Order Routing Logic in Shopify

Introduction

In the competitive landscape of B2B e-commerce, efficiency and customer satisfaction are paramount. For manufacturers and distributors using Shopify, one of the most powerful yet often underutilized features is order routing logic. Properly configured, it can revolutionize your fulfillment process, whether you're managing your own warehouses or partnering with third-party logistics (3PL) providers. This article will delve into the what, why, and how of implementing a sophisticated order routing strategy on your Shopify store, tailored specifically for the needs of a B2B executive.

When and Why Your B2B Business Needs Smart Order Routing

As your business grows, so does the complexity of your fulfillment operations. You might be grappling with multiple warehouses, a mix of in-house and outsourced fulfillment, or the need to cater to specific customer requirements. If you're experiencing any of the following, it's a clear sign that you need to implement intelligent order routing:

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• High shipping costs and long delivery times: Are you frequently shipping orders from a location far from your customer, incurring unnecessary costs and delaying delivery?
• Inventory imbalances: Do you have excess stock of a product in one warehouse while another location is facing a stockout?
• Complex B2B fulfillment needs: Your business customers may have unique requirements, such as needing orders fulfilled from specific locations or requiring consolidated shipments for their various branches.
• Operational inefficiencies: Are your teams spending too much time manually deciding which location should fulfill an order?

By implementing order routing logic, you can address these challenges head-on. The primary benefits for a B2B operation include:

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• Reduced Shipping Costs: By automatically selecting the fulfillment center closest to the customer, you can significantly lower shipping expenses.
• Faster Delivery Times: Shorter shipping distances mean quicker deliveries, leading to increased customer satisfaction and loyalty.
• Optimized Inventory Management: Ensure you are utilizing your inventory across all locations effectively, preventing stockouts and overstocking situations.
• Increased Operational Efficiency: Automating the decision-making process frees up your team to focus on other critical tasks.
• Enhanced Customer Experience: Meeting your B2B customers' specific fulfillment requirements demonstrates a high level of service and strengthens your business relationships.

A B2B User Journey with Advanced Order Routing

To illustrate the impact of this feature, let's consider the user journey of a procurement manager for a national construction company placing an order on a manufacturer's Shopify store.

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The Scenario: The procurement manager needs to order a large quantity of specialized safety equipment for two different construction sites: one in California and one in New York. The manufacturer has fulfillment centers in both Los Angeles, CA, and Newark, NJ, as well as a central distribution center in Chicago, IL.

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The User Journey:

1. Placing the Order: The procurement manager logs into their B2B account on the manufacturer's Shopify store. They have access to a customized catalog with pre-negotiated pricing. They add the required safety equipment for both the California and New York sites to their cart and proceed to checkout.
2. Smart Order Routing in Action: Behind the scenes, the Shopify store's order routing logic kicks in. It analyzes the shipping addresses for each line item in the order.
   • The items destined for the California site are automatically routed to the Los Angeles fulfillment center.
   • The items for the New York site are routed to the Newark fulfillment center.
3. Seamless Fulfillment: The order is split and sent to the respective fulfillment centers without any manual intervention. The teams at each location receive their picking lists and begin preparing the shipments.
4. Timely Delivery and Communication: Both construction sites receive their equipment promptly because the orders were shipped from the closest possible locations. The procurement manager receives timely and accurate shipping notifications for both shipments, allowing them to track the progress of each delivery.

In this example, the manufacturer has not only reduced their shipping costs and delivery times but has also provided a seamless and efficient experience for their B2B customer. This level of sophistication can be a significant competitive advantage.

How to Implement Order Routing in Shopify

The good news is that Shopify provides the tools to implement order routing logic. The level of sophistication you can achieve will depend on your Shopify plan.

For All Shopify Plans (Including Basic, Shopify, and Advanced)

All Shopify plans allow for basic order routing based on location priority. You can have multiple inventory locations (your own warehouses, 3PLs, etc.) and set a priority for which location should fulfill orders first.

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To set this up:

1. From your Shopify admin, go to Settings > Locations. Here you can add and manage all your fulfillment locations.
2. Next, navigate to Settings > Shipping and delivery. In the "Order routing" section, you can drag and drop your locations to set the fulfillment priority.

This is a simple "waterfall" model. Shopify will try to fulfill the entire order from the highest-priority location. If that's not possible, it will move to the next location in the list.

For Shopify Plus: Advanced Order Routing Rules

For B2B companies with more complex needs, Shopify Plus offers significantly more advanced and flexible order routing capabilities. With Shopify Plus, you can create custom routing rules based on a variety of factors. This is where you can truly optimize your fulfillment strategy.

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Key Shopify Plus Order Routing Features:

• Location-Based Routing: Route orders to the nearest fulfillment center to the customer's shipping address. This is a game-changer for reducing shipping costs and times.
• Inventory-Based Routing: Ensure orders are sent to locations that have the necessary stock to fulfill the entire order, minimizing split shipments.
• Routing by Shipping Zone: You can create specific routing rules for different shipping zones. For example, all orders to the West Coast are routed to your California warehouse.
• Rule-Based Logic: You can combine different rules to create a sophisticated routing strategy. For instance, you could prioritize the closest location, but only if it has all the items in stock.

Implementing Advanced Routing on Shopify Plus:

1. Define Your Logic: Before you start configuring, map out your ideal order routing strategy. Consider your fulfillment network, shipping costs, and customer locations.
2. Configure in Shopify Admin: In your Shopify Plus admin, under Settings > Shipping and delivery > Order routing, you'll find more advanced options to create and manage your routing rules.
3. Utilize Shopify Apps: The Shopify App Store has a range of powerful apps that can further enhance your order routing capabilities. These apps can provide more granular control and integrate with your other business systems like an ERP or WMS. Popular options often focus on inventory and order management automation.
4. Custom Development with Shopify Functions: For truly unique and complex requirements, Shopify Plus allows for custom development using Shopify Functions. This gives you the ultimate flexibility to build any order routing logic your business needs. You'll likely need to work with a Shopify Plus agency or developer for this level of customization.

Integrating with Third-Party Logistics (3PLs)

Many B2B companies choose to outsource some or all of their fulfillment to 3PLs. Shopify integrates seamlessly with a wide range of 3PL providers.

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How it works:

1. Connect Your 3PL: Most major 3PLs have a Shopify app that makes integration straightforward. Once connected, your 3PL's warehouse will appear as a location in your Shopify admin.
2. Route Orders to Your 3PL: You can then include your 3PL's location in your order routing rules just like any of your own fulfillment centers. This allows you to, for example, route all orders for a specific region to your 3PL partner while handling other regions in-house.

Conclusion: Gaining a Competitive Edge with Smart Fulfillment

For B2B manufacturers and distributors, the conversation is no longer just about having an online store; it's about creating an efficient, scalable, and customer-centric e-commerce operation. Implementing intelligent order routing logic in your Shopify store is a critical step in achieving this.

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By strategically directing orders to the optimal fulfillment location, you can significantly reduce costs, speed up deliveries, and improve your overall customer experience. While all Shopify plans offer basic capabilities, Shopify Plus provides the advanced tools necessary for B2B businesses to build a truly sophisticated and automated fulfillment network.

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Don't let outdated and inefficient fulfillment processes hold your business back. Explore the power of order routing in Shopify and turn your logistics into a key competitive advantage.