Why I yawned when I heard about Shopify’s $1bn fulfillment plans
So a WSJ news article, “Shopify’s Clicks Needs More Bricks” popped up in my feed the other day and I thought to myself…”yeah.. whatever,” and I moved onto the next article. But I decided to make a short article about why i reacted this way.
You see, Shopify had already announced plans back in early 2020 that it was going to put $1bn into its fulfillment network (article). And at that time I was really impressed and took it seriously. But now, after their stock price has dropped 25%+, they’re saying once again that they will invest over $1bn in their own warehouses (article). But this time i’m not excited at all…. like the quote, “Fool me once shame on you. Fool me twice shame on me.”
The reason for this is simple…. They are still lightyears behind Amazon’s fulfillment capability
You see a little while ago I was shopping around 3rd party WMS’s for a customer i was helping and came across Shiphero. I did a demo with their team and asked them questions on the functionality. And afterwards i was thoroughly unimpressed.
It was a WMS that was built for small merchants that perhaps ran a small, un-automated warehouse. It had no concepts like zone picking, consolidation zones, etc. Things that the big guys like Amazon and Alibaba implemented in their fulfillment networks like a decade ago.
And despite all of this the Shiphero team mentioned that they were being used by Shopify’s fulfillment network. And that they had in fact turned down an offer to be purchased by them, which is validated in this article “Cofounders turn down Shopify Acquisition”.
And my reaction was like “What?? Are those Shopify fulfillment guys idiots?”
I mean how can they even think about using such an unsophisticated WMS and have press articles written about how they’re going to threaten Amazon’s fulfillment capabilities. It’s an absolute joke. I’d worked on the WMS at Lazada (which used Rocket Internet’s WMS), I’d worked on the one at Alibaba(Cainiao’s), I’d seen the one used by Wayfair (a customized version of ‘Highjump’) and at Ozon (big Russian ecom), and they were all sophisticated WMS’s. They could potentially outbound 100k+ parcels from a warehouse in a day and were optimized for highly efficient operations. This Shiphero crap would probably struggle at 5k. And the fact that Shopify’s team even considered it.. shows that they have some real knuckleheads in their senior ranks.
