Multi-location fulfillment, also known as multi-location inventory, is an excellent way to scale your ecommerce business as your order volume grows. Adding additional fulfillment centers can expand your inventory capacity and bring fulfillment closer to the customer.
However, managing fulfillment across multiple locations can make this process much more complex. You may need to understand:
Which locations have inventory available for all or most of the items in an order?
Which fulfillment locations are closest to the customer?
Is the fulfillment location in the customer’s destination country?
Can this order be fulfilled from my preferred locations?
A decision process that becomes much more time-consuming as order volume grows. That’s why we’ve built smart order routing. A feature that lets merchants with 2+ locations to automatically route orders from the best fulfillment location based on a set of custom rules, whether that’s a warehouse, a retail store, or a third-party logistics provider (3PL). Start routing orders!
How does it work?
Order routing is the process of efficiently allocating fulfillment of a customer’s order. With Shopify’s smart order routing, you can automatically prioritize the best fulfillment location to fulfill an order based on a set of rules. Smart order routing is flexible and easy to configure, allowing you to choose from four prioritization rules available out of the box. These rules include:
Ranked locations: to rank certain locations higher than others based on the needs of your business, whether that's a storefront, warehouse or 3PL
Ship from the closest location: to prioritize based on the location that's nearest to the delivery address
Minimize split fulfilments: to route orders to the location that has most of, if not all, the order items in one place
Stay within the destination market: set rules to prioritize locations in the same market as the delivery address when possible, to avoid custom tax and duties
Once the rules are chosen, they can be ranked in order of priority with a drag and drop. As an order comes through, Shopify automatically checks which fulfillment locations have that inventory available, then applies the order routing logic set to determine the location that orders get sent to for fulfillment. Watch video!
The benefits of smart order routing Easier to scale: By automating the fulfillment process across multiple locations, you can reduce the need to manually choose fulfillment locations and fulfill orders more quickly as your business grows.
Flexible fulfillment options: Smart order routing lets you keep control over your fulfillment operations by setting and sequencing order rules tailored to your business needs, whether that’s prioritizing locations closer to your customer, prioritizing warehouse locations over retail locations, keeping shipments within the destination country, or minimizing split fulfillments.
Reduced shipping costs: By setting an order routing rule to fulfill and ship orders from the closest warehouse to the customer, you can save on shipping costs and pass those savings on to your customers.
Faster delivery times: Delivering products from the nearest fulfillment location to your customer can also significantly reduce transit times, resulting in faster delivery and increased customer satisfaction.
Increased customer loyalty: Faster delivery times and lower shipping costs can lead to increased customer satisfaction and loyalty, driving repeat business and positive word of mouth.