Today’s Pickup: Shopify’s fulfillment strategy ‘validated’ by COVID-19

A warehouse worker with a robot at a Shopify fulfillment facility.

Good day,

Shopify had its single-largest increase in merchants joining its fulfillment network during the first quarter, the company said today as it reported financial results.

Canada-based Shopify did not disclose any specifics about the growth of its fulfillment business. But executives made clear that its push into fulfillment takes on renewed importance as COVID-19 accelerates brick-and-mortar stores shift online.

“I think COVID-19 validates the decision to go into fulfillment,” Shopify Chief Operating Officer Harley Finkelstein told financial analysts. 

Shopify reported a 47% increase in revenue during the first quarter of 2020 compared to a year earlier. The company generated $470 million during the quarter but lost $31.4 million. 

A significant portion of Shopify’s costs includes its $1 billion five-year rollout of the Shopify Fulfillment Network. Launched in 2019, the largely U.S.-based network utilizes third-party warehouses to allow its merchants to maintain inventory and ship to customers. 

Did you know?

Twelve companies received top honors in FreightWaves’ Shipper of Choice awards sponsored by Transflo. The winners emerged from a pool of nearly 400 nominees. “This is an important award because it reflects on the positive nature of the shipper to carrier relationship,” FreightWaves CEO Craig Fuller said. “It really focuses on things shippers are doing right.”


“If diesel’s not flowing, if diesel’s not being consumed, then you know that U.S. freight volumes are slowing.”

– Werner Enterprises CEO Darek Leathers discussing the state of U.S. freight during his keynote talk during FreightWaves LIVE @HOME.

In other news:

Low rates ‘one-way ticket out of business’

Experts warn that plunge in spot rates will take some carriers and owner-operators out of service permanently. (Fox Business)

U.S. trade deficit jumps 11.6%

The U.S. trade deficit widened to $44.4 billion in March as the COVID-19 pandemic pushed down imports and exports. (The Wall Street Journal)

Carrier switches from oil to ag 

A trucking company in North Dakota has shifted from hauling oil to agricultural products as COVID-19 hit the demand for petroleum products. (AG Week)

Massachusetts bill would toughen CDL rules

Legislation in Massachusetts would place a higher bar for obtaining commercial driver’s licenses than U.S. federal requirements. (Land Line)

Final thoughts:

Shopify plans to scale its fulfillment network in 2021. Key to the strategy – automated robots to assist in warehouse operations. The technology came from its 2019 acquisition of 6 River Systems

Shopify’s warehouse robots are named Chuck. The company said they are getting “bigger, stronger and easier to use.”

Hammer down, everyone!