Customer placed an order, it was fulfiled, but I haven't been paid yet

[Pantry6838]

I recently started an online store selling items via drop shipping. A customer purchased an item yesterday. I have auto-fulfillment enabled so when they ordered, the drop shipper was paid and the order was fulfilled. Which is as I expected.

However, I have not received the the money from the customer's payment for the order, and I paid for fulfillment out of my own pocket.

So my question is twofold:

1. When a customer makes a purchase via Shopify, where does that money go? I assumed it went into the Shopify balance but I can't find it anywhere. Or perhaps its on hold and I'm not seeing a notification?

2. Is there a way to have the customer's payment effectively pay for fulfilment? If not, I will need to set a limit on stock based on what I can afford to fulfill at that time so that might be a next step here.

Thank you!

[Pantry6838]

Potentially answering my own question, I see in the paper trail that the payment is added to August 28th's payout (which is tomorrow) so perhaps this is merely a weekend issue.

[Kimi]

Hi, @Pantry6838.

I see you seem to have potentially figured out your payout situation, but I thought I'd jump on this thread to offer further information nonetheless.

To answer your questions:

1. The money from customer payments would be processed by whichever payment gateway you've connected onto your store, and will then be sent through to your nominated account. If you're using Shopify Payments for example, customer payments will be sent through to your bank account as a payout.
   
   Each region would have their own payout periods, which is the time that our gateway takes to process and send your funds through to your bank account. On top of the payout period, your bank would also typically take another 24-72 hours to process the funds on their end. You can check out this document, and click on your specific region to view more information about your location's pay period.
   
   If eligible, you can also opt for your payouts to be sent through to your Shopify Balance account, which will allow for faster payout schedule time.
   
   
2. The general process for businesses is as stated above, that customer payments are processed by their store's payment provider, and then sent to their chosen bank account. Because of this process, typically businesses will need to firstly cover the costs for order fulfilment themselves until they receive the payout on their bank account. To make the process easier however, generally businesses would use the same bank account or card that they receive their payout in to also pay for their order fulfilment needs, which you can normally configure within your respective dropshipping app/website.
   
   Again, if you're eligible for Shopify Balance however, you can simply use your Balance card to help with managing the expenses of your order fulfilment by connecting your Balance card to your dropshipping app/website.

Hopefully that's shed a bit more light into the situation for you. To further help with your dropshipping strategies, I'll also leave some useful resources below filled with tips and tricks for you to go through:

• How to become a successful dropshipper
• Dropshipping tips to boost your business

[Pantry6838]

This solution is fine but I'd like to confirm first.

Since a business is expected to fulfill orders for customers before payment has cleared, what happens if a group of customers or a malicious customers purchases a ton of orders with expensive shipping, and cancels or returns the order? Wouldn't that tie all of the business money up since fulfillment happens before the payment clears? It seems impossible for an online storefront to protect themselves from this without Shopify credit..

[Kimi]

@Pantry6838 

That's a valid concern, for sure. While fraudulent transactions may occur, it's one of the risks associated with running a business in general, and is therefore something that the business owner will require to be aware of in order to take measures to mitigate such risks.

At the end of the day, Shopify is simply a platform that allows businesses to create and run their online store. So while we have some protections in place to help with fraudulent activities, ultimately there are risks that come with operating a business that a business owner is responsible for and will need to take care of themselves on their end. If you haven't already done so, it might also be worthwhile to consider obtaining a business insurance to cover potential losses due to fraudulent activities or otherwise.