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Shopify is often seen as an alternative for independent sellers frustrated with Fulfillment by Amazon’s changing inventory rules and increasing seller costs. Will acquiring Deliverr help close the gap on fast fulfillment?

Deliverr’s technology integrates third-party sellers with major e-commerce sites including Amazon, eBay and Walmart and helps them move their products to consumers in one to two days. Using predictive analytics and machine learning, Deliverr’s software anticipates demand for products based on geography, among other variables. This helps to optimally “pre-position” inventory in its network of more than 80 leased warehouses, where third-party logistics partners pick, pack and deliver orders.

Combined with Shopify’s self-operated warehouse hubs, Deliverr’s technology will power Shop Promise, a new Shopify service that will provide its customers with two-day and next-day delivery as well as expanded options for storage, freight, inventory preparation and returns. Shopify’s fastest shipping option has been two days.

Shopify wrote in a blog entry , “This delivery promise extends beyond the online store across surfaces like Google, Facebook, Instagram and the Shop app, helping merchants improve trust and increase sales with billions of potential customers by meeting them where they like to shop. Most importantly, Shop Promise guarantees merchants what no other commerce platform can: full ownership of their brand, business intelligence, and customer data.”

The $2.1 billion combination, which is pending regulatory approval, also promises merchants a “one-stop shop for their logistics needs,” from initial receipt of inventory, to distribution and returns, as well as “simplified multichannel inventory management” with a single place for merchants to ship their inventory for different sales channels.

“Our goal is to not only level the playing field for independent businesses, but to tilt it in their favor — turning their size and agility into their superpower,” Shopify CEO Toby Lutke said in a statement.

News of the acquisition follow’s Amazon’s launch last month of Buy With Prime functionality, which allows retailers that sell on Amazon’s third-party marketplace to implement Amazon Prime on their own websites.

According to Shopify, Amazon leads U.S. e-commerce with 41.0 percent market share in 2021, followed by Shopify at 10.3 percent, and Walmart at 6.6 percent.

Shopify Reports First-Quarter 2022 Financial Results, Plans to Acquire Ecommerce Fulfillment Technology Provider Deliverr – Shopify

https://news.shopify.com/shopify-reports-first-quarter-2022-financial-results-plans-to-acquire-ecommerce-fulfillment-technology-provider-deliverr

DISCUSSION QUESTIONS: Does Deliverr potentially make Shopify a more serious competitor to Amazon relative to fulfillment and inventory management? What other steps or investments may be necessary for Shopify to gain ground on Amazon, particularly in the wake of Buy With Prime?

7 Comments on "Will Deliverr help Shopify better compete with Amazon?"

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The acquisition of Deliverr will definitely improve Shopify’s chances of competing with Amazon, however, Amazon’s Buy With Prime program is hard to beat. More competitive delivery times and lower selling fees will help Shopify attract and retain sellers, but they need to continue to find ways to speed delivery times while mananging costs.

It’s not hard to find a story or an article on a DTC or e-commerce business that is struggling to make a profit. So it seems like operational efficiency quickly rises to the top of the list in making an e-commerce related business profitable. We are getting past the sexiness of growth and being reminded daily that profit has to enter the picture at some point. Operational collaboration and efficiency have to quickly partner with strong product in order to make the business sustainable.

I think it does. I have seen businesses grow from zero to $400,000 in the first year using Shopify. Its fulfillment costs were killer, and the owner always bought too much inventory.

Adding this into the mix is a fabulous idea.

I’d like to see Shopify slip into stores as well. Perhaps it might partner with Microsoft to create a full all-channel experience. Despite the excitement every time Amazon opens a store in some category or other, I remain unconvinced that the company understands how to “do” stores. It’s deceptively tricky and, while you can buy the operations expertise (maybe), you can’t buy the subtleties of assortment, product placement and in-person customer service.

I agree completely with your analysis of Amazon’s stores. My Amazon Fresh is a disaster on so many levels — low inventory, slim assortments, and way too many associates clogging the aisles.

Most retailers don’t need all the services Amazon offers — Shopify with Deliverr may be the right approach for them.

Yes, yes, yes. Broadening Shopify’s reach with Deliverr is just a win/win for everyone in the face of the 800 pound Amazon gorilla who is omnipresent. Better competition means better performance, pricing and availability. The only real question is can Shopify use this to improve their profit picture?

What grade do you give to Shopify for its pending combination with Deliverr?