Why Shopify Ditched Its Amazon-Like Delivery Dreams
Shopify’s vision of building an Amazon-like logistics business at a fraction of the cost proved impossible to pull off, and its short-lived Deliverr acquisition only added to expensive headaches.
When Shopify last month announced the sale of its delivery operation, it was an abrupt reversal of a strategy to compete with Amazon it had spent four years and billions of dollars developing. Just six months earlier, for instance, top Shopify executives dismissed suggestions from logistics leaders that they scale back their investment to reduce the operation’s costs.
In November of last year, Shopify founder and CEO Tobi Lütke assembled his top logistics executives and the company’s new finance chief for a meeting in Toronto to discuss the status of the plans. At that point, Shopify’s revenue growth had cooled sharply from pandemic-era peaks and questions from investors and analysts had been mounting following a $2.1 billion mostly-cash acquisition that summer of fulfillment startup Deliverr. Logistics executives came to the meeting with ideas to cut costs, a person familiar with the discussions said.