Every e-commerce business wants to get more sales, putting all their efforts into product page optimisation. But they tend to forget that once people buy, it's the order processing, communication and experience that define repeat purchases.
Thus, no matter if you handle hundreds of orders a day or just a few, efficient and smooth order processing is key. It allows you to stay organised, build trust and grow your business consistently.
In this guide, you'll learn everything you need to know about Shopify order processing workflow. From basics and functionality to features and challenges, we'll help you leverage it to the fullest.
What Is Shopify Order Processing?
Shopify order processing is a sequence of steps from the customer placing an order to the moment it's delivered to their doorstep.
The journey starts when the customer completes the purchase on your store. Shopify automatically records the order details, confirms payment, and informs you that the order is ready for fulfilment.
After picking the right products, sorting them, carefully packing, and shipping, comes the final and most important stage — successful delivery that finalises the order processing cycle.
However, let's move step-by-step here.
Why Does Order Processing Matter?
An accurate and quick order processing ensures that your customers receive exactly what they ordered, on time. Correspondingly, every error, delay, or confusion harms your brand reputation.
But that's just the tip of the iceberg.
Without an efficient Shopify order management system, you end up with excess inventory, overstock, and spend more on labour because of inefficient order packing. What's worse, you lose money and alienate customers.
Luckily, Shopify offers automation tools, inventory management features, and third-party integration to prevent that.
Let's see how this would actually work and how you can optimise each process.
Shopify Order Processing Stages
To provide the best shopping experience, you need to know and quickly navigate all the stages of the Shopify order processing workflow.
It will help you to avoid errors, respond quickly, and optimise your operations.
1. Order placement
Shopify automatically creates a new order in your admin panel when a customer completes checkout. After capturing customers' details, product information, and verifying the payment, Shopify sends an order confirmation email to the customer.
Each email includes the order number, product overview, shipping and billing details. However, you can also add tracking links here so customers can keep track of the order processing stages directly.
Note: at this stage, you can also place orders on behalf of customers. Shopify follows the same steps for notifying them.
2. Picking items
After the order is placed, it's time to move to the next step — picking products. This is the first and, by far, the most important step in the Shopify order fulfilment process. Why?
It might seem like you just need to collect ordered products from the shelf. But in reality, a lot can go wrong at this very stage.
The product may be misplaced or have an incorrect label. Even worse, you can just accidentally mix up the order.
So, your task is to make the picking stage as straightforward as possible. Depending on the size of your warehouse and the volume of the orders, there are three picking strategies to use at this point.
Piece picking: a single order picking, when someone walks around a warehouse, collecting items for one order at a time. This approach is the most straightforward. It's best for small businesses with low order volumes.
The chances of packing the wrong products are very low here, and it doesn't take long to train new staff.
Batch picking: a picker collects products for multiple orders at once while moving around the warehouse, which is ideal for bigger warehouses.
This method reduces the picking time, but requires sorting items after they are collected. This is the point when you should be extra careful not to mix up the orders.
Zone picking: here, a warehouse is divided into different zones with an assigned picker who is responsible for a certain area. Each picker collects products only from their zone and passes the order to the next one until it's complete.
This approach is most suitable for large warehouses with a large variety of SKUs and big orders. It also requires a coordinator to link all zones and check whether the order is ready for packing and shipping.
3. Sorting
Once the products are picked, it's time to sort them between orders. Here you can also use some strategies to make the workflow easier.
Instead of handling orders one by one, you can group them by common characteristics.
Orders with the same products. If different customers have ordered the same products, quantities, or bundles, it's better to pick and sort such orders together.
e.g. if 10 orders contain the same T-shirt, you can pick all 10 from the shelf at once and sort them into separate orders afterwards.
This saves a lot of time, since you don't need to walk back and forth to get the same items.
Orders with similar packing requirements. Your products may vary in size, weight, and packaging requirements. So, it helps to group them to spend less time switching between packing materials and box sizes.
Orders with the same shipping method. If you offer different shipping methods, this sorting will simplify the labelling and lower the risk of misrouted packages.
However, don't implement these strategies separately. Combine them to minimise errors and speed up the entire sorting process.
4. Packing
At this stage, your responsibility is to double-check if the sorted products correspond to the right order.
The next step is to inspect the items to avoid sending something damaged, broken, or missing. If you notice any issues, the item should be changed before packing.
After the quality check, choose the right packing materials depending on the size, weight, and fragility of the items to secure the delivery.
Finally, include additional materials in the package (such as thank-you notes, return instructions, promo codes, or coupons), label it, and seal it.
Now, your package is ready to move.
5. Shipping and delivery
Depending on your resources, location, and shipping partnership, there are three main shipping options.
The first one is local delivery, for customers who live nearby. It allows you to drop off orders directly at the customer's place and make the delivery quickly.
The next option is to deliver the packages at local post offices or other carrier facilities. This one is very common for small and medium-sized businesses.
And the last one is when you schedule daily pickups with shipping carriers. It's especially useful if you're dealing with a large number of orders. In this case, you don't need to think about logistics. The carriers come to you.
Seems like you're finished, right? Actually, the delivery is not the final stage in the Shopify order processing.
6. Post-delivery support
Even though we do our best to avoid it, sometimes deliveries are delayed, and customers are not satisfied. In this case, clear communication and your quick response matter the most.
It's important to provide the best support you can to build a long-lasting relationship or at least avoid disasters.
And Shopify supports you here. It allows you to streamline returns, exchanges, or refunds using its built-in return merchandise authorisation (RMA) system or third-party apps.
Pro tip: you can log in to customer accounts in Shopify to provide fast and reliable assistance from there.
Shopify Order Fulfilment Strategies and Challenges
As we have already mentioned, order processing involves more administrative and preparatory tasks. It deals with payments, updates inventory, checks order details and status, manages returns documentation, and so on.
