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Shopify launches network of warehouses and shipping in U.S. to handle orders for independent merchants

- Reuters

Fulfillment network aims to provide two-day shipping within 99% of United States

Shopify Inc. has quietly built a network of warehouses and shipping infrastructure in the United States, and starting today they will be offering to manage inventory and shipping for the merchants on their e-commerce platform.

Chief product officer Craig Miller announced the new product in Toronto at Shopify’s annual Unite developer conference. The fulfillment network is only in the United States right now, and so far it’s only open to early access applications for selected Shopify merchants, but the company said it’s up and running today, ready to start delivering merchandise.

The fulfillment network marks a significant expansion for Shopify, which has historically been more focused on web-based services and software.

The company’s core product is a platform that handles all the e-commerce heavy lifting, processing payments and orders in online stores.

But last year at Unite Shopify launched a hardware product — a point-of-sale device, and a credit and debit card reader which integrates with point-of-sale software, allowing merchants to process transactions in bricks-and-mortar retail locations.

The card reader was a signal that Shopify is intent on expanding beyond the internet, into the real world, and this year the company built on that strategy by announcing a case that goes on your cell phone with a built-in chip and card reader, allowing merchants to process payments from their smartphone.

Shopify also announced that they are now blending the online and physical retail systems by beta testing a new tool that allows customers to buy online and pick up their purchase in-store for Shopify merchants.

With the fulfillment network Miller didn’t mention Amazon.com Inc. by name, but he talked about how difficult and expensive it is for independent retailers to offer two-day shipping — which is standard for Amazon.

Shopify said they’re going to be using inventory-allocation technology with machine learning to predict the closest fulfillment centers and optimal inventory quantities per location.

Shopify’s basic message to merchants was that if you send products to the fulfillment network, the company will take care of the rest. They aim to provide two-day shipping within 99 per cent of the continental United States.

“The Shopify fulfillment network is already up and running,” Miller said, adding that the company has already been using it to ship their own hardware products to customers.

It was not immediately clear how much Shopify will charge merchants for this service.

Fulfillment and shipping is such a major source of frustration for online merchants, that Shopify general manager of core product Lynsey Thornton was interrupted by multiple applause breaks while announcing the ability to set up custom pricing for shipping and edit orders after purchase, along with other changes to the Shopify fulfillment software.

Copyright Postmedia Network Inc., 2019


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