Inventory balancing in Shopify Fulfillment Network
Inventory balancing refers to distributing your products across Shopify Fulfillment Network (SFN) fulfillment centers. When you send inventory to SFN, SFN personnel automatically distribute and store your products close to your customers to enable quick delivery. Inventory balancing enables you to display an accurate delivery promise to most US customers at checkout. The cost of inventory balancing is included in your monthly SFN bill.
SFN uses a forecasting model to determine the best way to distribute your inventory across SFN fulfillment centers. When you join SFN, you're assigned a fulfillment center hub where you send all your inventory. After SFN personnel process your inventory at the fulfillment center hub, your products are distributed across SFN's network of fulfillment centers on an ongoing basis.
Access SFN internal transfers
You can view the products being distributed to a location in your SFN app. The Incoming quantity of your item includes Internal transfers, which are inventory that's incoming to an SFN fulfillment center as part of inventory balancing.
- From your Shopify admin, click Apps > Shopify Fulfillment Network.
- In the Inventory overview section, click the down arrow
▾in the Distribution section for a location to view the list of distributed products.
- If you want to view the distributed quantity for a single inventory item, then click on an inventory item. The quantity being distributed is in the Internal transfers section.
- Optional: You can click All locations and select a location to filter the quantities for that location.
For information about where your inventory is stored, you can access the inventory states in your SFN app.
Considerations for inventory balancing
Your products are temporarily unavailable to sell while in transit between SFN fulfillment centers. To ensure that customer orders are fulfilled during this time, SFN automatically fulfills new orders using products that are stored in your fulfillment center hub.
Although there's no inventory minimum for using SFN, you need to send SFN enough inventory so that an appropriate amount can be distributed across all SFN fulfillment centers. This distribution across the network enables SFN to provide 2-day delivery to more of your customers. If a specific product's stock levels are too low to support fulfillment from multiple SFN fulfillment centers, then SFN stores the product in fewer locations and limits how often the product is redistributed.
Keeping track of these locations is important for tax implications on distributed inventory and where your store has nexus in the United States. Learn more about US Tax Liability.