What does the Company Deliverr do? (Acquired by Shopify)?

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Last Updated on January 4, 2023 by Ashish

Introduction

Before understanding the startup Deliverr, let us try to understand some basics of how the Logistics industry functions. A third-party logistics (3PL) warehouse is known as a fulfillment center is where materials delivered are taken, processed, and filled. The vendor could either receive or inspect the products before transporting them to the fulfillment center, or they can have the products shipped straight from the factory to the warehouse in order to manage inventory. 

The vendor can delegate the duties and expenses involved in warehouse management and concentrate on selling by outsourcing fulfillment. The fulfillment center is now in charge of handling inventory issues like “midships” and “mispicks,” which occur when the incorrect item is chosen to fill an order. If errors occur, the fulfillment facility pays the expenses.

Additionally, shipping and returns can be facilitated by using a fulfillment center. With the savings obtained from these price reductions, major shipping firms frequently work with fulfillment centers that see large levels of business. Returns can also be sent to the fulfillment center rather than the supplier directly. As a result, the vendor is exempt from needing a charge the client restocking fees.

Accepted participants in the program can use a network of fulfillment centers spread out throughout the United States and Canada. These fulfillment centers are made up of numerous warehouses that are either owned by Shopify or by other parties.

Transport and logistic concept, Freight shipping online, Businessman using tablet and data for global logistic network distribution on world map background, Business and technology, Blue tone.

Shopify will store their merchandise there before shipping orders to the clients of their merchants. In addition, the business will handle other supply chain tasks like inventory control, packaging, and bundling.

E-commerce product storage, packaging, and delivery are all parts of fulfillment. How you fulfill things purchased via your Shopify store is referred to as Shopify Fulfillment. To substitute any third-party logistics you now use, Shopify offers the Shopify Fulfillment Network, a whole different solution.

Every product you sell online has to go through this fulfillment process in order for your inventory to be stored appropriately, to have the necessary packaging, and for your consumers to get their orders promptly. The cost of getting those goods to your clients after checkout also depends on your fulfillment strategy.

What Is Deliverr?

Deliverr, a company that was established in 2017 by Harish Abbott, rents out warehouse space and utilizes the fulfillment divisions of those facilities to pick and pack e-commerce orders. And over a million orders are distributed each month by Deliverr via UPS, FedEx, and USPS. Shopify will increase its workforce by 400 individuals as a result of the acquisition.

World map with logistic network distribution on background. Logistic and transport concept in front Logistics Industrial Container Cargo freight ship for Concept of fast or instant shipping, Online goods orders worldwide

San Francisco-based dynamic shipping and fulfillment startup Deliverr.com provides lightning-fast product delivery for its clients, namely eCommerce brands. Deliverr’s goal is straightforward given that large online platforms like Amazon are increasing customer expectations for quick delivery at “no additional cost.” allowing “any merchant, whatever of size, to satisfy their customers with quick and affordable fulfillment.”

Deliverr competes with Amazon Prime by offering online retailers quick (1-2 day) shipment. Deliverr users are immediately qualified for Prime-like schemes like Walmart’s 2-day free delivery and eBay’s guaranteed by-a-certain-date delivery. The Deliverr initiatives provide businesses additional online exposure and boost their sales.

The organization’s commitment is to have a system of over 80 warehouses, cross-docks, and sort centers close to places of supply to decrease the incidence of miles merchandise travels and makes it more feasible to get products faster, according to Harish Abbott, co-founder, and CEO, inside an email. The business is seeing distribution network constraints become “much more acute.” Due to this strategy, Deliverr’s merchants have increased by 90% year over year.

Deliverr did see “substantial” growth in its retail volume value year over year and is on track to reach over $2.5 billion the year. The company boasts that half of the U.S. citizens live within 100 miles of a Deliverer system and that it expanded its storage and carrier infrastructure to offer one-day fulfillment services to the main metropolitan regions.

