Fascinating piece in The Information about Shopify decided to abandon its dreams of having an Amazon-live delivery and logistics business:
“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,” The Information writes. “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.”
According to the story, “Shopify and others have tried to replicate the success of Amazon in helping online sellers make fast deliveries, but Amazon has achieved its position by pouring massive sums of money into building its fulfillment network over decades, including through a pandemic-era building push that coincided with Shopify’s entry into fulfillment. From 2019 to 2022 alone, Amazon invested $88 billion in transportation and fulfillment capital expenditures, according to estimates from Bank of America Global Research.
“But the ambitions of Amazon’s rivals have been nearly impossible to turn into reality, because it is complex and expensive to scale physical operations, and logistics investments require a long time horizon to pay off.”
You can read the entire piece here.
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