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Supply Chain News: Shopify Tries to Out Amazon Amazon with Acquisition of Deliverr


eCommerce Fulfillment Platform will Enable End-to-End Logistics and Inventory Management, Shopify Says

May 17, 2022


SCDigest Editorial Staff

For some time, fast growing ecommerce store front software vendor Shopify has been building out a fulfilment network for its web merchant customers that would rival Amazon’s Fulfilled by Amazon (FBA) 3PL capability for its marketplace clients. (See eCommerce Platform Shopify to Invest Big to Build Out Fulfillment Network.)

Supply Chain Digest Says...

Currently Deliverr’s main customers ship their orders through a range of sites that may include Fulfillment by Amazon, their own warehouses or even garages.

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Early this year, Shopify said that starting in 2023, it will invest about $1 billion over two years to significantly 2=expand the number of mostly company-owned fulfillment centers it manages as part of the Shopify Fulfillment Network. The objective, Shopify said: provide its customers the ability to offer two-day or less delivery to over 90% of the US population.

In 2019, Shopify acquired mobile robot maker 6 River Systems for $450 million. In 2012, Amazon acquired another mobile robot developer, Kiva Systems, for over $700 million, and stopped selling the product to other companies.

Now, Shopify has upped the ante with the acquisition of Deliverr for $2.1 billion in cash and stock, enabling what Shopify founder and CEO Tobi Lütke says will be an “end-to-end logistics” platform for millions of merchants. He added in a blog post that “Our goal is to not only level the playing field for independent businesses, but tilt it in their favor — turning their size and agility into their superpower.”

San Francisco-based Deliverr was founded in 2017, offering software that predicts the demand for each product by market based on a number of variables. That enables companies to more optimally position inventory across the network for ecommerce fulfillment.

Deliverr’s technology integrates third-party sellers with major ecommerce sites including Amazon, eBay and Walmart. Currently Deliverr’s main customers ship their orders through a range of sites that may include Fulfillment by Amazon, their own warehouses or even garages in some cases.

How that may change under Shopify with its own fulfillment network. The company’s value is for merchants to take conduct ecommerce and now orchestrate the fulfilment for customers outside Amazon’s marketplace and logistics assets.

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Deliverr’s platform also determines the best delivery method to ship to customers.

Just in November 2021, Deliverr accepted up $240 million in venture-capital funding.

Shopify is forming a new unit for all this headed by newly appointed chief executive of logistics Aaron Brown, who has led SFN since 2020.

Deliverr co-founder and CEO Harish Abbott said that “We’re excited to join Shopify in their mission to make commerce better for everyone while democratizing shipping and fulfillment for independent entrepreneurs.”

What are your thoughts on Shopify's acquistion? Let us know your thoughts at the Feedback button below (email) or in the Feedback section.




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