The Ottawa-headquartered company has cancelled contracts with some firms and reduced the options it offers merchants using its Shopify Fulfillment Network (SFN), sources told Business Insider. The company told the publication it would provide an update on the service during its fourth-quarter earnings call next month. (Business Insider)

Talking point: The move will reportedly halve SFN’s warehouse capacity. While company executives previously said the volumes of orders it was handling had risen significantly in the early months of COVID-19, analysts expect the pandemic e-commerce surge to slow. (Investors appear to agree, with Shopify shares on the New York Stock Exchange down 24.9 per cent year-to-date through Thursday’s close, and plunging a further 13.99 per cent Friday). It originally announced SFN for the U.S. in June 2019, and budgeted US$1 billion to build it. But it’s yet to declare it fully open for business, with CFO Amy Shapero saying on an October 2021 earnings call that it’s “still in the product market fit phase.” Shopify may simply be shifting to a more in-house model. In August 2021, it reportedly signed a lease for a warehouse in Newnan, Ga. Still, a slow rollout has financial implications—analysts note that SFN and other planned add-on services will help the company increase its share of merchant orders.