The quantity and diversity of the company’s merchant base increased at the same time that it doubled in size, opened offices all over the world, and enjoyed growth in both.

With money flooding into businesses all around the world, e-commerce fulfillment is undoubtedly in vogue. For instance, Hive, Fabrication, Sandbox, and ShipBlu were among the latest to disclose funding during the past several months. Tiger Global, a new investor, is leading Deliverr’s most recent investment. They are joined by previous investors 8VC, Activant, Brookfield Technology Partners, and Coatue.

How Deliverr Manage To Distribute Packages So Quickly?

Deliverr rents out warehouse space all around the United States, which allows them to ship your things so swiftly. The nicest part is that they stock the warehouse cabinets in each location with items that are popular there.

Deliverr offers “Fast and cheap fulfillment [that allows you to] Speed the Walmart, eBay, Amazon, Shopify, and Wish sales,” according to its website, which sums up what it has to offer.

Deliverr : Business postal packages
Business postal packages

How Deliverr Achieved Affordability? 

Because Deliverr warehouses your products in different parts of the country to save on delivery expenses, their business model is referred to as being cost-effective. Customers of Deliverr can also pay a single fixed rate for its services (more on this later).

Deliverr: About the Company

With the launch of its Purchase with Prime program earlier, Amazon largely offset the benefit of Shopify’s acquisition of Deliverr. A select set of FBA merchants can now offer Prime shipping via their own online storefronts thanks to this service.

The program will eventually be extended by Amazon to businesses that don’t utilize its fulfillment service and to those that don’t sell on its platform.

Regardless matter how and where merchants choose to sell their goods, Shopify and Amazon will now face off for the same merchants.

Simply sign up for a free Deliverr account, link your online stores (such as eBay, Shopify, etc.), and inform Deliverr of whatever you want to ship. Deliverr will then choose which of its facilities to send it to. Note that you are free to send any quantity of stock to Deliverr’s warehouses. Deliverr then picks, packs, and sends your products to your clients as orders come in.

There will be positive and negative elements to take into account, just like with any e-commerce fulfillment service. After doing a lot of investigation, we discovered that Deliverr has a few significant flaws that might potentially ruin the product, along with some respectable qualities that only a select group of people were satisfied to continue using. 

Financial Data 

Despite being 22% more than the same time in 2021, Shopify’s Q1 2022 earnings of $1.2 billion fell short of analysts’ expectations of about $1.25 billion.

Online shopping and payment, Man using tablet with shopping cart icon, Digital marketing, Banking and finance on dark blue background.

In comparison to the first quarter of 2021, when Shopify had net revenue of $1.3 billion, or $9.94 per unit, the first quarter of 2022 saw a net loss for the company of $1.5 billion, or $11.70 per share. As a result, Shopify’s stock declined 14.7% to $413.64, representing a 70% decrease for the year 2022.

By purchasing Deliverr, Shopify is betting on fulfillment to boost sales and assist in its return to profitability.

When the distribution network is unstable and there are inventory limits, efficient fulfillment and next or two-day shipping are crucial differentiators.

According to Shopify’s forecast for 2022, year-over-year revenue growth would be minimal during the first quarter of this year and greatest during the final quarter.

Nearly all of the big e-commerce platform operators have admitted that they won’t be able to maintain the rapid growth rates they had at the height of the pandemic. And the total funding amount is $490.9M. 

Acquisition By Shopify

Deliverr has recently been acquired by Shopify. A fulfillment firm called Deliverr connects to online stores including Amazon, Walmart, and eBay.

All of this is a part of Shopify’s ambitious fulfillment goals. The e-commerce platform has gradually entered the fulfillment market over the past few years, first by purchasing the warehouse automation technology supplier 6 River Structures in 2019, then by changing its fulfillment strategy and severing ties with many of the storage facilities it had previously teamed up with, but now with the purchase of Deliverr.

