On May 4th, Shopify made headlines with its announcement to sell its logistics business to Flexport. This deal involves Shopify receiving 13% equity in Flexport, bringing its ownership to the high teens.
Flexport, led by Dave Clark, a former logistics leader and head of worldwide operations at Amazon, has a strong background in building logistics and final-mile businesses during his 20-year tenure at Amazon.
It’s worth noting that Shopify had previously acquired Deliverr for $2.1 billion, showcasing its commitment to bolstering its logistics capabilities. Flexport, on the other hand, has raised $2.3 billion to date, with a primary focus on ocean, air, truck, and rail freight forwarding and brokerage services.
Additionally, the integration of 6 River Systems, which specializes in warehouse automation and robotic solutions, adds further depth to the partnership.
In today’s episode, I am joined by James Kelly, a former Amazon insider and current Amazon and DTC seller, as well as the CEO of Woolly.Clothing and other ventures.
We dive into this intriguing partnership and explore how Shopify’s recent divestment of its logistics business to Flexport has implications for both companies and the broader e-commerce landscape.
Is Flexport Now a Viable Competitor to Amazon FBA?
In a previous episode, we discussed Shopify’s challenges around competing with Amazon’s Buy with Prime program. This strategic divestment by Shopify, coupled with its partnership with Flexport, showcases a savvy move for both companies.
With Dave Clark’s logistics expertise and ambitious plans, Flexport aims to compete head-on with Amazon’s FBA. More competition in the logistics space is a net positive for sellers and brands, alleviating some of the challenges they face.
However, without a change in legislation, raising the necessary funds to compete with FBA might prove challenging for Flexport. As the story unfolds, it will be fascinating to witness the continued evolution of the e-commerce landscape.
What This Deal Means for the eCommerce Industry
The Shopify-Flexport partnership marks a significant development in the eCommerce industry. It represents a strategic move by Shopify to streamline its focus while leveraging Flexport’s logistics capabilities.
With the expertise of Dave Clark and the potential for increased competition in the logistics sector, this collaboration has the potential to reshape the dynamics of eCommerce fulfillment operations.
As always, stay tuned as we monitor the progress and continue to bring you the latest insights and updates.
Additional Resources…
– Check out James Kelly’s brand here: https://www.woolly.clothing/
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