Fulfillment Compared: Amazon, Walmart, Shopify

Ecommerce operators tired of picking, packing, and posting parcels can turn to massive marketplaces and the leading ecommerce platform for help.

For years, Fulfillment by Amazon, Walmart Fulfillment Services, and the Shopify Fulfillment Network have helped sellers store inventory, ship orders, and even manage returns.

The services share a common purpose of providing ecommerce order fulfillment but differ in structure, at least a little. Understanding those differences starts with a closer look at how each network works.

FBA, SFN, and WFS aim to make ecommerce fulfillment fast and easy.

Fulfillment by Amazon

Launched in 2006, FBA is the most recognized third-party fulfillment option on this list owing to its close association with the company’s marketplace.

FBA’s most important feature may be exposure. Items sold on the Amazon Marketplace and fulfilled through FBA display the Prime badge on Amazon.com. The badge is important because about 75% of U.S. Amazon shoppers are Prime members and likely filter for Prime-eligible products.

Using FBA begins in Seller Central. Merchants prep inventory to Amazon’s specifications and ship it to designated warehouses. Amazon distributes stock across its network and automatically routes orders.

When customers make a purchase, Amazon employees pick, pack, and ship the order, which is often delivered within one to two days. Amazon also processes returns, with refunds issued directly to the customer.

FBA also offers Multi-Channel Fulfillment (MCF), which allows retailers to sell on platforms such as eBay or their own webstores and have FBA deliver the orders for a fee.

When combined with the “Pay with Prime” checkout service, MCF shipments enjoy the same ultra-fast deliveries.

Walmart Fulfillment Services

Walmart launched its FBA competitor, Walmart Fulfillment Services, in 2020 at the height of Covid. The timing was coincidental as the retail giant had planned the start, but the pandemic-induced ecommerce surge that followed might have helped get things rolling.

Functionally, WFS operates similarly to FBA. Sellers apply through Walmart’s Seller Center. Once approved, those merchants send inventory to WFS warehouses. Walmart’s system routes orders automatically.

There is even a “Fulfilled by Walmart” badge with a two-day delivery promise for Walmart Marketplace items.

Two WFS differences stand out relative to FBA: returns and price. Orders placed on the Walmart Marketplace and fulfilled with WFS are returnable to nearly any of Walmart’s physical locations, offering a level of customer convenience.

And WFS claims to be approximately 15% less expensive than FBA despite having a higher base rate, the apparent difference coming from additional fees for setup, storage, size, and similar.

Walmart claims that WFS is about 15% cheaper than other marketplace fulfillment services.

WFS is primarily for Walmart Marketplace sellers, but in September 2024, WFS began its own multichannel fulfillment service similar to Amazon’s MCF. Thus sellers can use WFS in combination with an internet store or other ecommerce channels.

Shopify Fulfillment Network

Essentially an app, Shopify Fulfillment Network makes it relatively easy for merchants to process Shopify orders through third-party fulfillment services.

Sellers enable the SFN app in Shopify’s admin, connect catalogs, and send inventory to partner warehouses. Orders from Shopify and other connected channels flow into the system, which routes shipments to the closest node. Fulfillment partners store inventory and manage returns.

Perhaps the key difference between SFN and FBA or WFS is control. A Shopify store owns its own brand and customer relationships.

In contrast, FBA and WFS customers may have purchased directly from Amazon or Walmart, and they will most certainly recognize the brands’ packaging when the orders arrive.

SFN has an eventful history. Shopify launched the service in 2019 with a $1 billion investment. In 2022, it acquired Deliverr for $2 billion, only to eventually sell it to Flexport, which became the default in-app service.

Since the sale, Shopify sellers using SFN can work with several leading fulfillment providers, including ShipBob, Shipfusion, ShipMonk, DHL Fulfillment, and Amazon MCF.

Merchants can utilize custom packaging with the SFN, manage multiple channels from a single dashboard, and display Shopify’s Shop Promise badge with two- to three-day deliveries.

3 Models

FBA, WFS, and SFN all offer comprehensive ecommerce fulfillment, and in at least a few ways are interchangeable.

• FBA is marketplace-driven, built around Prime and speed, and works well for multichannel sellers. If a shop sells on the Amazon Marketplace, FBA is seemingly mandatory.