While the web has leveled the playing field for many aspects of retail, according to Aaron Brown, CEO of Shopify’s logistics division, logistics and distribution networks remain difficult. “We’re enthusiastic about Deliverr since we believe we can assist independent retailers with issues relating to scaled-up freight, distribution, and fulfillment. Deliverr’s software is designed to provide network visibility throughout the whole supply chain. For retailers, I believe it will transform the playing field, said Brown.

Ottawa, Ontario, Canada – August 9, 2020: Shopify sign on their headquarters building in Ottawa, Ontario, Canada on August 9, 2020. Shopify Inc. is a Canadian multinational e-commerce company.

According to Aaron Brown, CEO of Shopify’s logistics division, “alongside Deliverr, Shopify Fulfillment Network (SFN) will enable millions of independent businesses, both on and off Shopify, a final logistics platform to unleash fast and easy fulfillment .” “It gives me great pleasure to officially welcome Shopify’s approximately 400 exceptional Deliverr workers. 

Their merged team improves SFN’s capacity to manage merchant’s inventory from “port to porch” as goods enter domestic ports, move to and via the network of warehouses, are dispersed across retail channels, and finally reach the doorstep of the customer. 

SFN will provide merchants with each shop for their logistical needs, from initial inventory reception through smart redistribution, through to rapid delivery and simple refunds, with the inclusion of Deliverr’s world-class technology, talent, data, and scale. Benefits to merchants include

Multiple-Channel Inventory Control 

For different sales channels, such as Amazon, eBay, Walmart, and networks like Google, Facebook, Instagram, and TikTok, merchants will have a single location to browse and ship their inventory.

Synchronization Of Stock Supply And Demand 

Using proprietary software that anticipates where client orders are sure to appear, retailers will have their inventory in real-time placed near demand and deliver products from the nearest distance warehouse.

Flexible Independent Logistical Services 

Merchants can combine and match services needed like storage, shipping, stock preparation, and refunds to find the best fit as they expand, irrespective of whether they use SFN for fulfillment.

Shop Promise

Shop Promise is a brand-new service that guarantees retailers have complete control over their goods, business statistics, and customer information while giving customers trustworthy next-day and two-day delivery alternatives from all around the US. Shop Promise takes use of shipping providers and an expanded partner network.

Omni channel technology of online retail business. Multichannel marketing on social media network platform offer service of internet payment channel, online retail shopping and omni digital app.

Although Shopify thinks the expectations behind all these forward-looking comments are fair, they could end up being wrong, and readers could be confident that the results will pan out as expected. 

Numerous factors, along with some risk factors, some of which are outside of Shopify’s control, but were not restricted to risk factors divulged previously and periodically in Shopify’s filings with the U.S., could cause actual results to deformations from those predicted in the forward-looking declarations. The Canadian provinces and territories each have their equivalents of the Securities & Exchange Board and securities commissions.

Key Features Of Deliverr

Here’s a quick rundown of Deliverr’s most notable features because we’ve already discussed some of its key features in our price and introduction sections:

Deliverr’s website categorizes its “features” and “solutions” into different groups based on the online stores, e-commerce stores, and social media accounts that you are using to market your goods.

The following are the systems that Deliverr integrates with:

  • Amazon
  • Walmart
  • eBay
  • Shopify
  • Wish
  • Facebook
  • Google

To best match, and your selected sales channel, each of the aforementioned areas provides a somewhat different selection of basic features.

Aimed At Increasing Conversions

You can use your website and sales funnel to display “2-day delivery” badges.

Made For Your Brand

Your shipping badge can be made to match the colors of your business and placed wherever it looks the best on your online marketplace.

Reliability

You can trust Deliverr to do the task because if an order will not arrive on time, the customer will receive $5 in Deliverr credit. It is not surprising that eBay sellers witnessed a 28% rise in sales of health products, a 112% growth in revenue of art supplies, and a 45 percentage-point increase in sales of cosmetics because a dependable delivery service gives customers confidence.

