to be a Shopify customer?” There is no guarantee you’ll be able to use the Shopify Fulfillment Network. Shopify approves these companies on a case-by-case basis, so you’ll be forced to wait on that decision. Despite that, there is some general guidelines they give you and if you can meet those requirements, Shopify may accept you.
For your business, SFN will work if you:
- Have a Shopify account and sell through it
- Need to fulfill sales in the United States
- Offer fewer than 2,000 SKUs
- Ship at least 10 orders per day
- Ship under 10,000 orders per day
- Don’t offer any prohibited or regulated products
To answer that common question, yes, you need to be an existing or new Shopify customer. You’ll need to sell directly through Shopify channels to gain access to the SFN. If you don’t meet the Shopify requirements above, you will likely have to go another route with your fulfillment, but we’ll be discussing that in detail below.
Top Concern For SFN: It’s Restricted Items
There’s always pros and cons to order fulfillment, but SFN has a major problem, or you would have a major problem if you tried to use Shopify Fulfillment Network. That problem? It’s restricted items, products that are not allowed.
If you have heavily regulated or perishable items, you won’t be able to use the network. The regulations that Shopify mentions are likely meant to cover its set of restricted items. While there’s a number of different items on the list, you’ll see the biggest restrictions on that list include firearms, and rightfully so. However, that list goes beyond just firearms and they can change the rules anytime they want. While that is their right, if you sell products in those categories, you won’t be able to use their fulfillment network.
We also recommend looking at the company’s Payment Terms for another separate list of prohibited items. You’ll also want to read their agreements for illegal “services,” too. If you’re not sure or can’t find the answer, be sure to reach out to a fulfillment expert as needed.
Shopify Regulated Or Illegal Products Or Services
- Cannabis dispensaries or related businesses
- Sale of tabacco, e-cigarettes, e-liquid
- Online pharmacies, prescription only products – including card-not-present pharmaceuticals
- Peptides and research chemicals
- Fake references or ID-providing services
- Age restricted goods or services
- Weapons and munitions
- Gunpowder and other explosives
- Fireworks and related goods
- Toxic, flammable, and radioactive materials
- Products and services with varying legal status on a state-by-state basis
- Goods or services, the sale of which is illegal under applicable law in the jurisdictions to which your business is targeted or directed
While you have the list above to reference, there’s a few more things you can’t use SFN for.
- High-risk businesses
- Multi-level marketing scheme products
- Anything related to drug use
- Anything that may mimic drugs
- Pseudo pharmaceuticals
Now, given all of that, would you be able to fulfill orders with Shopify? That’s an important question to ask.
The last thing you want to do is spend time, money, and effort on SFN only to find out later you can’t fulfill your orders.
Shopify Fulfillment Network Pricing
Anytime you work in logistics, fulfillment, supply chain management, and distribution, you often hear “it varies” as it pertains to pricing. That is true, it depends on a lot of different factors, but there’s ways to be clear about pricing. If you do want to learn more about order fulfillment cost, click here.
As for Shopify Fulfillment Network pricing, they’re similar as everyone else, but we’ll break it down for you.
According to Shopify, you will receive a quote based on your product SKUs, volume expectations, size of products, locations, and more. Your company would get custom pricing, this would be focused into 4 different segments, those would include;
- Inventory Storage: This covers total products and how much space they take up across all fulfillment centers used.
- Pick Pack Rate: Standard rate based on how many orders you’re filling.
- Transportation: The cost to ship orders to customers. While you set options (such as two-day shipping), the Shopify platform will automatically choose shipment methods to meet your requirements, with the company saying it’ll “automatically search for the most affordable rate so you don’t have to.”
- Special Projects: Bundling, receiving, validating inventory, and more. We’ve got a deeper dive into Special Project Fees next.
An essential feature of the Shopify platform is that you get a single monthly bill when you join the SFN. Shopify will add all SFN charges and costs to your existing Shopify subscription and clearly label each charge.
The Special Project Fee Notice
Yes, there’s a Special Projects Fee segment, let’s talk it about real quick.
Shopify’s network comes with Special Project Fees, they say these can be charged at one time or for multiple projects where you work with network providers. These fees are added to your monthly fulfillment rate and generally include elements such as inventory validation or if you use the service to create bundles and kits. You’ll also be charged a specific fee for products returned by customers, this fee would be outlined in a SFN Order Form.
Now, Shopify also uses this fee term to cover penalties. One example given, if you don’t meet the inbound product requirements in your contract, Shopify can charge you an applicable Special Project Fee that is at least two (X2) times the applicable receiving rate. If you plan on using them, make sure you read through this section carefully. The agreement to use the network is called the SFN Merchant Order, this will outline these fees and provide their calculations accordingly.
As we’ve always said, ecommerce fulfillment should never have surprise costs, NEVER EVER.
If you do get accepted to SFN and your allowed to use the network, there are a solid benefits. We did browse through the few reviews we could find and here’s what customers had to say;
- Inventory management was simple. One admin panel and platform to control it all, total distribution nodes don’t matter.
- Analytics include support for demand forecasting, replenishment, and inventory allocation. Shopify makes recommendations as well based on typical customer locations, DC size, and more.
- Support for exchanges and returns at each unique fulfillment center, allows you to automate processes.