• WFS leverages its retail network, with the advantage of in-store returns.

• SFN is platform-driven, giving independent brands control over customer experience and multichannel inventory.

The services are not mutually exclusive. A single store can utilize FBA and WFS for its respective marketplace channels, while employing SFN for orders via Shopify and its TikTok shop.

The takeaway? There are many excellent options for ecommerce order fulfillment.

USPS Rate Change Analysis July 2025

The United States Postal Service released new postage and shipping rates this month, increasing costs for popular services such as Priority Mail by up to 51%.

The USPS announced the increases in April 2025 to help achieve financial stability, meet regulatory requirements, and cover the transportation cost of packages.

New USPS rates help achieve financial stability.

Rate Changes

The average increase for Priority Mail is 6.3%, but shipping software maker Pirate Ship noted that for some Zone 4-6 shipments, the increase was much higher, i.e., 51%.

The cost of USPS Flat Rate boxes rose by 3%, 11%, and 7% for the small, medium, and large options, respectively.

Ground Advantage rates climbed an average of 7.1%. A new $4 fee on non-standard packages, such as mailing tubes, could add up quickly for businesses selling posters, rods, or other rolled products.

The USPS also lowered some rates. According to Pirate Ship, small 2-3 pound Priority Mail shipments to Zones 1-4 are now about 6.5% less expensive.

Similarly, prices for Priority Mail Cubic shipments within the same zone dropped 10%. And Media Mail rates dropped slightly, by about 2%.

Some additional services, such as insurance, also experienced price decreases.

Thus for small and midsize ecommerce businesses, the rate changes are uneven. Some shipments increased just a few cents. Others, depending on weight and zone, jumped by 30% or more. Still others decreased.

The result is a potential reshuffling of fulfillment costs, product margins, and, perhaps, carrier selections.

Shipping Review

The USPS transports more than 7 billion packages annually — more than UPS and FedEx. The rate changes present an opportunity for sellers to audit shipping and fulfillment practices.

A good first step is to export and analyze past orders. Download the last three months of shipping data and prompt a generative AI platform to organize it by type and zone, for example. The aim is to create a profile that estimates a merchant’s shipping services and regions.

The review should be recurring, as the USPS now adjusts rates every January and July.

Trimming just 25¢ off a per-order shipping cost could have the same bottom-line impact as increasing average order value or decreasing customer acquisition costs.

Once it knows its shipping profile, an ecommerce business can apply the new USPS rates and estimate the cost. The process is as simple as duplicating the existing rate sheet and updating the numbers for a reusable shipping cost model.

Profit Impact

Armed with new costs, sellers can calculate the impact on profit.

For shops that offer free or flat-rate shipping, recalculating profits will be straightforward.

Sellers that pass shipping costs to customers should estimate how the changes could affect conversion rates. And don’t forget to include the cost of return shipping.

Ultimately, merchants can increase prices, adjust free shipping offers or thresholds, create product bundles, or change carriers or service levels for specific shipments.

Third-party tools can help with the analysis. Examples include Pitney Bowes’ PitneyShip software, Pirate Ship, ShipStation, and EasyPost.

Compare policies and packaging, too. Do the new USPS rates, for example, impact dimensional weight enough that it makes sense to adjust box sizes?

USPS Value

Despite the rate changes, the USPS is often the most cost-effective option for ecommerce shippers, especially those with limited volume.

The USPS is vital for last-mile delivery. The UPS and FedEx rely on it, for example.

The USPS is the only option for serving some rural or military customers.

In short, recurring USPS price changes can be frustrating, but they are essential for the future of U.S. ecommerce. The agency loses billions of dollars annually and could cease to exist if it cannot recoup the shortfalls.

Charts: Global Ecommerce Trends Q1 2025

In February and March 2025, DHL queried 24,000 consumers across 24 countries as to their online shopping habits and preferences. The survey, consisting of 70 questions, required respondents to have made at least one online purchase in the previous three months.

DHL published the results last week in the 78-page “2025 E-Commerce Trends Report,” its fourth such annual study.

Most respondents shop far more than once every three months. Fifty-eight percent browse for goods and services online at least twice weekly.