Logistics, supply chain and delivery service concept : Fork-lift truck moves a pallet with box carton. Van on a laptop computer, depicts wide spread of products around globe in ecommerce popular era

As opposed to this, the main advantages of selling on websites like Amazon, Walmart, eBay, or Wish are as follows:

Filter Addition 

Deliverr lets you add a delivery tag to your goods, which elevates your things into search with fewer competitors and gives shoppers the choice to filter items for “free and fast shipment.” A percent of web marketplaces give buyers this option.

Buy Box Importance

The fast-shipping badges from Deliverr increase the visibility of your products in the marketplace. Both eBay and Walmart offer projects like this, but you’re more certain to profit from Deliverr. This can earn your products “highlight spots,” such as space inside the “purchase box.”

Enhanced Search Results

Fast shipment is important to buyers, and marketplaces are aware of this. Items with rapid shipping tags thus frequently appear better in search engine results. You’re more certain to get more awareness and, as a result, higher conversion rates if you offer quick delivery timeframes.

Deliverr Warehouse Locations

Whatever digital commerce platform you choose, Deliverr offers quick and free 3-day delivery across over 95% of your customers in the US. They accomplish this by strategically dispersing your merchandise throughout many areas, such as:

  • California
  • Texas
  • Missouri
  • Pennsylvania
  • Ohio
  • Jersey, New
Businesswoman with a digital tablet showing and talking with male worker in distribution warehouse. Manager working with foreman in warehouse checking stock levels.

Each of Deliverr’s warehouse associates has undergone a rigorous screening program to ensure they can process at least half a million orders per day and have access to 15,000 sq ft or more of storage space.

Analytics Control

The administrator will receive clear information about the business, such as the use of assets, agent performance, shipping information, etc., by using data analytics management. Campaign management software makes it easier for the administrator to keep data automatically because they no longer need to perform manual tasks.

Feedback

After the product has been delivered, the agent will receive an electronic delivery proof and the customer’s e-signature. The administrator can then determine whether the service delivered the item to the correct client. Customers can provide feedback on agents, products, and other topics. Administrators can review client feedback to develop customer connections and make the necessary corporate improvements. Customers supply a wealth of information regarding your service, and collecting client feedback is always beneficial for growing your business. 

Pros And Cons Of Deliverr

With what you now know, you might be thinking about using Deliverr’s fulfillment service for your online store. We’ve created a quick pro-con list to assist you in making an informed choice. Hopefully, the following may assist you in determining whether this service is appropriate for your company:

Pros:

  • Deliverr provides a reasonable and straightforward price structure.
  • 95% of Deliverr’s clients are qualified for the 2-day shipment because of the company’s strategically placed warehouses throughout the US.
  • Their algorithmic strategy enables retailers to strategically distribute their inventory around Deliverr’s network of fulfillment warehouses.
  • Fast-shipping tags improve the visibility of your goods in search results.
  • Deliverr works with Shopify in addition to all the other major online markets 
  • Deliverr provides prompt and trustworthy fulfillment. 
Deliverr : Distribution warehouse
Deliverr: Distribution warehouse

Cons:

  • Deliverr doesn’t provide many possibilities for branding.
  • You don’t have much management over the fulfillment process with Deliverr.
  • There is no global fulfillment 
  • Customers have complained that Deliverr’s customer service is slow to respond, typically taking 1-3 days.
  • You have no choice but to set up employee accounts. Due to this, delegation is challenging.
  • Deliverr doesn’t deal with or manage returns.

How Does Deliverr Works?

You will require an application to begin using the Deliverr Fulfillment Network. You can start using the fulfillment network provided Shopify approves the store and shipment information. Everything may be managed via your Deliverr admin panel, which is a simple, direct, and to-the-point method.

Let’s concentrate on the most crucial aspects of the procedure to help you grasp this in more detail.

