{"id":1503307,"date":"2022-05-16T10:00:59","date_gmt":"2022-05-16T14:00:59","guid":{"rendered":"https:\/\/www.practicalecommerce.com\/?p=1503307"},"modified":"2022-08-31T14:59:07","modified_gmt":"2022-08-31T18:59:07","slug":"shopify-buys-logistics-company-deliverr","status":"publish","type":"post","link":"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr","title":{"rendered":"Shopify Buys Logistics Company Deliverr"},"content":{"rendered":"<p>Shopify announced earlier this month that it would acquire California-based ecommerce fulfillment company <a href=\"https:\/\/deliverr.com\/\">Deliverr<\/a>\u00a0for $2.1 billion in cash and stock, representing the largest acquisition in Shopify&#8217;s history.<\/p>\n<p>Founded in 2017, Deliverr leases warehouse space and uses the fulfillment departments of those warehouses to pick and pack ecommerce orders. Deliverr distributes more than a million orders a month, spread across UPS, FedEx, and USPS. With the acquisition, Shopify will add 400 employees to its headcount.<\/p>\n<h3>Deliverr Acquisition<\/h3>\n<p>A strength of Deliverr is its use of predictive analytics to anticipate demand for products and pre-position them close to geographical areas of anticipated need, as well as to determine the best delivery method.<\/p>\n<div id=\"attachment_1503334\" style=\"width: 610px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1503334\" class=\"wp-image-1503334\" title=\"Deliver home page\" src=\"https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-570x213.jpg\" alt=\"Deliver home page\" width=\"600\" height=\"225\" srcset=\"https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-570x213.jpg 570w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-300x112.jpg 300w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-768x288.jpg 768w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-1536x575.jpg 1536w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-2048x767.jpg 2048w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-150x56.jpg 150w, https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Deliverr-500x187.jpg 500w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><p id=\"caption-attachment-1503334\" class=\"wp-caption-text\">Shopify&#8217;s acquisition of Deliver, at $2.1 billion in cash and stock, is the largest in the company&#8217;s history.<\/p><\/div>\n<p>Shopify says that Deliverr will combine with Shopify Fulfillment Network (SFN), the company&#8217;s existing fulfillment service that merchants on its platform use to store inventory and fulfill orders.<\/p>\n<p>Deliverr&#8217;s technology will also power Shop Promise, a new service that will provide customers with two-day and next-day delivery.<\/p>\n<p>After the acquisition, Shopify will offer new inventory storage, freight, and returns handling capabilities accessible to merchants whether or not they use SFN.<\/p>\n<p>Shopify says it will also roll out a warehouse management system across its facilities by the end of the second quarter.<\/p>\n<p>In 2020, Shopify acquired 6 River Systems, a warehouse automation technology provider, which will integrate with Deliverr.<\/p>\n<p>In a blog post, Shopify <a href=\"https:\/\/news.shopify.com\/oh-ship-shopify-to-acquire-deliverr-for-21b-building-the-future-of-global-logistics-for-independent-brands\">stated<\/a> that the Deliverr acquisition would provide &#8220;simplified multichannel inventory management with a single place for merchants to ship their inventory for different sales channels. These include a merchant&#8217;s online store, brick-and-mortar locations, wholesale customers, marketplaces including Amazon, eBay, Etsy, and Walmart, and platforms like Google, Facebook, Instagram, and TikTok.&#8221;<\/p>\n<p>Given the increasing dissatisfaction with Amazon FBA and its changing inventory rules and <a href=\"https:\/\/www.practicalecommerce.com\/rivian-write-down-moves-amazon-to-q1-2022-net-loss\">increased costs for sellers<\/a>, Shopify has emerged as an alternative for merchants who prefer selling direct to consumers via their own websites.<\/p>\n<h3>Mirroring Amazon<\/h3>\n<p>Amazon somewhat blunted the advantage of Shopify&#8217;s Deliverr acquisition with the announcement of its Buy with Prime program earlier this month. This service lets a select group of FBA merchants offer Prime deliveries through their own online stores.<\/p>\n<p>Amazon intends to expand the program to include merchants that don&#8217;t use its fulfillment service and eventually to those companies that don&#8217;t sell on its platform.