–

Per the DHL study, 91% of respondents now use their smartphones to shop, utilizing not only mobile browsers but also retailer apps and voice commands.

–

Expensive and slow delivery are respondents’ top two online shopping frustrations, followed by weak product descriptions, returns expense, and insufficient product photos.

–

When asked about their top improvements to online shopping, respondents cited free and fast delivery, free returns, and better product details.

Teamsters Target Amazon Delivery Drivers

They drive large trucks emblazoned with “Amazon” and wear Amazon uniforms. But are they Amazon employees?

That’s the question central to a dispute over the International Brotherhood of Teamsters’ attempts to organize the drivers who deliver Amazon packages in California, Illinois, and New York.

Last year, 84 Amazon delivery drivers from Palmdale, California, became the first U.S. group to join the Teamsters. Since then, drivers in Skokie, Illinois, the New York City borough of Queens, and Victorville, California, have done the same.

But here’s the thing: Amazon doesn’t sign the drivers’ paychecks. They work for Amazon’s massive Delivery Service Partner (DSP) network. The DSPs are independent companies started under an Amazon program that allows aspiring business owners to set up shop for as little as $10,000. The DSPs employ drivers who operate the DSPs’ trucks, which are generally leased through third-party companies Amazon approves.

Because of that, Amazon says DSP drivers are not its employees. The union alleges that Amazon is a co-employer of the drivers and accuses the ecommerce behemoth of using its DSP program to dodge responsibility. So far, regional National Labor Relations Board officials have sided with the Teamsters. NLRB’s Region 31 issued a complaint against Amazon dated September 30.

However, the situation is far from settled, as the issue remains pending through the NLRB process and the courts. An NLRB administrative law judge set a hearing on the regional complaint for March 25, 2025.

Most Amazon delivery drivers work for independent companies within its Delivery Service Partner network.

Bad for Amazon Sellers?

Should the union be victorious, Amazon would almost certainly pass along increased costs by raising fees it charges platform sellers, says Phil Masiello, CEO of CrunchGrowth Revenue Acceleration Agency and a longtime Amazon seller and founder of multiple ecommerce companies. But, he added, Amazon won’t easily give in.

“The long and short of it is you can look at what happened in New York and other areas. Amazon will absolutely fight it,” Masiello says.

Teamsters Position

A Teamsters spokesperson did not respond to requests for comment. However, in news releases, the union accuses Amazon of using the DSP structure to evade its obligations while “exercising total control over the wages, workplace conditions, and safety standards of the drivers.”

In a release issued on October 2, Sean M. O’Brien, Teamsters general president, said the NLRB complaint “brings us one step closer to getting Amazon workers the pay, working conditions, and contracts they deserve. Amazon has no choice but to meet us at the negotiating table.”

The union and its allies have applied political pressure on Amazon.

On October 18, 133 U.S. House of Representatives members, led by the Congressional Labor Caucus, issued a letter asking Amazon CEO Andy Jassy to provide information about “unlawful violations of the National Labor Relations Act.”

“We are deeply troubled by ongoing reports that Amazon may be unlawfully coercing, intimidating, and retaliating against workers involved in union organizing activity,” the letter said.

The letter then asks Jassy to respond to six questions related to union organizing efforts by direct Amazon workers and those employed by DSP operators.

What Amazon Says

In an email to Practical Ecommerce, Amazon spokesperson Eileen Hards said the NLRB complaint “makes clear that the Teamsters have been misrepresenting the facts here for over 15 months, which is why the NLRB has not included most of their larger allegations.”

“As we’ve said all along, there is no merit to any of their claims. We look forward to showing that, as the legal process continues, and expect the few remaining allegations will be dismissed as well,” Hards said, adding that Amazon is not inherently opposed to unionization.

“Our employees have the choice of whether or not to join a union. They always have,” she said in the email. “We favor opportunities for each person to be respected and valued as an individual and to have their unique voice heard by working directly with our team. The fact is, Amazon already offers what many unions are requesting: competitive pay, health benefits on day one, and opportunities for career growth. We look forward to working directly with our team to continue making Amazon a great place to work.”