  • You will be in charge of deciding which goods the Shopify Fulfillment Network will send. You must obtain approval for these products.
  • Working with Deliverr to decide on the packaging, packing, kits, inserts, etc. will be a chance for you.
  • Sending your goods to Deliverr partner sites will be your responsibility.
  • As soon as you start making sales, SFN will allocate your orders to the other fulfillment associates so you can choose, pack, and ship your goods.
  • To check inventory, set alerts, restock, etc., use Shopify’s admin.
Worker hands holding tablet on blurred warehouse as background

The Deliverr system is not complicated, which is how it should be. It is really easy. You don’t want your clients to have trouble using the tools and applications. You will be able to access your analytics in the dashboard, just like we do for users here at Thill Inc. It won’t be as good as working with a third-party logistics provider, but it can be helpful if you really need a lot of judgments made for you.

Once everything has been approved, Deliverr is in charge of managing the daily fulfillment operations. This comprises;

  • Receiving and processing shipments
  • stockpiling goods
  • If orders were being picked up as sales came in, the sales channel would not be important.
  • You package orders and ship them to each distribution facility in either standard containers or custom packaging.
  • Automating the transmission of tracking orders, carriers’ statistical data, and shipping purchases
  • Inventory control, comprising guidelines for reallocation, replenishment, and minimum stock levels.
  • Processing of refunds and exchanges, including product verification so that it can be re-added to your current inventory.
  • Deliverr makes e-commerce fulfillment for online merchants incredibly simple. The business offers prompt and reasonably priced services.
  • Additionally, Deliverr’s value offering is superior to that of certain leading players in the market because of its straightforward price structure.
  • In the same way, its uncomplicated method of service delivery distinguishes it as a pioneer in the field of e-commerce fulfillment.
  • All you need to do to get began is integrate Deliverr’s system with your web retailer or shopping cart.

Deliverr Options & Pricing

All of your fulfillment costs (shipment, picking, packaging, boxing, and mailing) are combined into two fees that Deliverr defines as “Amazon-like” and “easy, transparent, and inexpensive.”

  • Fulfillment
  • Shipping

Let’s examine this in more detail:

Deliverr : The online web services
Deliverr: The online web services

Fulfillment

The cost of fulfillment by Deliverr is calculated per unit and varies according to the size, weight, and quality of service of the item. This covers the price of the Deliverr picking up the item, delivering it, handling orders, paying for boxes, and handling.

Three order fulfillment rates are available:

  • Regular Delivery (5-7 days)
  • three-day delivery
  • 24-hour delivery

Prices will start at $3.99 per piece, and as we just mentioned, fulfillment costs (including delivery) depend on the size of the item. To illustrate this, the Deliverr website shows the following items:

Average Costs

  • A tiny thing like a 1.5 oz. phone cover costs $3.99 per unit.
  • An item like whey protein costs $5.95 per unit and weighs 1.25 lbs.
  • $10.21 per unit for a heavier item like a coffee shot weighing 12 lbs.
  • A bigger unit, such as a 17-pound computer monitor, costs $17.98 per unit.

Storage

The cost of storage with Deliverr is likewise calculated per unit. The cost of storing goods varies according to their size, precisely how many sq ft the unit occupies, and how long you intend to keep the goods in storage. Retailers receive discounted prices for seasonal and lengthy storage.

Let’s look at the prices of storing the identical things mentioned above:

  • Phone case utilizing 0.02 cubic feet costs $0.015, or $0.048 from November to December from January through September.
  • Using 0.07 cubic feet of protein powder from January to September will cost you $0.051 or $0.168 from October to December.
  • Using a 0.62 cubic foot espresso machine, the price is $0.447 from January to September, or $1.488 from October to December.
  • 1.50 cubic feet of computer monitor usage costs $0.108 from January to September and $3.60 from October to December.

This should give you a general sense of what you may expect to pay with Deliverr, but if you’d want more specific information, the Deliverr website provides a price calculator. This is useful for calculating your costs before enrolling. However, if you’re interested in the specifics, as every entrepreneur ought to be, you must register (free). After that, you can input your catalog to get a price breakdown for each line in “less than five min.”

