Choosing the Best Shopify 3PL for Your Store | Cahoot

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, 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 that 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.

Introduction

What is Third-Party Logistics (3PL)?

Third-party logistics (3PL) refers to the outsourcing of logistics and supply chain management to external service providers. These providers specialize in managing various aspects of the supply chain, including inventory management, order fulfillment, warehousing, and shipping. By partnering with a 3PL company, Shopify store owners can focus on core business activities while ensuring efficient and timely order delivery.

Benefits of Using a 3PL for Shopify

Using a 3PL company can bring numerous benefits to Shopify store owners, including:

• Improved customer satisfaction: By outsourcing logistics operations, businesses can ensure timely and accurate order delivery, leading to increased customer satisfaction.
• Reduced shipping costs: 3PL companies can negotiate better shipping rates with carriers, resulting in cost savings for businesses.
• Increased efficiency: 3PL companies can streamline logistics operations, reducing the time and resources required to manage inventory, fulfill orders, and handle shipping.
• Scalability: 3PL companies can help businesses scale quickly and efficiently without the need for significant investments in infrastructure and personnel.

Types of 3PL Companies

There are several types of 3PL companies, including:

• Full-service providers: These companies offer end-to-end solutions, managing all aspects of the supply chain, from freight forwarding to bulk inventory storage and management to shipping and reverse logistics.
• 3PL warehouses: These companies specialize in storing, shipping, and handling returns for businesses.
• Transportation-based 3PLs: These companies focus on transporting goods between locations, often using their own fleet of vehicles.
• Financial- and information-based 3PLs: These companies provide financial and information services, such as sales analyses and supply chain analytics.

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 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 a nationwide network of warehouses.

You’ll want to make sure your Shopify 3PL has at least 4 order fulfillment centers across the USA. Still, ideally, the best 3PL will have many more warehouses so 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 strategically placing inventory in 4+ locations 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. Today, 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.

Source: Shopify App Store Free Shipping Bar

2. User-Friendly Shipping Software

As a business owner, giving up control and outsourcing to other companies is tough. 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 your orders’ status, inventory levels, and shipping and order fulfillment costs, then you’re not working with a cutting-edge 3PL.

One key benefit of great 3PL shipping software is proactive notifications. Unfortunately, things go wrong all the time in the shipping logistics world. It can be as simple as an undeliverable address incorrectly input by the customer or as complex as a worldwide supply chain and shipping crisis. The best Shopify 3PLs don’t leave it up to you to identify order fulfillment problems. Their shipping software should alert you when a customer orders with an undeliverable address. You can immediately fix the issue before it turns into a late shipment, and you’ll keep the customer happy.

“I use Cahoot to process our shipping labels. Their auto label creation feature is a huge time saver. We are continuing to use Cahoot over our previous shipping label provider.”

~ Home and Garden Supply

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3. Achieve a 99% On-Time Order Fulfillment Rate

Reviews are the lifeblood of your ecommerce business, and a happy customer is a repeat customer. You can probably recall more than a few lost customers and poor reviews that were due to errors in the order fulfillment or shipping workflow that were not your fault.

The best Shopify 3PLs minimize these issues and have an on-time fulfillment rate of 99.9% or higher. Anything less signals a Shopify 3PL that isn’t built for the rigorous demands of modern ecommerce.

Top 3PLs designed for ecommerce order fulfillment 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.

4. Multi-Carrier Shipping Discounts and Carrier Flexibility

Shipping fees consume a significant chunk of every ecommerce merchant’s profits, but where there’s extra cost, there’s an opportunity to save. The best 3PLs who ship huge volumes of packages every year will negotiate preferred rates with major and regional parcel carriers, and they should pass those savings on to you.

Beware though. A trick in the 3PL industry is to consolidate pricing into a single one-line item and not itemize what you’re paying for every component of their service. While it can feel helpful to be quoted one simple price, keep in mind this enables the 3PL to charge you more for shipping than what they’re paying the carrier and keep the difference without you knowing.

The best Shopify 3PLs work with all shipping carriers, not just one. The reason why is simple. Different carriers have the best rates for different routes, package sizes, and types of products. If you’re locked into just one carrier, you’re not getting the best shipping prices.

5. Pre-built Ecommerce Integrations and Open APIs

It shouldn’t be hard to connect your Shopify store to your 3PL. The best 3PLs have pre-built integrations that will do it in a few clicks (this goes for other ecommerce platforms, too). Many merchants are scaling into multiple sales channels to maximize growth, and your 3PL should be able to integrate easily with all of them.

Not every ecommerce merchant can work with pre-built integrations, especially larger ecommerce merchants with custom and complex order and inventory management systems. For that, your Shopify 3PL choice should have an open API and support resources that make the order fulfillment integration process as seamless as possible.