Order fulfilment, on the other hand, is more of a physical process, preparing and delivering the products to your customers.
Depending on the store type, shipping volumes, location, and your team capabilities, there are 6 different Shopify order fulfilment strategies.
In-house fulfillment
According to this strategy, storing inventory, picking items, packing, and shipping are managed by your team only. In this case, you have full control over all processes, may add branding and personalisation to the packaging.
It's best for small businesses with low order volumes. But be prepared that it involves labour and warehouse costs, which may be quite high.
Third-party fulfillment
A third-party fulfilment is ideal for those ready to scale their business or deal with high sales volumes.
What you do, in this case, is send inventory to the 3PL provider's warehouse, where they store, pack, and ship on your behalf. For that, you pay a fee per item picked and packed.
However, forget about custom packaging or final brand touches. Besides, what if a mistake occurs? Who is responsible? These are the things to consider beforehand.
Dropshipping
Here, you sell products without physically having them in stock. You just forward the order to your manufacturer, and they fulfil and ship it to your customer.
Very convenient, isn't it?
But wait. Shipping delays are common for this fulfilment model, and fast and reliable providers are quite difficult to find.
Moreover, you may end up with low profit margins since you have limited control over the product quality.
Distributed fulfillment
Distributed fulfilment, or multi-warehouse strategy, enables you to store inventory in several fulfilment centres spread among your customers' hubs.
In this case, orders are sent to the warehouse that is closest to your customer's location. Consequently, it allows you to provide the quickest delivery possible.
However, you need to develop sophisticated inventory and order management systems to keep accurate stock numbers and streamline Shopify order processing.
On top of that, think about the costs of maintaining all that. This model isn't relevant for every business.
Omnichannel fulfillment
If you want to provide great flexibility and convenience to your customers, use an omnichannel fulfilment strategy. It allows you to fulfil orders from different sources — regular store, online store, social media, etc.
It means your customer can order something online, but pick up or return the product to a physical store.
Despite complex inventory tracking, required technology integrations (POS, OMS, WMS), and high coordination costs, your brand will be associated with top-notch service.
Hybrid fulfillment
This is a mix of two or more fulfilment strategies which you pick to optimise costs, gain more control, and still scale your business.
e.g. if you sell heavy sports equipment and sportsware, you can combine an in-house fulfilment model for clothes with dropshipping for bulky equipment.
Things Affecting Order Processing in Shopify
While Shopify handles the order processing part, you do the fulfilment, but something still can get in the way. That's why it's important to keep a few factors in mind about the order processing in Shopify.
Products you sell
Indeed, the types of products you sell influence the entire Shopify order management system. Just imagine the difference in storing, packing, and shipping products like glassware, food, furniture, electronics, or flowers.
Each category brings about different challenges for your team. So, your task is to tailor the entire setup to your needs to ensure smooth operations at every stage.
Product size
Items like shoes, clothes, stationery, or cosmetics can be easily stored, packed, and shipped. In many cases, you just need to put them in boxes and print shipping labels.
However, think about products like furniture, large appliances, or construction materials. Managing those is very different, right? You need to have special equipment, a spacious warehouse, and a well-trained team to handle everything properly.
Also, if you sell large or heavy products, make sure to notify customers about your delivery and return policies. Sometimes people don't realise how costly it is for the company to deliver or take back bulky items.
Seasonality
If the demand for your products changes depending on the time of the year, you need to be prepared for every busy season.
You need to stock up in advance, hire more people to handle the volume of orders, or change the entire picking and sorting strategies.
Otherwise, you may end up with overwhelmed staff, stock shortages, delayed shipments, and what is worse — dissatisfied customers.
So, if you want to provide excellent service, consider these factors to tailor your workflow accordingly.
Operational costs
There is no doubt, your financial capacity directly affects how well you structure your order fulfilment process.
Managing store space, labour costs, software systems, packaging supplies, and shipping logistics requires a lot of resources.
Your task is to understand your business needs, develop your own strategy, and decide whether to invest in automation or third-party providers to cut spending.
Workflow efficiency
Shopify integration with different inventory and shipping tools automates a lot of aspects of the order fulfilment process.
Do not hesitate to reduce manual steps and minimise errors by implementing efficient warehouse management systems. This will not only save time but also improve the accuracy of the order processing in your store.
Tips to Improve Shopify Order Processing
Except for tools and third-party apps, there are some general best practices to improve your Shopify order management system. Let's take a look at the most effective ones:
- Check inventory: schedule regular inventory checks to verify that physical stock matches the inventory data in the system.
- Train your team: well-trained staff make fewer mistakes, forecast or notice errors, and fix them quickly.
- Double-check products before shipping: to prevent costly returns, make sure your team always checks the products before shipping.
- Choose shipping company wisely: reliability, weight capabilities, coverage area, and delivery speed are the main aspects to consider.
- Use demand forecasting: review sales analytics to spot seasonal trends and forecast future demand for your products.
- Automate where possible: speed up order processing by reducing the time your staff spend on repetitive tasks.
- Be transparent with customers: even if things go wrong, be honest with your customers and provide clear communication. Honesty builds trust.
- Manage returns smoothly: respond to return requests quickly and make sure your return policy is clear and easy to find.
As you may have noticed, Shopify order processing goes far beyond a simple order delivery. It's a comprehensive strategy with a system. It not only helps you manage inventory and coordinate the store processes, but also builds trust and loyalty with your customers.
However, sometimes even the best system in the world is not enough when something goes wrong. Especially when your customers have trouble placing an order, applying discounts, or completing the checkout.
But don't forget about security find a way to track admin users who logged in as customers to keep things transparent and avoid unauthorised activity.
FAQs
