If you keep an eye on industry news at all, you may have heard about these two recent stories. These articles both detail the acquisition of a 3PL provider, but each acquisition was executed for a different reason. Let’s examine the differences here and the likely outcomes of each.
Shopify’s $2.1 billion acquisition of an ecommerce fulfillment startup was done in order to create a vertically integrated company. This will allow customers to shop their site and make purchases on Shopify, and the product will then be shipped from a Shopify facility, effectively keeping everything “in-house.” This acquisition should allow the company to not only provide shoppers a more stream-lined experience and quicker delivery options, but also create cost efficiencies for Shopify, a benefit we hope will be passed on for the customer to share in as well.
By contrast, in Ryder’s scenario, the expansion results in increased storage and fulfillment capacity, which is a service they already offer. This should provide their clients with more location options, but the benefit lies more directly with Ryder. That’s because it allows the company to control an increased percentage of the total available storage and fulfillment capacity.
I anticipate that both acquisitions will provide the acquiring companies with increased transactions and, therefore, increased revenue. But the take away I’m focused on is that not all acquisitions are executed in the same manner or to serve the same purpose, even if the end goal is the same. I’d also be interested in seeing more detail provided on how acquisitions like these impact the consumers who utilize their services and/or products. Sometimes the impact is obvious, which I believe to be the case with Shopify’s acquisition. However, in Ryder’s case, it isn’t as clear as perhaps it should be.
Let me know your thoughts in the comments.