6. Responsive Customer Service

Finally, the best Shopify 3PLs offer amazing customer support. You should be able to get in touch with your 3PL easily to troubleshoot challenges. Look for a Shopify 3PL that assigns a real person to work with your ecommerce account. Make sure there are multiple ways to get in touch with them. If it’s a small issue, live chat works. Complex challenges should be handled by an advanced ticketing system. And finally, request direct phone support for critical or time-sensitive order fulfillment issues.

“We switched to Cahoot from a different 3PL and the team has bent over backwards to make the transition easy and seamless. Great personal assistance every day from the team and very quick, reliable shipping from the Cahoot partner warehouse. Highly recommend their service.”

~ Cut.com

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Top Shopify 3PL Companies

Now that you know what to look for, how do a few of the top players in the 3PL industry stack up? We’ve provided a primer to help jump-start your order fulfillment research.

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels. Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels.

Shopify Fulfillment Network (Flexport)

Shopify Fulfillment Network (sold to and rebranded as Flexport in mid-2023 but still operating the Shopify Fulfillment Network app) is geared towards Shopify sellers. The pricing and shipping speed aren’t expected to be comparable to FBA as Shopify does not own any logistics infrastructure. This fulfillment option will work for you if you only need to fulfill orders in the United States, have fewer than 2,000 SKUs, ship more than 10 orders but less than 10,000 orders per day, and don’t sell any prohibited or regulated products.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

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 since they have a wider focus than just ecommerce.

Cahoot: Shopify’s Premier Fulfillment Network

Cahoot’s order fulfillment services network is built for ecommerce. We’ll help you level the playing field and delight your customers with a stellar, Amazon Prime-like delivery experience for your Shopify store. And we don’t stop there. We have pre-built ecommerce integrations with major marketplaces to fuel your multi-channel growth. Don’t see one that you need? Let’s talk.

Our innovative peer-to-peer model offers low-cost, fast, nationwide order fulfillment by design. As a result, our pricing is typically 30% lower than the 3PL providers listed above, and we can beat them on order fulfillment speed and delivery reliability.

Cahoot is committed to helping Shopify Sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

When is the best time to work with a 3PL?

The best time to work with a 3PL depends on your business’s specific needs and growth stage. It might be time to consider outsourcing fulfillment when you’re starting to run out of capacity. For example, if order volume consistently exceeds what you can handle efficiently in-house, or if your available storage space reaches or exceeds 75-90% of your capacity. Businesses that experience seasonal spikes in demand can benefit from a 3PL’s ability to seamlessly scale operations up or down as needed.

When logistics management becomes too time-consuming, or rising shipping costs are creating excessive margin pressure, outsourcing fulfillment allows you to focus on growing your business and improving your products while leveraging a 3PL’s carrier network and negotiated rates.

If you’re struggling to meet your on-time delivery promises or you’re dealing with frequent fulfillment errors and the customer service burden has gotten to be too much, it would be worth looking into a 3PL’s expertise and infrastructure; in particular, look into 3PLs that can support nationwide inventory distribution to reduce shipping times and costs.

Merchants looking to get smarter and more efficient with inventory forecasting so they can procure the right amount of inventory at the right time should partner with 3PLs that offer AI-driven intelligent demand planning software. Agentic AI is able to analyze fluctuations in market demand, freight forwarding trends, trade and policy current events, etc., and automatically create purchase orders with your suppliers (in their language), optimizing the amount of capital tied up in inventory.

If you’d like to find out how Cahoot can enhance your efficiency, reduce your costs, and support the growth of your ecommerce business, please get in touch with us. We can’t wait to show you how Shopify order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in a 3PL that can help you with fulfillment, check out some of our other articles:

• How to Choose the Best 3PL for Wayfair
• How to Choose the Best 3PL for Your Macy’s Orders
• How to Choose the Best 3PL for Target Plus
• How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Frequently Asked Questions

Can Amazon fulfill Shopify orders?

Yes, Amazon can fulfill Shopify orders using the Multi-Channel Fulfillment (MCF) service. MCF integrates a Shopify website with Amazon’s fulfillment network to pick, pack, and ship orders using the Fulfilled by Amazon (FBA) infrastructure and resources.

Does Shopify offer fulfillment?

Yes, Shopify owned and operated the Shopify Fulfillment Network (SFN, formerly known as Deliverr), before it was sold to Flexport in mid-2023. Shopify promotes Flexport as its trusted fulfillment partner.

How much does Shopify fulfillment cost?

Enter your product information into the Flexport Cost Calculator to see what you would pay with Flexport Fulfillment.

What does order fulfilled mean on Shopify?

When you fulfill an order in Shopify, you begin the process of sending the order on its way to the customer. The customer receives an email telling them that their item has shipped, and the order’s Fulfillment Status displays as Fulfilled on the Orders page.

What is fulfillment on Shopify?

Shopify Fulfillment Network connects your online store with Flexport, a leading logistics partner that will pack, pick, and ship online orders to your customers without any intervention.

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