Shopify seeks Deliverr acquisition to boost rapid fulfilment
Acquisition will add network of warehouses to Shopify as it seeks to compete with the biggest names in logistics and e-commerce
E-commerce company Shopify is due to acquire Deliverr Inc. in a $2.1 billion deal.
The company has announced the acquisition just as disappointing results have pushed its share price downward, with the company’s last earnings coming in below analyst expectations.
Shopify said that they hope merchants will “be able to reduce logistics costs and eliminate the hassle of managing complex supply chains” with the capabilities Deliverr will add.
Deliverr is an e-commerce fulfilment specialising in two-day delivery through a network of warehouses in the US. It currently states on its website that it has more than 80 locations throughout the country and five sortation centres.
The acquisition aims to deepen Shopify’s inventory capabilities and broaden its storage and freight services with access to new warehouses and couriers. The network of both Shopify-owned and third-party warehouses is expected to allow packages to be delivered within a maximum two-day timeframe to more than 90% of the US. This would make good on Shopify’s 2019 announcement that it would build a network of fulfilment centres in the US.
This move has put Shopify into direct competition with Amazon. Deliverr’s technology should give e-commerce companies a one-stop-shop to ship their inventory from different sales channels, including websites, bricks-and-mortar stores, Amazon, EBay, Etsy and Walmart, as well as via social platforms.
Now-competitor GXO Logistics posted a contrasting 19% growth in organic revenue in its 2022 Q1 report. The spin-off from XPO Logistics operates high-tech warehouses for multinationals such as Apple and Nestle. The company is also expanding in the third-party logistics market with first-time outsourcing the number-one driver of new business.