Shopify Fulfillment Going Nowhere Slow

There are a lot of rumors and reports about what is going on with Shopify's Fulfillment Network recently. Cancelling contracts, not cancelling contracts. What's going on?

Let me save you the trouble. It's not going to work at scale, and this isn't even a very hard call. Best not to pay attention to the market smokescreens.

First, in the last 10 years, great logistics talent goes to 3 places: Target, Walmart and #Amazon. For Shopify to become great at fulfillment, it would have to become exactly like the Empire it so loathes. "I don't get my Amazon parcels on time" and "I think the Target curbside experience needs improvement." said no one ever.

Second, #Shopify has no Chief Supply Chain Officer. I could end the post right here. There is even no category for Supply Chain on their jobs site. Go check yourself, I'll wait.

If the notion of having 3PL contracts or not having 3PL contracts is moving the Shopify stock, that is so puzzling to me.

Third, their strategy has changed more than once from reports telling me for years they have been essentially white-labeling a third-party solution (without publicizing this widely), to building out a fulfillment center outside of Atlanta of all places. I have a pretty good idea what I would find if I walked through that facility, and the words "best in class" would probably not be uttered.

Fourth, no one at Shopify is talking about what modern brands need from a fulfillment solution.

They are:

- Amazon FBA Prep and FBM support. Think they will do this? Me neither.

- Ability to ship pallets and case-packs to wholesale partners.

- Ability to ship parcels to consumers.

- Last-mile options. (where is the gig worker partnerships?). Amazon added store pickup to their marketplace even. Where is Shopify on this?

Fifth, We have seen enough to know it's not working. For those of you lucky enough to have watched the launch of FBA, it was simply brilliant. A watershed event in the fulfillment landscape. There was no 2 years of test and learn. Like AWS, their first launch "just worked" and it kept getting better.

Finally, Shopify did not even follow the relatively easy example of Walmart in this space. Partner with a third-party first, advertise it. I'm sure someone like Deliverr would have been more than happy to take the business.

Or perhaps VC-backed supply chain valuations are too high that they can't run the "Global-E/Affirm playbook" they have become accustomed to.

#Supplychain doesn't work without scale. Shopify is about entrepreneurs. The vast majority of entrepreneurs have low volume because they are just starting out. Don't be so hard on them, FBA wouldn't work either without riding on the rails of "Customer 1".

Tobi is having too much fun playing with his tape gun to notice, I guess.