We hear it all the time – you start out on your own with a Shopify store, fulfilling orders from your garage. Your ecommerce website catches on, and soon, what started as a side-hustle has turned into a full-time boxing and label-printing and shipping operation. The success is great, but your back isn’t happy with all the box-lifting.
It’s time to outsource your Shopify Order fulfillment to a third party logistics (3PL) company who can solve your operational headaches and let you get back to what you do best – creating and selling amazing products. There are so many 3PLs and warehouses out there. How do you choose one that’s right for your ecommerce business?
In this post, we’ll dive into what makes the best Shopify 3PL, and evaluate a few of the leading order fulfillment options in the industry today.
What Makes a Good 3PL for Shopify Sellers?
If you’re an ambitious ecommerce seller looking to boost your growth, you should know that the right Shopify 3PL can be a revenue driver, and not just a cost center. The best 3PLs will improve your delivery experience, delight customers and open new avenues for growth.
Here are the most important things to look for in your a 3PL for your Shopify store:
1. Nationwide USA warehouses
Don’t sell yourself short. Even if you’re small now, you can still distribute your inventory across the country to unlock affordable fast and free shipping without huge expense. That is, if your Shopify 3PL has nationwide warehouses.
You’ll want to make sure your Shopify 3PL has at least 4 order fulfillment centers across the USA, but ideally the best 3PL will have many more warehouses so that they can fine-tune exactly where your product inventory is placed to be near your largest customer base.
The best 3PLs offer true national order fulfillment services by placing inventory in 4+ locations strategically across the country. The benefit to you is that these networks cover 99%+ of US consumers with 2-day shipping at economy shipping rates. No matter where your customer wants their product shipped, you’ll have inventory nearby. They will get their products quickly, and you’ll pay the cheapest shipping rates possible.
If you aren’t already offering free 2-day shipping, it’s a recommended upgrade that can truly turbocharge your ecommerce growth. A recent McKinsey study found that a whopping 90% of US online shoppers expect free one-day and two-day shipping. Amazon metrics show that turning on the Amazon Prime badge can net up to 50% growth for a product!
Adding a banner or top bar to your Shopify store that says “Fast and free shipping” can boost your ecommerce conversions and revenue. See example below.
2. User-friendly shipping software
As a business owner, it’s tough to give up control and outsource to other companies. The best Shopify 3PLs know that, so they provide their customers with easy-to-use shipping software that provides proactive notifications and robust reporting on how they’re doing. If you can’t get real-time updates on the status of your orders, your inventory levels, and shipping and order fulfillment costs, then you’re not working with a cutting-edge 3PL.
One key benefit of great 3PL software is proactive issue notifications. Unfortunately, things go wrong all the time in the logistics world. It can be as simple as an undeliverable address input by a customer, and as complex as a worldwide shipping crunch. Your 3PL shouldn’t leave it up to you to find issues in fulfillment – for instance, the software should alert you when a customer places an order with an undeliverable address. You can then fix the issue with the address before it turns into a late shipment, and you’ll keep the customer happy.
Top-tier reliability
Reviews are your lifeblood, and a happy customer is a repeat customer. You probably can recall more than a few lost customers and poor reviews that were due to errors in the fulfillment and shipping process that likely weren’t even your fault!
Nothing is more frustrating, and your 3PL should minimize these issues.
Look for an on-time fulfillment rate of 99.9% or higher – anything less signals a 3PL that isn’t built for the rigorous demands of modern eCommerce.
Top 3PLs designed for eCommerce order fulfillment will also integrate technology like barcode scanning into their warehouses to eliminate errors. Simple but effective innovations like these stop issues before they happen, and they also fuel the functionality of the software mentioned above.
Shipping discounts and carrier flexibility
Shipping fees eat up a significant chunk of every merchant’s profits, but where there’s cost, there’s opportunity. A 3PL that ships a huge volume of packages every year will negotiate preferred rates with major and regional parcel carriers alike, and they should pass the savings on to you.
Source: ShipStation
Beware – a trick becoming more common in the 3PL industry is consolidating pricing into just one line item, or not showing you what you’re paying for every piece of the service. While it can feel helpful to just be quoted one simple price, keep in mind that this enables the 3PL to charge you more for shipping than what they’re paying the carrier, and keep the difference.
