What is the Shopify Fulfillment Network mentioned by Shopify at the fourth quarter 2021 earnings conference?

What is the Shopify Fulfillment Network? Shopify's goal with this new service is to help merchants offer some of the same efficient delivery services as Amazon.

Shopify President Harley Finkelstein said during the fourth-quarter 2021 earnings call that Shopify plans to significantly increase the number of company-owned warehouses by spending $1 billion over two years, starting in 2023. The ultimate goal of the Shopify Fulfillment Network (SFN) is to deliver packages from Shopify merchants to over 90% of the U.S. population within 2 days.

This development can undoubtedly effectively reduce the cost and time for merchants to process order delivery, and improve the competitiveness of Shopify merchants.

How does the Shopify Fulfillment Network (SFN) work in principle?

1. Merchant ships inventory in bulk to Shopify warehouses located across the country
2. Merchants sell through various Shopify channels (website, social media, etc.)
3. Shopify automatically picks inventory from the warehouse closest to the customer
4. Shopify will help deliver the order to the customer

Merchants can conduct simple inventory management through the backend of the online store, just go to see which Shopify warehouse needs to replenish which products. Of course, to achieve SFN, the technology that needs to be implemented is not easy. Therefore, in the recent news announcement, Shopify will also set aside a large amount of expenditure to develop the Shopify Fulfillment Network (SFN).

Temporarily, the Shopify Fulfillment Network is only piloted in the United States, but it is believed that as long as there are a certain number of Shopify merchants in other regions in the future, Shopify will expand its services to this region.