Ecommerce company Shopify supports small businesses with technology like ecommerce website builders and retail Point of Sale systems. Now, it's dramatically expanding capacity in another area, fulfillment, with the acquisition of Deliverr.
Shopify is paying $2.1 billion in stock and cash to buy the ecommerce shipping company. Deliverr ships over one million orders monthly and gaining its network will more than double the size of Shopify’s fulfillment team.
It's the biggest acquisition in Shopify's history. The goal? Easier two-day delivery and end-to-end control over the ecommerce process.
Why Shopify Wants Deliverr
The two companies are a great match, according to Shopify's press release about the deal.
Deliverr has an asset-light infrastructure while Shopify owns a “network of large-capacity, self-operated hubs.” These Shopify warehouses can be put to use with Deliverr's connections, which include carrier partners and last-mile partners.
“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 a superpower,” said Tobi Lütke, Shopify’s CEO. “Together with Deliverr, Shopify Fulfillment Network will give millions of growing businesses access to a simple, powerful logistics platform that will allow them to make their customers happy over and over again.”
Deliverr does already operate from warehouses located across the US, which will allow Shopify to bolster its reach. In the end, the benefit to the merchants who use Shopify is an easier, streamlined, and dependable way to get their products into buyers' hands.
Deliverr Has a Lot to Offer
The press release notes that the current “hyper-fragmented” market of third-party logistics companies and transportation providers can make fulfilment a huge hassle for merchants.
With Deliverr, all aspects of inventory management and delivery can be handled together: inventory receiving and inspection, fulfillment optimization across online and brick-and-mortar channels, and the last-mile delivery services that can take packages to people's doors.
Plus, Shopify says, “inventory placement algorithms” can predict demand in order to better route inventory. It all adds up to make Shopify a better rival to Amazon when it comes to delivering the goods.
Is Shopify right for you?
We've already rated Shopify's software offering fairly highly, and this huge acquisition makes Shopify look even better moving forwards.
We have yet to see exactly how well Deliverr can carry through on the promises Shopify is making, but both companies have a solid track record and there's no reason to think they won't provide an end-to-end fulfillment service even stronger than Shopify's existing one.
We can, however, confirm that Shopify's ecommerce-centric website builder is the top pick for small ecommerce businesses in particular, thanks to solid features, 24/7 support via phone, live chat and email, and prices starting at just $24 per month.
It does charges transaction fees for all merchants not using Shopify's own Payments processing system, though, which may be a constraint for some. You can read up on all the pros and cons in this article, where we stack Shopify up against industry heavyweight Wix.