Amazon says its DSP network consists of 4,400 business owners who employ 390,000 drivers and generate a combined $58 billion in revenue — roughly the same as Delta Airlines’ fiscal 2023 operating revenue.

Amazon’s turbulent relationship with the Teamsters goes beyond organizing efforts by DSP drivers. In 2022, Amazon workers at the JFK8 Fulfillment Center on Staten Island, New York, formed the Amazon Labor Union (ALU). The ALU affiliated with the Teamsters earlier this year, becoming the ALU-IBT.

Founded in 1903, the Teamsters represent 1.3 million people in the U.S., Canada, and Puerto Rico.

Update on Drone Deliveries in 2024

2024 is the year of ecommerce drone deliveries. The recent expansion of pilot programs from drone operators partnering with established brands and retailers, as a result of Congress and the U.S. Federal Aviation Administration action, is making scaled-up drone deliveries a reality in the U.S. Internationally, drone deliveries are doing even better.

Here is a list of recent developments on drone deliveries in 2024. Regulatory approvals and legislative support ensure that drone operators and commercial users will continue to expand operations.

FAA Expands UTM, BVLOS

Federal Aviation Administration, commercial drone delivery.

For the first time in the U.S., the Federal Aviation Authority has authorized multiple operators — Zipline and Wing — to fly commercial drones without visual observers in the same airspace. The two companies can now deliver packages simultaneously while keeping their drones separated using Unmanned Aircraft Systems Traffic Management (UTM) technology. UTM enables third-party management of airspace with FAA oversight. Through UTM, companies can share data and planned flight routes with other authorized airspace users.

The FAA expects initial UTM flights in the Dallas, Texas, region to begin in August, with more authorizations in that area shortly. The companies began testing the UTM system with beyond visual line of sight (BVLOS) flights in the Dallas area in 2023, with simulations. All flights occur below 400 feet altitude and away from any crewed aircraft.

–

FAA Reauthorization Bill

U.S. Senate reauthorization bill.

In May, President Biden signed the FAA Reauthorization Bill, following overwhelming bipartisan support in Congress. The bill directs the FAA to establish a pathway beyond the visual line of sight and create two additional test sites for companies using unmanned aircraft for package delivery or other operations. It also gives the FAA enforcement authority to prohibit the unauthorized or unsafe use of Unmanned Aircraft Systems.

The bill also continues the BEYOND program, launched in 2020, for five years. The program focuses on working toward operating under established rules rather than waivers, collecting data to develop performance-based standards, collecting and addressing community feedback, understanding the potential and realized societal, economic, and community benefits of drone use, and streamlining the approval processes for drone integration.

–

Walmart’s Drone Delivery Integrations

Walmart app: drone delivery integration

Walmart is expanding drone delivery to the ordering experience on its app. Walmart is notifying eligible customers in Dallas-Fort Worth of the new drone-delivery option based on the address associated with their account. The company is completing the integration in phases as more drone delivery sites launch and drone providers receive additional regulatory approvals to fly more goods across greater distances.

Earlier this year, Walmart announced the largest drone delivery expansion of any U.S. retailer, including stores across more than 30 towns and municipalities in the Dallas area. The expansion makes drone delivery a reality for up to 1.8 million additional households, 75% of the Dallas-Fort Worth population. The deliveries are powered by on-demand drone delivery providers Wing and Zipline.

–

Amazon Prime Air: FAA Expansion

Amazon Prime Air

The FAA has granted Amazon Prime Air additional permissions that allow it to operate drones beyond visual line of sight, enabling it to serve more customers via drone and effectively expand and scale its drone delivery operations. This new authorization and permissions allow Amazon to expand its delivery area in College Station, Texas. It will scale its operations in College Station with its MK-27 drone to reach customers in more densely populated areas. Later this year, drone deliveries will begin integrating into Amazon’s delivery network, deployed from facilities next to its Same-Day Delivery sites.

Amazon is also adding drone deliveries to the Phoenix, Arizona, metro area, deploying drones from facilities next to its Same-Day Delivery site in Tolleson. Additionally, Amazon is expanding drone deliveries to Italy and the U.K.

