Shopify will upgrade its fulfillment network to enhance seller competitiveness! Driving stock price recovery!

It is learned that on January 24, Shopify announced that it will upgrade and change its fulfillment network (SFN) to enhance the competitiveness of Shopify sellers with large retailers. Since the changes will not reduce production capacity, Shopify's stock price will rebound.

Shopify said it has informed warehouse partners and sellers that warehouse capacity will not be reduced as a result of the proposed changes. A fulfillment network is essentially a network of fulfillment centers that allow sellers to ensure timely delivery and reduce shipping costs. In addition, Shopify is also considering offering two-day delivery at a lower price and providing easy returns for U.S. shoppers.

Shopify shares rose 7% on Jan. 24 following the announcement. They fell nearly 9% to an 18-month low following reports last week that Shopify was terminating or reducing contracts with warehouse and fulfillment partners.

Shopify's stock has been on a roller coaster ride since the Covid-19 outbreak, with shares soaring 237% between 2019 and 2021, making it the third most valuable company in Canada.

Shopify provides the infrastructure for retailers to build online stores and generates revenue primarily through subscription services and seller services. Wall Street is concerned that the changes could mean heavy investments in Shopify's fulfillment network and a shift away from a capital-light model.

Editor ✎ Estella/

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