- Shopify struck a deal with UPS gaining negotiated shipping rates — of the type that benefit bigger merchants — for its clients, ZD Net reported last week. The new alliance also adds native integration of UPS shipping, billing, and tracking services within the Shopify platform.
- The ability to negotiate rates will add to smaller merchants' ability to pay and thus charge less for shipping, making them more competitive with big guns like Amazon and Target.
- Shopify believes the deal with UPS will boost the popularity of smaller or independent merchants, solidifying their vital role in the economy.
UPS and Shopify are leveling the logistics playing field, just in time for peak season.
Previously, Shopify teamed with DHL to establish a similar shipping initiative, enabling its members to hold their own against retail giants with limitless shipping budgets and a seeming disregard for losses. Alibaba has taken a similar position, allowing for easier and cheaper means for smaller U.S. sellers to reach Chinese consumers.
Time and again, the disconnect between sellers underestimating the value of quick or even overnight shipping reveals the reason behind retail's high failure rates. While poor customer service or in-store item unavailability certainly contribute to a downturn in business, the need for speed, or the Amazon Effect, means that those who wish to compete must offer similar options.
Shopify is working hard to level the playing field, while UPS is expanding its market by encroaching on traditional FedEx clients: small businesses. Will the effort between the two pay off? Post peak season numbers will tell the tale.