–

Wing and DoorDash

Wing and DoorDash – Drone Delivery Pilot

Wing has recently expanded service to Melbourne, Australia, with DoorDash after more than five years of commercial delivery experience in that country and updated regulatory approvals from the national government. The changes allow a single pilot to oversee up to 50 drones in the air concurrently, an increase of over three times. According to Wing, the approved delivery covering Melbourne is its largest in Australia to date, giving over 250,000 Melbourne-area residents access to drone delivery via the DoorDash app. Wing and DoorDash launched the drone delivery pilot program in Australia in 2022.

In March 2024, DoorDash and Wing launched their drone delivery partnership in the U.S., starting in Christiansburg, Virginia. Wendy’s was the first restaurant partner, with orders prepared and packaged at the Wendy’s location and delivered via a Wing drone, typically in 30 minutes or less. According to the companies, the pilot will explore other cities in the U.S. later in the year.

In January 2024, Wing added a new drone to its aircraft library, capable of carrying a standard cardboard delivery box with a payload of up to five pounds (twice the weight of its standard drone). It has the same round-trip range of 12 miles and can cruise approximately 65 miles per hour.

Robots Are Coming to Ecommerce SMBs

Small to midsize ecommerce companies often struggle with order fulfillment. Given the costs of running a warehouse and fulfillment center, many SMBs outsource those tasks, but that could change as robots become viable for even smaller companies.

Warehouse Automation

Warehouse automation has existed for years and continues to expand. According to a February 2024 Gartner report titled “Avoid These Pitfalls in Large-Scale Warehouse Automations,” the industry will generate about $21.8 billion in worldwide revenue in 2024 and reach an estimated $71.0 billion by 2032.

Much of the industry’s revenue and growth comes from large retailers and logistics businesses. This focus on huge companies has generally put warehouse automation out of reach for SMBs for at least two reasons.

First, warehouse systems — particularly robotic ones — are too large and complex for non-enterprise companies. A business that doesn’t completely understand the nuance of pick-and-pack software, technology infrastructure, robots, and services can easily waste truckloads of money on systems that prove inadequate or overblown.

Second, an automated, robotic pick-and-pack warehouse solution is expensive. Think millions or tens of millions of dollars. Investing in the automation doesn’t make sense until a business has scale and volume.

Hence ecommerce SMBs typically run small, manual shipping operations or scale with the help of a fulfillment service and its warehouse automation and shipping facilities. The fulfillment vendor invests in the technology, and its many customers benefit.

The choice boils down to a business calculation: pay the fulfillment service or incur the cost of doing it in-house.

Affordable Robots?

There could soon be another option for SMBs — or at least mid-sized merchants.

Warehouse automation companies such as BionicHive, Dexterity Inc., Prime Robotics, and Pio have started to aim products and services at ecommerce SMBs in an apparent effort to reach emerging sellers.

For example, BionicHive makes a two-foot-wide, 100-pound robot that runs through aisles and along existing warehouse shelves, picking orders unaided. The robot, called sqUID, is suitable for large and, potentially, mid-sized merchants.

The sqUID is primarily a tool for large warehouses and, potentially, mid-market sellers.

Meanwhile, Pio’s P100 cube — “essentially a high-speed vending machine” that stores and picks products efficiently — starts at $101,999 as of May 2024 for a 14-foot, 620-bin setup with two picking robots plus a $2,997 monthly fee. Upgrade to three robots, and the monthly subscription is $3,996.

Each of the Pio robots can pick about 120 items per hour. The system is “plug-and-play,” meaning merchants don’t need a separate warehouse management system. It will work alongside existing manual fulfillment operations, occupying as little as 500 square feet.

As seen in this rendering, the Pio P100 is a compact cube filled with storage bins, each capable of holding, for example, about 120 t-shirts.

Potential Benefit

The warehouse automation industry remains focused on massive companies, but the nascent trend toward ecommerce SMBs could offer growing brands more fulfillment options.

The question will be whether small-scale warehouse automation systems and robotics save ecommerce companies money and otherwise offer a competitive advantage.

Pio, which is based on large-scale warehouse technology from AutoStore, had five cube-and-robot installations at the time of writing: Privada Cigar Club, Sunday Swagger (apparel), Souko (fulfillment), Barnes 4WD (auto parts), and AI Stone (apparel).