- Trusted, quick shipping, may access discounted rates with UPS and USPS.
- Same-day fulfillment could be available, customers and the distribution center must be located in that market, size/volume requirements likely required.
- Control over your data. Shopify is trusted for data management, and this makes some people feel more comfortable than Amazon, which has turned partner data into its own products and strategies.
- Includes support for Shopify sales elements, including Flash Sales, wholesale channels for B2B, and subscription orders, although some additional costs may apply.
Shopify Fulfillment Network partners also use a variety of technology platforms and options from Shopify. One common element is the Chuck robotic picker support system from 6 River Systems. It’s a collaborative picking unit that’s interesting in its own right and can help reduce picking errors.
Network’s Support Channels
Shopify customers will get access to standard 24/7 support teams via both phone and email. If you do happen to join SFN, you will get customer service options for a select “Fulfillment Success Team,” they know the SFN platform and can help troubleshoot issues that could be related to distribution, location, handling, customer service, and more.
Instead of contacting different companies from distribution centers, you’ll work directly with Shopify for any customer service concerns.
Focus On Product Dimensions And Changes
We did take the time to check out their Terms Of Service for the Shopify Fulfillment Network and found a few key points we wanted to bring to your attention. The majority of their terms of service is straightforward, but we know you want to have absolute confidence when it comes to the products you ship using Shopify. You want to be sure you have crystal clear clarity and you’re not surprised by anything.
Here at Thill Inc., we discuss product dimensions and weight all the time. If you’re a regular reader, you already know how important it is and how important it is to understand. SFN requires you to list the weight and dimensions of each individual product accurately. They also require you to fill out a Harmonized Sales Tariff Code to Shopify. If any of your numbers are different from the product you deliver, the service’s cost estimator will be wrong. If that is the case, you’ll be charged an additional amount to make up for the actual cost of shipping.
While this is commonplace, we want to point out a few key things you should be aware of.
- In the case that your weight and dimensions are not correct, if it causes an issue, Shopify will charge you for relative administration costs due to the mistake. If you make multiple mistakes, those charges could compound.
- If you’re paying more than you should, it’s likely that Shopify isn’t going to refund the overpayment. In fact, you may not even be alerted that it happened in the first place.
Written Notices For New Product Registrations And Changes
If you need to register a new product or make significant changes to a current product, you’ll be required to give Shopify at least a 30 day notice. Shopify will need to approve your new product for shipping through its fulfillment network before you’ll be able to ship it.
What happens if you don’t provide early notice and send something out before Shopify approves it? If you do that, Shopify may not fulfill the order at all. You then run the risk of upset customers and it only takes a few upset customers for things to fall apart. If Shopify decides against you or they have to store these products for a long duration, you may have to bear those costs and expenses if the delay is deemed as being your fault.
Bottom line, the Special Project Fees, you may find yourself on the end of these charges.
The Concerns We Have For SFN Customers
While many of you may think that Shopify is an affordable ecommerce fulfillment option, the SFN is on the expensive side when compared to other fulfillment solutions. Even so, as we always say, you shouldn’t make a decision based on costs alone. In fact, costs is not what we’re worried about. Our primary is that fact that you have limited control over your inventory and shipping, that can be a huge problem.
Shopify integrates with a wide range of 3rd party fulfillment providers, and your inventory will likely be spread across multiple warehouses from multiple companies. Talk about a tough time trying to control quality. It doesn’t matter how big of a team you have, that’s a lot of to keep track of.
Now, the SFN service is still relatively new, there’s not much public information or customer reviews about quality control or how well the company manages disputes or issues with fulfillment companies.
Fulfillment Is Key To High Customer Satisfaction
Here at Thill Inc., we’ve worked with many companies and we know first hand how important fulfillment is to ensuring high customer satisfaction and repeat customers. There’s a lot that gained optimizing your order fulfillment process but if left ignored, there’s also a lot you can lose.
Shopify has some good tools and management, but it’s not about what they have, it’s about what they don’t have. As of now, Shopify doesn’t have an in-house quality team controlling every order. Talking from experience, we know how big of a mistake that is. When you don’t have this control in place, you end up finding errors/mistakes days later, weeks later, a month later. As we always say, it doesn’t take but a few mistakes to buckle your whole company, that you don’t want. Those problems can’t get very serious quick if you have customers who decide to be vocal, social media alone has the power to disrupt your business quickly.
Due to that, we feel it’s vital to create relationships with our customers to avoid circumstances as we just described. You’ll have the opportunity to get to know us and our process, get regular updates, and have consistent audits to ensure that your orders are going out correctly, on-time, and meet your specific packaging standards. All of these are a part of the commitments we make to you when you with partner with Thill.
If you’re asking yourself whether SFN would makes sense for your business, why not reach out to us? We can help you understand if it’s right for your business or if you have a better options available. Thill Inc. integrates with existing Shopify sales channels, allowing you to use the platform but know exactly who is handling your orders at all times. If we’re not right for your business, we can make recommendations and point you to someone that may be able to help. Either way, you’re going to get your questions answered and get the help you need.
We have over 50+ years of fulfillment experience, very few fulfillment companies can say that. We’re proudly family owned and look forward to helping you create solutions for your issues. Reaching out to our team is easy, just use the contact form or give us a call at 1-920-967-9201.