Shopify versus Amazon: One company planning billion-dollar acquisition, other announces new strategy as competition heats up

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A deal worth about US$2.5-billion to acquire San Francisco startup Deliverr is expected to be finalized before May 5, according to a senior source at Shopify, while Amazon reveals its new ‘Buy With Prime’ feature for merchants and vendors

announces a new strategy that will put the Seattle-based global tech giant in more direct competition with the Ottawa-based e-commerce platform.

A final decision has not yet been made, and the deal could fall apart, the source said. However, if all goes as planned, Shopify will be able to tap into a nationwide fulfilment network through Deliverr’s warehouses across the United States. This acquisition is part of an ambitious strategic shift at Shopify to rival Amazon, the source added.

The new feature is invitation-only for now. A group of U.S. merchants will be picked from millions of global sellers, Amazon said. They will be charged fees for the Buy With Prime button. The news release did not disclose the exact structure or nature of the fees.In January, Shopify cut several warehouses from its network, which the company had been working on since the start of the COVID-19 pandemic.

However, Thursday’s announcement from Amazon and Shopify’s intention to acquire Deliverr together signal that both companies plan to compete directly in terms of fulfilment networks and point-of-sale systems.

 

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