diff --git a/lib/bb/fetch2/npmsw.py b/lib/bb/fetch2/npmsw.py
index f09ea5794..122af4582 100644
--- a/lib/bb/fetch2/npmsw.py
+++ b/lib/bb/fetch2/npmsw.py
@@ -93,6 +93,10 @@ class NpmShrinkWrap(FetchMethod):
             if link:
                 localpath = resolved
                 unpack = False
+            
+            # Handle local tarball sources
+            elif resolved and resolved.startswith("file"):
+                localpath = resolved[5:]
 
             # Handle registry sources
             elif version and is_semver(version) and integrity:
@@ -139,10 +143,6 @@ class NpmShrinkWrap(FetchMethod):
 
                 localpath = os.path.join(d.getVar("DL_DIR"), localfile)
 
-            # Handle local tarball sources
-            elif resolved.startswith("file"):
-                localpath = resolved[5:]
-
             # Handle git sources
             elif resolved.startswith("git"):
                 regex = re.compile(r"""