This assignment is worth 10 points total (5 points available per question). Read the article linked below and answer the two questions. Your answer to each of the questions should be in your own words, adhere to the expected 200 or more word count criteria, and exhibit depth of analysis by connecting the concept to a principle in your textbook or other related article or reading (need to cite references). Please number your answers to show which question you are answering. Your answers will be scanned by Turnitin similarity and artificial intelligence check; reports will be published to you after grading has been completed.
Shopify Adds Fulfillment ServiceDownload Shopify Adds Fulfillment Service
1. What exactly is Shopify trying to accomplish? Explain their business model and market segment.
2. Should Amazon feel threatened? Why or why not?
Online Retail Provider Shopify Adds
Fulfillment Service
E-commerce specialist's move into physical
services is aimed at helping sellers compete
with Amazon's expanding logistics and
distribution capabilities
Smith, Jennifer. Wall Street Journal (Online)
New York, N.Y. [New York, N.Y]19 June 2019.
E-commerce technology company Shopify Inc. is extending into physical distribution, offering
customers access to a network of dedicated U.S. fulfillment centers to store and ship consumer
goods for online orders.
The aim is to speed up delivery for retailers racing to keep up with Amazon.com Inc. while
keeping a lid on transport costs by placing inventory across a distributed network within easy
reach of major population centers.
Ottawa-based Shopify provides internet shopping platforms and other services that help
companies sell items online. It has also branched into payment technology and hardware for use
at retail stores and pop-up locations as more online businesses open bricks-and-mortar locations.
Its customers include Unilever PLC, Kylie Cosmetics and footwear maker Allbirds Inc.
Shopify said Wednesday that its new service uses machine learning to forecast demand, allocate
inventory and route orders to the closest fulfillment centers. The company is working with
logistics providers and software companies in Nevada, California, Texas, Georgia, New Jersey,
Ohio and Pennsylvania.
"Our aim is to make fast and inexpensive shipping the new standard on the internet," said
Shopify Chief Product Officer Craig Miller.
Shopify's move into warehousing services puts it in competition with companies such as Belgian
Post Group-owned Radial , which provides technology and e-commerce services for retailers
such as Dick's Sporting Goods Inc. at 21 fulfillment centers.
The services are part of a growing array of operations that startups and traditional shipping
companies have launched to compete with Amazon's expanding distribution system, including a
Fulfillment by Amazon business that ties its online marketplace for third-party sellers to its
burgeoning network of distribution centers and transportation options.
FedEx Corp. two years ago started a service called FedEx Fulfillment pitched at small and
medium-size companies, and delivery giant United Parcel Service Inc. last year rolled out a
warehouse platform, Ware2Go, that matches retailers with fulfillment providers. XPO Logistics
Inc. launched a flexible distribution service last year that it expects to generate $1 billion in
revenue over the next few years.
Among startups, Flexe Inc., a Seattle-based online marketplace that connects warehouse
operators with businesses in need of storage, has built a network of more than 1,000 warehouses
across North America and customers that include Walmart Inc.
Shopify reported $320.5 million in first-quarter revenue, up by 50% from the prior year, and
$10.3 million in adjusted net profit, compared with $4.2 million for the same period in 2018. The
company had an adjusted operating loss of $1.4 million, or 0.4% of revenue, compared with $0.2
million or 0.1% of revenue in the first quarter last year.
Credit: By Jennifer Smith