Why Shopify Is Investing Tons of Money in a Low-Margin Opportunity
At this point, it's no secret: E-commerce platform company Shopify (NYSE: SHOP) wants to go toe-to-toe with top competitor Amazon. And to do this, it needs to enhance its shipping capabilities. So on one hand, it's obvious why Shopify is investing tons of money in logistics.
On the other hand, logistics for shipping and fulfillment is believed to be a low-margin opportunity -- precisely what companies should avoid. But for Shopify, investing in its logistics infrastructure is more than just competing with Amazon. And it has higher potential than what first meets the eye, as we'll see.
For proof that it's going all-in on logistics, look no further than Shopify's $2.1 billion acquisition of Deliverr last year. That's a lot of money to drop on what many analysts label as a low-margin opportunity.
Source Fool.com
