Shopify ‘Primes’ for head-to-head competition with Amazon.
Ottawa’s e-commerce giant Shopify has completed its acquisition of San Francisco-based Deliverr to expand its in-house fulfillment network.
Deliverr’s 400 employees are expected to join Shopify, more than doubling the size of Shopify’s current fulfillment team.
As the two consolidate, Shopify and Deliverr will be working together to launch Shop Promise, a new service that will offer consumers two-day and next-day delivery options. This move puts Shopify in even more direct competition with Amazon’s Prime delivery services.
Shopify and Amazon have continuously been pitted against each other as both retail companies develop new products that make them more aligned. Amazon, for example, launched ‘Buy with Prime’ earlier this year, a service allowing merchants to sell from their own websites and use Amazon’s fulfillment service that also provides fast delivery options.
Shopify first announced its intention to acquire Deliverr in May for $2.1 billion USD during its first quarter earnings call. At that time, Shopify said that Deliverr’s infrastructure and capabilities will expand the reach of the Shopify Fulfillment Network (SFN).
Founded in 2017, Deliverr is an e-commerce logistics startup that provides shipping services for online marketplaces. The American company claims that its logistics network delivers more than $1 million per month for thousands of merchants across the United States (US).
Deliverr’s 400 employees are joining Shopify, more than doubling the size of Shopify’s current fulfillment team. Shopify said it plans to combine 6 River Systems, SFN, and Deliverr into a broader logistics network under the leadership of newly appointed CEO Aaron Brown, who has led the SFN since 2020.
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“Our technology and expertise in inventory management, inventory placement, and demand chain combines perfectly with Shopify’s roadmap, enabling us to now build an end-to-end logistics platform together,” said Harish Abbott, co-founder and CEO of Deliverr. “Shopify has been building the future of merchant-first fulfillment solutions, and our team has a track record of helping businesses of all sizes streamline their operations.”
Shopify first began moving into logistics with fulfillment centres in 2019, becoming a rival for Amazon’s Prime delivery service, which was launched in 2005.
Earlier this year, Shopify terminated several contracts with third-party warehouse and fulfillment partners. In its February earnings call, Shopify CFO Amy Shapero said these changes constituted a way for Shopify to leverage more of its own warehouses, rather than independent ones.
Now with the addition of Deliverr, Shopify said SFN will be able to offer merchants a single platform for their logistics needs such as initial receipt of inventory, smart distribution, deliveries, and returns.
Featured image from Shopify.