The performance of these brands could foretell ecommerce fulfillment in general.

Can Retailer Co-ops Cut Ecommerce Shipping Costs?

Retailer cooperatives have long helped smaller, independent stores purchase in volume. These loose confederations could also be an answer for ecommerce shipping and returns.

The idea is simple: A group of retail businesses pool their money to buy in bulk. 

Cooperatives have helped small retailers boost buying power. Could the concept work for ecommerce shipping?

A hardware store in Boise, Idaho, wanting to stock DeWalt tools might not have enough buying power to get the best prices. But if it cooperated with 50 independent hardware shops nationwide, suddenly the group would have the collective resources to be taken seriously.

That’s a retailer cooperative in action.

Shipping at Scale

Turn your attention to shipping and returns. There are at least three ways that scale — the size of a business — can impact ecommerce shipping.

Fulfillment centers

Walmart, the retail giant, earned about 17% of its revenue from ecommerce in 2023. The company had 34 ecommerce fulfillment centers and 100 ecommerce distribution facilities in the United States at the beginning of 2023. 

These facilities expedite delivery by placing items close to customers — a dual advantage over an SMB retailer shipping from a single location. Walmart can deliver an identical item more quickly since it has less distance to travel, and the shipping cost should be lower for the same reason.

Physical locations

Physical locations allow shoppers to pick up orders and drop off returns. Walmart can aggregate those items and reduce reverse shipping costs. 

Carriers

The third advantage is an in-house delivery operation. Consider Amazon Logistics. In 2023, it carried 5.9 billion parcels, according to a Pitney Bowes report. UPS hauled some 4.6 billion parcels, and FedEx carried 3.9 billion. Only the United States Postal Service delivered more domestic parcels than Amazon Logistics.

Without its logistics division, Amazon would have to pay and rely on USPS, UPS, or FedEx. And Amazon is not the only ecommerce business with some form of delivery.

Cooperation

I know few, if any, ecommerce SMBs that have considered a cooperative to compete on shipping. Perhaps this article will get them thinking.

Store locations

Retailers can ship for each other. Imagine you own a hardware store in Boise, Idaho. You belong to a retailer cooperative with another shop in Michigan. You both stock and sell the DeWalt DW46RN roofing nailer. Both stores have the nailer listed on their websites.

The Michigan shop receives an order for the DW46RN from a customer in Nampa, Idaho. A ground shipment via UPS would take at least four days. Your Boise shop could deliver the nailer in one day — and for much less money.

Effectively, a retailer cooperative of 50 shops would resemble 50 strategically located ecommerce fulfillment centers.

The concept could extend to dropping off returns, too. If the same customer needed to return the nailer, he could drop it off in Boise, saving shipping costs.

Carrier options

Cooperating stores could take advantage of alternative carriers. According to the Pitney Bowes report, “other” carriers grew 28.5 percent in 2023, handling more than 600 million parcels collectively. Many of these “others” are regional package carriers and ride-share services that can deliver quickly.

The roofing nailer could arrive at its buyer in an hour if the Michigan shop and its Boise partner worked together, likely involving joint systems.

Worth Exploring

Retailer cooperatives (different from retail, no “er,” cooperatives, which are groups of consumers) give independent stores or chains more collective buying power. 

Could retailer cooperatives apply to other parts of a business, such as ecommerce fulfillment? It’s worth exploring, particularly by those competing with enterprise brands.

Charts: Shipping Priorities of Online Consumers

Shipping impacts consumers’ online purchasing decisions and overall satisfaction with the buying experience. Shoppers prioritize free delivery as the most important shipping factor, according to Statista’s September 2023 survey of 6,000 U.S. consumers.

The Statista survey also queried shipping preferences by gender. Female respondents were more likely to value free shipping (92%) than male respondents (85%). Similarly, 71% of female users prioritize easy return shipping versus 57% of males.

–

According to “Adapting to Inflation: Consumer Outlook on E-commerce,” Ryder’s September 2023 survey of 1,077 U.S. online shoppers, young shoppers are more willing to wait for online orders.

–

Moreover, among respondents to the Ryder survey, free shipping was the top factor (64%) in where they made an online purchase.