Running a successful ecommerce business isn’t just about making sales - there are a multitude other tasks and responsibilities that need to be taken care of to make sure those sales run smoothly. One of the most important is fulfillment. Warehousing stock, managing inventory, forecasting, picking and packing orders, arranging shipping, and managing returns...it’s a big task for any business, and can be a tricky one to scale in the face of significant growth. Getting fulfillment right is crucial to the success of any merchant as it affects both the efficiency of your business internally as well as how customers perceive your brand in the post-purchase phase.
There are many different fulfillment options open to Shopify merchants, but one which has become a major first-choice is Third Party Logistics (3PL).
What are Third Party Logistics (3PL)?
Third Party Logistics partners are companies which handle different aspects of the fulfillment process for businesses. There are many different types of 3PL; some are full service end-to-end logistics who will manage orders from creation to shipping, others handle distribution only, and some manage only warehousing. Today, we’re focusing on end-to-end 3PL.
Put simply, you send your products to a third party warehouse, and they take care of the fulfillment when you get an order from picking the order, to packing it up and shipping it to the customer. They’ll even handle returns and inventory management, so your in-house team can focus on developing your products and customer experience. It’s a solution that’s useful for merchants for several different reasons:
- Minimize risks associated with investing in owned warehousing
- Implement a logistics solution that scales with business growth
- Alleviate fulfillment pressure from in-house teams
- Easily implemented solution to grow fulfillment capabilities after a period of significant growth
- Frees up time to invest attention and resources into other areas of the business
The market for ecommerce 3PL has seen significant growth in the last 12 months, making ecommerce the fastest growing sector for 3PL. If you’re looking for an end-to-end solution then one of the best solutions for Shopify merchants based in the US and Canada is the Shopify Fulfillment Network.
Shopify Fulfillment Network
Shopify merchants looking for a comprehensive, high-quality logistics solution need look no further than Shopify’s own fulfillment network. The team at Shopify have worked to develop a 3PL solution that puts merchant control first, ensuring that their warehouses and network seamlessly integrate into businesses.
Order management with full control
Taking fulfillment away from your primary site can feel a little nerve wracking. After all, you’ll have gone from seeing exactly how every order is picked and packed to putting full trust in a third party off-site. Shopify Fulfillment Network works seamlessly with your existing Shopify operations, meaning from one single back office you’ll be able to see from the big picture of your fulfillment operations right down to each individual order. You’ll even be able to control timing of orders that may require special attention, and SFN ensures that orders are packed with 99.5% accuracy with the help of robotic technology and offers same-day fulfillment. Shipping through Shopify Fulfillment Network is both fast and reliable, giving your customers the most affordable options.
Simple, intelligent inventory management
Inventory management is one of the most crucial aspects of the ecommerce fulfillment process, but it can also be one of the most time consuming. By outsourcing inventory management to a 3PL like the Shopify Fulfillment Network, you can save time and improve efficiency. You’ll be able to maintain full visibility of inventory levels in real-time and create custom alerts right down to SKU level to ensure you never run out of stock.
Beyond the basics, SFN can also handle bundling products, inventory counts, and returns processing. Using machine learning, SFN will also recommend where to keep more inventory and where to restock at which fulfillment centers based on sales data.
Complete picture of order data
Data drives many aspects of your business from what products to develop, to social media marketing, to sales forecasting and more. Whilst SFN will take care of the fulfillment process, all the data you need is still firmly in your hands. Customer data can be managed across all your sales channels from inside your Shopify admin, with all customer and sales data tracked in real-time with actionable insights.
Dedicated business support
Shopify’s support team extends beyond just your store, and their Fulfillment Network has their own Fulfillment Success Team who can lend their expertise to your business. The major benefit here is that you only need to deal with support in one place rather than chasing Shopify for one issue then multiple other 3PL partners for other answers. The Fulfillment Success Team are also Shopify Experts, meaning they understand the ins and outs of what merchants deal with on a day-to-day basis.
How to maintain brand authenticity
A concern for many merchants when considering utilizing a 3PL partner is maintaining brand authenticity. When your orders and inventory are managed in-house, you can closely manage every aspect of how an order goes out to customers. Your team packs the orders so they look just right, making sure that the crucial unboxing moment is a memorable one and boosts customer satisfaction in that important post-purchase phase. Maybe it’s handwritten thank you notes, or custom packaging; these small details add value and are important to the overall brand. There is a concern that by having orders packed by a third party, your brand may lose that sense of authenticity and that a 3PL may not be able to create that memorable moment for customers. However by working with your 3PL and developing exactly what that unboxing moment looks like, you can maintain brand authenticity and reap the benefits of 3PL fulfillment.
Figure out how to adapt your current order presentation
The good news is that Shopify Fulfillment Network does offer order branding as standard with their service, meaning merchants can ensure consistent branding despite orders being packed by a third party. There are of course limitations to what a 3PL such as Shopify Fulfillment Network are able to do when it comes to branding orders. For example if you typically have a team member sign off on packing an order, this isn’t something that a 3PL will be able to accomplish. Therefore, look at your existing order presentation and break it down into its individual elements including the box itself, packing materials, notes etc. Then look at how you can adapt it to what SFN is able to achieve. Some options include:
- Custom boxes
- Colored or custom printed packing tissue/materials
- Printed thank you notes or promotional material
- Freebies such as stickers or samples
Develop your post-purchase communications
Whilst you’re somewhat limited by order presentation, you can do more to maintain brand authenticity through how you communicate with your customers post-purchase. Look at what your team is currently doing with post-purchase email workflows and look for any gaps where you could do more.
“Thank You” post-purchase series
We’d highly recommend having a “Thank You” workflow as standard. Review this workflow and add in extra emails related to feedback and order satisfaction to show customers you care.
Personalized educational content
If possible, create a workflow that sends educational content for different products personalized based on a customer’s order. If you have a large catalog of products, you could do specialized emails for your bestsellers, and then general brand educational content for other products alongside personalized product recommendations.
Loyalty series
Rewarding your loyal customers is extremely important to your store as returning customers are much more likely to result in a conversion. Show customers that your brand values their patronage, and reward them for it with early access to sales, bonus discounts, and more. These are all easily implemented and will be easy to coordinate with Shopify Fulfillment Network.
Common questions about 3PL
How does 3PL work for international orders?
Internationalization is an exciting prospect for many businesses, especially with recent growth in cross-border ecommerce. It makes sense that if you’re considering international expansion that you want a fulfillment partner able to scale globally. The Shopify Fulfillment Network does offer merchants international order fulfillment, though it does require some additional admin work.
How does pricing work for Shopify Fulfillment Network?
Shopify encompasses an extremely diverse range of businesses both based on industry and size. Therefore their team works with merchants to create a custom quote based on individual business needs from storage, picking and packing, packaging requirements, and transportation. They’ll calculate how much it will cost to store your inventory daily, and then how much it will cost to actually ship orders to customers. Plus they’ll price up for any special projects you may want such as bundling products, validating inventory and more. This is then included as part of your existing monthly Shopify subscription bill, keeping things easy and transparent.
How does SFN work for B2B vs DTC?
Shopify Fulfillment Network allows for all different models of business to use their fulfillment network including wholesale/B2B. You can manage and develop multiple B2B relationships and orders along with inventory management the same way you can for DTC.
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Business growth is exciting - it opens more doors, and brings new opportunities. However it can also cause growing pains for many Shopify merchants with increased pressure on fulfillment and inventory. By moving your fulfillment to a Third Party Logistics partner such as Shopify Fulfillment Network, you can save time and stress allowing your team to focus on developing other areas of the business and finding new routes to growth.