diff --git a/app/services/order_service.py b/app/services/order_service.py
index 27631769..7c0f65ad 100644
--- a/app/services/order_service.py
+++ b/app/services/order_service.py
@@ -342,6 +342,10 @@ class OrderService:
         """
         Create an order from Letzshop shipment data.
 
+        Validates all products exist BEFORE creating any database records.
+        This ensures we don't leave the session in an inconsistent state
+        if validation fails.
+
         Args:
             db: Database session
             vendor_id: Vendor ID
@@ -354,6 +358,67 @@ class OrderService:
             ValidationException: If product not found by GTIN
         """
         order_data = shipment_data.get("order", {})
+
+        # Generate order number using Letzshop order number
+        letzshop_order_number = order_data.get("number", "")
+        order_number = f"LS-{vendor_id}-{letzshop_order_number}"
+
+        # Check if order already exists (read-only, safe to do first)
+        existing = (
+            db.query(Order)
+            .filter(Order.order_number == order_number)
+            .first()
+        )
+        if existing:
+            return existing
+
+        # =====================================================================
+        # PHASE 1: Parse and validate all data BEFORE any database writes
+        # =====================================================================
+
+        # Parse inventory units
+        inventory_units = shipment_data.get("inventoryUnits", [])
+        if isinstance(inventory_units, dict):
+            inventory_units = inventory_units.get("nodes", [])
+
+        # Collect all GTINs and validate products exist
+        gtins = set()
+        for unit in inventory_units:
+            variant = unit.get("variant", {}) or {}
+            trade_id = variant.get("tradeId", {}) or {}
+            gtin = trade_id.get("number")
+            if gtin:
+                gtins.add(gtin)
+
+        # Batch query all products by GTIN
+        products_by_gtin: dict[str, Product] = {}
+        if gtins:
+            products = (
+                db.query(Product)
+                .filter(
+                    and_(
+                        Product.vendor_id == vendor_id,
+                        Product.gtin.in_(gtins),
+                    )
+                )
+                .all()
+            )
+            products_by_gtin = {p.gtin: p for p in products if p.gtin}
+
+        # Validate all products exist BEFORE creating anything
+        missing_gtins = gtins - set(products_by_gtin.keys())
+        if missing_gtins:
+            missing_gtin = next(iter(missing_gtins))
+            logger.error(
+                f"Product not found for GTIN {missing_gtin} in vendor {vendor_id}. "
+                f"Order: {order_number}"
+            )
+            raise ValidationException(
+                f"Product not found for GTIN {missing_gtin}. "
+                f"Please ensure the product catalog is in sync."
+            )
+
+        # Parse address data
         ship_address = order_data.get("shipAddress", {}) or {}
         bill_address = order_data.get("billAddress", {}) or {}
         ship_country = ship_address.get("country", {}) or {}
@@ -364,16 +429,6 @@ class OrderService:
         ship_first_name = ship_address.get("firstName", "") or ""
         ship_last_name = ship_address.get("lastName", "") or ""
 
-        # Find or create customer (inactive)
-        customer = self.find_or_create_customer(
-            db=db,
-            vendor_id=vendor_id,
-            email=customer_email,
-            first_name=ship_first_name,
-            last_name=ship_last_name,
-            is_active=False,
-        )
-
         # Parse order date
         order_date = datetime.now(UTC)
         completed_at_str = order_data.get("completedAt")
@@ -402,18 +457,19 @@ class OrderService:
         }
         status = status_mapping.get(letzshop_state, "pending")
 
-        # Generate order number using Letzshop order number
-        letzshop_order_number = order_data.get("number", "")
-        order_number = f"LS-{vendor_id}-{letzshop_order_number}"
+        # =====================================================================
+        # PHASE 2: All validation passed - now create database records
+        # =====================================================================
 
-        # Check if order already exists
-        existing = (
-            db.query(Order)
-            .filter(Order.order_number == order_number)
-            .first()
+        # Find or create customer (inactive)
+        customer = self.find_or_create_customer(
+            db=db,
+            vendor_id=vendor_id,
+            email=customer_email,
+            first_name=ship_first_name,
+            last_name=ship_last_name,
+            is_active=False,
         )
-        if existing:
-            return existing
 
         # Create order
         order = Order(
@@ -464,10 +520,6 @@ class OrderService:
         db.flush()
 
         # Create order items from inventory units
-        inventory_units = shipment_data.get("inventoryUnits", [])
-        if isinstance(inventory_units, dict):
-            inventory_units = inventory_units.get("nodes", [])
-
         for unit in inventory_units:
             variant = unit.get("variant", {}) or {}
             product_info = variant.get("product", {}) or {}
@@ -477,30 +529,8 @@ class OrderService:
             gtin = trade_id.get("number")
             gtin_type = trade_id.get("parser")
 
-            # Find product by GTIN
-            product = None
-            if gtin:
-                product = (
-                    db.query(Product)
-                    .filter(
-                        and_(
-                            Product.vendor_id == vendor_id,
-                            Product.gtin == gtin,
-                        )
-                    )
-                    .first()
-                )
-
-            if not product:
-                # This should be an error per the design requirements
-                logger.error(
-                    f"Product not found for GTIN {gtin} in vendor {vendor_id}. "
-                    f"Order: {order_number}"
-                )
-                raise ValidationException(
-                    f"Product not found for GTIN {gtin}. "
-                    f"Please ensure the product catalog is in sync."
-                )
+            # Get product from pre-validated map
+            product = products_by_gtin.get(gtin)
 
             # Get product name
             product_name = (
@@ -523,7 +553,7 @@ class OrderService:
 
             order_item = OrderItem(
                 order_id=order.id,
-                product_id=product.id,
+                product_id=product.id if product else None,
                 product_name=product_name,
                 product_sku=variant.get("sku"),
                 gtin=gtin,