The best 3PLs work with all carriers, and not just one. It’s simple – different carriers have the best rates for different routes and package sizes, to name a few variables that change who you should ship with. If you’re locked into one carrier, then you’re not getting the best shipping deal.
Pre-built integrations and open APIs
It shouldn’t be hard to connect your Shopify store to your 3PL – the best ones have pre-built integrations that will do it with a few clicks.
This goes for more than just Shopify, too. Many merchants are pushing into multiple sales channels to maximize growth, and your 3PL should be able to easily integrate with all of them. Their integrations make it easy to switch fulfillment and get up-and-running with the new service in no time.
Not every tech stack is ready for pre-built integrations, though, especially for larger eCommerce merchants with pre-existing custom work. For that, your 3PL should have an open API and support resources that make the integration process as seamless as possible.
Responsive customer service
Finally, you should be able to get in touch with your 3PL easily to troubleshoot challenges and come up with fixes. Look for a 3PL that offers you a real person to work with your account, and multiple ways to get in touch with them. If it’s a small issue, live chat will do. Thornier challenges, on the other hand, should be governed by a detailed ticket system. And of course, you need a phone line for critical issues.
Top Shopify 3PL Companies
Now that you know what to look for, how do a few of the top players in the industry stack up? We’ve provided a primer to help jump-start your research.
Amazon Multi-Channel Fulfillment
You can use Amazon’s fulfillment network, FBA, to fulfill Shopify orders. When you do so, it’s called Amazon Multi-Channel Fulfillment – but it does in fact use the exact same resources.
Pros:
- Biggest eCommerce fulfillment network in the USA, powers fast shipping
- Robust software
- Pre-built integration with Shopify
Cons:
- Much more expensive than FBA, despite being the same service
- Only works with webstores – won’t fulfill for other marketplaces
- Unresponsive customer service
Shopify Fulfillment Network
Like Amazon FBA, Shopify is building its own logistics solution for eCommerce sellers, Shopify Fulfillment Network.
Pros:
- Combines seamlessly with your Shopify account
- Software helps with order and inventory management
- Dedicated customer service
Cons:
- Focused on fulfilling Shopify orders
- Not fast shipping by default; have to pay more
- Only 99.5% order accuracy
ShipBob
ShipBob is a 3PL that focuses on serving eCommerce merchants. They have a nationwide network of fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for eCommerce, they have an easy-to-use software platform and a large set of pre-built integrations.
Pros:
- Nationwide network of fulfillment centers
- Direct integration with Shopify as well as major marketplaces
- Chat & phone support
Cons:
- Not fast shipping by default; have to pay more and not always ground rates
- Pricing is opaque – they say that Pick and Pack and Standard Packing is “free”, but of course they make up for that by overcharging elsewhere
Red Stag Fulfillment
Red Stag Fulfillment is a more traditional 3PL, with only two locations in the United States. They offer B2B fulfillment in addition to B2C, as they have a wider focus than eCommerce.
Pros:
- Shipping discounts across different carriers
- Pre-built integrations with marketplaces and shopping carts
- >99.9% order accuracy
Cons:
- Only two US warehouses – they can’t cover all Americans with affordable two day shipping, let alone one day that is becoming the norm
Cahoot: The Best Shopify 3PL
Cahoot’s fulfillment network is built for eCommerce. We’ll help you level the playing field with marketplaces and delight your customers with a stellar, Amazon-like delivery experience – right on your Shopify store. And of course, we don’t stop there. We have pre-built integrations with major marketplaces to fuel your multi-channel growth.
Our innovative peer-to-peer model offers low-cost, fast fulfillment by design. As a result, our pricing is typically lower than that of other top providers listed above, but we can beat them on fulfillment speed and reliability.
Cahoot is committed to helping Shopify sellers grow their businesses with our fast and affordable eCommerce fulfillment service.
If you’d like to find out how Cahoot can help your business, please get in touch with us. We can’t wait to show you how Shopify fulfillment was meant to be.
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