Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
The U.K. and Switzerland facilities are designed to help web retailers sell in Europe.
U.S. e-commerce order fulfillment company Webgistix Corp. this month opened two distribution centers in Bedford, U.K., and Zurich, Switzerland. The move is designed to help its U.S. and other e-retailer clients more easily fulfill orders for consumers in Europe.
The centers provide e-retailers with depots for deliveries to consumers within the U.K. and all countries in the European Union. Fulfillment fees range from $2.00 to $5.00 per order, Webgistix says. The cost covers fulfillment, including materials, labor and order processing. Carrier shipping fees are extra. However, Webgistix says it can negotiate discounts with many carriers because of the large volume of products it ships.
The company's service in Europe is designed for mid-size retailers shipping 2,000 to 25,000 orders per month, Webgistix says. "We're giving mid-size retailers the same logistics power as large retailers through our global e-commerce network," says Joseph DiSorbo, Webgistix CEO.
Webgistix won’t name any of the retailers using or planning to use the new centers, except to say it is in talks with dozens of customers about using the two centers.
Headquartered in Las Vegas, Webgistix works with e-retailers around the world, including those in the United States, Australia and Canada. Its retailer clients include Coffee for Less, No. 462 in the Internet Retailer Top 500 Guide, Global Herbal Supplies and LadderGolf.com.
The company uses its web-based fulfillment software called SmartFill, which integrates with several online shopping carts, to enable e-retailers to outsource their order fulfillment to Webgistix. Online retailers that sell to consumers via mobile devices can also integrate their mobile sites and apps with SmartFill software for order fulfillment.
With demand for its distribution service increasing in Europe, the company is planning to open similar centers in Poland and the Channel Islands in the second quarter of 2013. The Channel Islands, are a small set of British Islands off the coast of France that retailers can ship from without paying tariffs. "Our rapidly expanding clientele makes it clear that a global e-commerce order-delivery platform is a very compelling proposition," adds DiSorbo.
Webgistix isn’t the only fulfillment provider helping U.S. e-retailers crack the European market. Germany–based Hermes—a vendor specializing in supply chain management for large retailers and brands—is looking to attract more U.S. retailers who want to sell to Europeans. The company is offering U.S. retailers access to the European market through its logistics and fulfillment services that serve countries across the continent. It also recently launched ParcelShops in the U.K. and Russia that enable consumers to pick up their packages in retail stores rather than have them delivered to their homes. Those new ParcelShops are in addition in to the already approximately 14,000 Hermes ParcelShops in Germany and 1,500 in Austria.
Hermes already works with some U.S. retailers to help them manage overseas sales, including QVC and Guthy-Renker. QVC says it has around 6 million European customers. Guthy-Renker operates a distribution center in the Netherlands, where it uses Hermes to ship its products to customers in Germany and Austria.
“Hermes is now in a position where we can offer our wide range of services to American retailers—services that include sourcing and quality control, international transport and warehousing, fulfillment and home delivery,” says Hanjo Schneider, CEO of Hermes Europe. “We estimate that of 740 million Europeans, 364 million regularly use the web looking for online shopping offers around the world.”
In 2011, business-to-consumer e-commerce in Europe grew 18.2% to an estimated 200.5 billion euros ($259.5 billion) from an estimated 169.6 billion euros ($219.5 billion) a year earlier, according to the Centre for Retail Research. That double-digit growth in online sales is remarkable given Europe is in a recession. In the U.K. alone, gross domestic product has fallen in five of the last seven quarters. Total retail sales were up only 1.6% year over year in June, and the country's economy shrunk by 0.7% in the second quarter, according to the U.K. Office of National Statistics.