<\/p>\n<p>Shopify and Amazon will now compete for the same merchants, regardless of how and where they sell their products.<\/p>\n<p>Deliverr emphasizes one of its advantages over Amazon FBA merchants \u2014 it does not limit the amount of inventory a merchant can store in its warehouses.<\/p>\n<p>Also, with the acquisition of Deliverr, Shopify has narrowed Amazon&#8217;s competitive advantage since Shopify can now consistently deliver in a one or two-day timeframe.<br \/>\n<\/p>\n<h3>Financial Results<\/h3>\n<p>While Shopify&#8217;s Q1 2022 revenue of $1.2 billion was 22% higher than the same period in 2021, it missed analysts&#8217; estimates of roughly $1.25 billion.<\/p>\n<p>Shopify&#8217;s net loss for the first quarter of 2022 was $1.5 billion, or $11.70 per share, compared with net income of $1.3 billion, or $9.94 per share, for the first quarter of 2021. As a result, Shopify&#8217;s stock fell 14.7% to $413.64 resulting in an overall 2022 decline of 70%.<\/p>\n<p>With the acquisition of Deliverr, Shopify is banking on fulfillment to drive revenue and help it regain profitability.<\/p>\n<p><a href=\"https:\/\/www.practicalecommerce.com\/daily-drone-deliveries-surpass-2000-globally\">Efficient fulfillment<\/a> and next-day or two-day delivery are key differentiators when the supply chain is volatile and <a href=\"https:\/\/www.practicalecommerce.com\/charts-global-parcel-shipping-volume-transit-times\">inventory constraints<\/a> exist.<\/p>\n<p>Shopify&#8217;s guidance for 2022 predicts that year-over-year revenue growth will be minimal in the first half of the year and highest in the fourth quarter of 2022.<\/p>\n<p>Almost all major ecommerce platform players have acknowledged that they will not be able to sustain the high growth rates they enjoyed at the pandemic&#8217;s peak.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shopify&#8217;s acquisition of fulfillment company Deliverr will help it compete with Amazon and will otherwise jumpstart stalled growth.<\/p>\n","protected":false},"author":119,"featured_media":1503338,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_wp_rev_ctl_limit":""},"categories":[13096],"tags":[],"class_list":["post-1503307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shipping-fulfillment",""],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.2 (Yoast SEO v25.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Shopify Buys Logistics Company Deliverr - Practical Ecommerce<\/title>\n<meta name=\"description\" content=\"Shopify&#039;s acquisition of fulfillment company Deliverr will help it compete with Amazon and will otherwise jumpstart stalled growth.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shopify Buys Logistics Company Deliverr\" \/>\n<meta property=\"og:description\" content=\"Shopify&#039;s acquisition of fulfillment company Deliverr will help it compete with Amazon and will otherwise jumpstart stalled growth.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr\" \/>\n<meta property=\"og:site_name\" content=\"Practical Ecommerce\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/practicalecommerce\" \/>\n<meta property=\"article:published_time\" content=\"2022-05-16T14:00:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-31T18:59:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Shopify-Buys-Logistics-Company-Deliverr.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"360\" \/>\n\t<meta property=\"og:image:height\" content=\"240\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Marcia Kaplan\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@practicalecomm\" \/>\n<meta name=\"twitter:site\" content=\"@practicalecomm\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Marcia Kaplan\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr\"},\"author\":{\"name\":\"Marcia Kaplan\",\"@id\":\"https:\/\/www.practicalecommerce.com\/#\/schema\/person\/083992f10baba291869576f713ab45a8\"},\"headline\":\"Shopify Buys Logistics Company Deliverr\",\"datePublished\":\"2022-05-16T14:00:59+00:00\",\"dateModified\":\"2022-08-31T18:59:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr\"},\"wordCount\":619,\"publisher\":{\"@id\":\"https:\/\/www.practicalecommerce.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.practicalecommerce.com\/shopify-buys-logistics-company-deliverr#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.practicalecommerce.com\/wp-content\/uploads\/2022\/05\/Shopify-Buys-Logistics-Company-Deliverr.jpg\",\"articleSection\":[\"Shipping &amp; 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