E-Commerce Startup Takes Aim At Amazon With Purchase Of UPS Subsidiary

Logistics company Stord is beefing up its e-commerce footprint in a bid to compete with Amazon, buying a UPS subsidiary it says enhances its partnership with the shipping giant.

Logistics Company Stord Announced It Purchased Ups-Subsidiary Ware2Go As Part Of An Effort To Increase Its E-Commerce Footprint.

The acquisition of delivery company Ware2Go adds 2.5M SF of fulfillment centers to Stord’s network of 13 facilities in North America and Europe as well as 70 partner sites around the globe, the company announced in a release.

Atlanta-based Stord plans to offer smaller businesses looking to bypass Amazon’s Prime platform the infrastructure needed for checkout and fulfillment services. Stord founder Sean Henry told CNBC the UPS deals will help the startup “level the playing field” as it looks to compete with Amazon.

“The hardest problem for all these independent merchants across the rest of the internet and trying to compete with Prime is really scale,” Henry said. “Logistics is still a physical world where you need a lot of packages, a lot of inventory spread very close to a lot of consumers to be able to offer that level of rapid delivery.”

Terms of the acquisition weren't disclosed.

Despite the nation's ever-evolving tariff picture creating uncertainty throughout the freight and logistics markets, Henry said the disruptions could increase use of Stord's platform.

“A lot of disruption tends to drive a lot of volume onto our platform because these brands realize they can’t really combat this themselves,” Henry said.

The UPS deals follow similar acquisitions Stord made last year. The 10-year-old company bought freight and logistics platform ProPack Logistics, Pitney Bowes' e-commerce fulfillment business, and direct-to-consumer fulfillment provider Fulfillment Works.

Henry started Stord at age 18 after winning a Thiel Fellowship. The company’s backers include Peter Thiel’s Founders Fund, Kleiner Perkins, Strike Capital and Franklin Templeton.

He credits lessons learned from Thiel with helping drive Stord’s strategy.

“If we are the one who’s building our own technology in harmony with our operations, from every stage all the way through the cart … it’s gonna be really hard for others to keep up,” Henry said.

The deal with Stord comes less than a month after UPS announced plans to cut 20,000 jobs and close 73 leased and owned buildings by the end of June. The shipping company also said it would cut its low-margin parcel business with Amazon by around 50% earlier this year.

Amazon isn't waiting to be overtaken by competitors. The e-commerce behemoth said earlier this month that it would spend $4B to triple its network of rural distribution hubs to increase its deliveries by 1 billion packages across 13,000 ZIP codes.

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