Workers processing boxes on conveyor belt in distribution warehouse, blurred motion.

Deliverr Customer Support

You can get in touch with Deliverr’s support staff online if you experience any problems. On the site, you can send a contact demand, use the chat feature, or peruse the support section. Their online knowledge library features frequently asked questions (FAQs) on six major subjects, including how to get started, inbound deliveries, inventory, orders, rapid tagging, invoicing, and reports.

To assist you with onboarding, responding to questions, setting up Deliverr, inbounding your goods to our facilities, activating fast tags, and trying to make sure everything is configured properly, you will be assigned a dedicated team or account executive. Client Service Management takes over the management of your account once your 1st order is received and fulfilled (through Deliverr).

Deliverr deals with any issue you could have with its warehousing partners on your behalf. However, since they don’t have their own facilities and instead rely on 3rd parties for all of their fulfillment needs, it can take them longer to respond.

Deliverr Vs Amazon FBA

Both of these platforms are somehow similar in any context, but here are categories in which Deliverr turns out to be more practical than Amazon FBA. 

Simple pricing

All-inclusive pricing is similar to that of Amazon, with no long-term commitments or other expenditures that aren’t disclosed upfront. View the prices for your purchases right now

Prime Badging

Promote quick shipping throughout marketplaces with schemes like Walmart 2-day delivery, Wish two days delivery, and more by enabling 2-day badging on your own DTC site or Shopify store

Seamless Experience 

In less than 2 minutes, set up an account, connect any distribution platform, and take advantage of Deliverr’s seamless automation as it syncs with your networks. 

Deliverr: Delivery package FAQ

FAQ

Do Deliverr offers personalization?

Deliverr currently doesn’t offer any package customization choices, and users are unable to ship promotional items or mailers along with their packages. Deliverr uses only neutral packaging. One of the causes Deliverr can maintain reasonable prices and quick response times is due to this.

Does Deliverr handle returns?

Presently, Deliverr does not handle or validate. An item that a consumer returns is discarded rather than put back into your selling inventory. The business might pay for this to happen. Returns must be handled directly thru the third-party service if they are crucial to your company strategy. 

Does Deliverr offer me Product Insurance?

Products kept in Deliverr’s network of fulfillment centers are not insured. This is described in its terms and conditions. Its maximum stock loss liability is capped at 5% of the entire sales revenue one or month’s worth of typical storage costs, whichever is less.

How long would it take to get Deliverr up and running?

With Deliverr’s order fulfillment services, getting started is easy. You may get going right now by linking your Deliverr account to online sales platforms. You can have your goods shipped within eight days.

Futuristic Technology Retail Warehouse: Worker Doing Inventory Walks when Digitalization Process Analyzes Goods, Cardboard Boxes, Products with Delivery Infographics in Logistics, Distribution Center

How does Deliverr Guarantee two-day shipping?

Deliverr collaborates with US warehouses to enable users to send things to a variety of locations in a planned manner. Almost 95% of US clients may then attain shipment times of under three days! The program helps sellers distribute inventory to the locations where there is the highest demand for your goods using predictive algorithms.

Does Deliverr provide bulk fulfillment services?

Deliverr currently exclusively deals with fulfillment for direct-to-consumer orders. By requesting a removal, which would be paid using the separation fee, larger requests can be executed. Deliverr does not provide any further labeling or procedures for removals.

Conclusion 

Fortunately, Deliverr isn’t the only fulfillment service available that is inexpensive and simple for a business owner or novice to use. The Shopify Fulfillment Service is free to use and provides round-the-clock customer service.

Thanks for reading our Deliverr review. Deliverr offers a great service for merchants who need to manage several channels, even though it may be restrictive to some. Check out this link if you’re worried about how COVID-19 has affected Deliverr’s business.