The effects of sedimentological, depositional and taphonomic processes on preservation potential of Cambrian small shelly fossils (SSF) have important implications for their utility in biostratigraphy and high-resolution correlation. To investigate the effects of these processes on fossil occurrence, detailed microfacies analysis, biostratigraphic data, and multivariate analyses are integrated from an exemplar stratigraphic section intersecting a suite of lower Cambrian carbonate palaeoenvironments in the northern Flinders Ranges, South Australia. The succession deepens upsection, across a low-gradient shallow-marine shelf. Six depositional Facies Sequences are identified ranging from protected (FS1) and open (FS2) shelf/lagoonal systems, high-energy inner ramp shoal complex (FS3), mid-shelf (FS4), mid- to outer-shelf (FS5) and outer-shelf (FS6) environments. Non-metric multi-dimensional scaling ordination and two-way cluster analysis reveal an underlying bathymetric gradient as the main control on the distribution of SSFs. Unlike groups that produced primary organophosphatic biominerals, taxa that built calcareous skeletons are more taphonomically-controlled, which is further exacerbated by sampling and processing biases. A strong facies association with condensed and reworked horizons suggests the stratigraphic occurrence of calcareous groups reflects conditions conducive to preservation (phosphogenesis and phosphatization) rather than true stratigraphic ranges. Consequently, organophosphatic taxa should take precedence in the erection of biostratigraphic zones for subdivision of lower Cambrian successions.