I just want to make a note that Tobi (Shopify's CEO) has made great contributions to Rails open source ecosystem with projects like Liquid and ActiveMerchant, which he started:
- https://github.com/Shopify/liquid/commits?author=tobi
- https://github.com/activemerchant/active_merchant/commits?au...
We leverage these projects daily, so it's awesome to see his company doing so well. In addition, we're on Shopify's platform as a app developer, so his company has added a lot of value, both commercially and non-commercially to developers, not just e-commerce merchants.
Kudos to them.
I know that a lot of activity on Shopify is from ambitious but deluded people setting up dropshipping businesses. Shopify is just selling picks and shovels to a lot of prospectors in a particularly unfruitful gold rush. I'm wondering whether they'll see a contraction as the enthusiasm wears off.
I might be drinking the amazon koolaid but Shopify’s online service and physical product distribution can’t even come close to what amazon has developed. They’re not a real threat. Amazon is really at least 15 years ahead in distribution and operations. We’re using robotics to automate a ton of processes. Jeff Wilke revolutionized the fulfillment centers. Shopify’s platform mainly sells niche things at low throughputs. Amazon is about how can we sell more in the same amount of time so we can continue lowering prices to get more customers and keep selling more.
I've been working with Shopify for close to 10 years as an owner of multiple profitable stores and as a full stack developer. If you work on the custom development side you'll see a lot more successful businesses run on Shopify.
I don't see the churn rate as a big problem for Shopify. Their revenue is pretty tied into the customer's revenue and expenses, not the amount of unique subscriptions. On top of subscription revenue, they have credit card processing and shipping labels which would be higher than the subscription cost for shops with high revenue.
IMO I don't really see Shopify and Amazon as really being in the same space unless Amazon makes a real push into curation and I think that would require a radical change in how Amazon works with sellers. I see Amazon as more of a competitor to Walmart, Target, etc.
Related: Shopify and the power of platforms https://stratechery.com/2019/shopify-and-the-power-of-platfo...
Shopify is so expensive and for a small-time shop hosting and paying the shop fee eat up your first 2-10 sales easily, where is the free platform that only charges per sale?
Bigger than eBay by market cap, but much smaller by revenue.
This title is very misleading. Shopify has surpassed eBay in market cap, but is in a very different business. Same wrt amazon. Conflating market cap with market ownership is just confusing.
However, I really hope Shopify can figure out a way to make it easy to find quality sellers and replace Amazon’s dumpster fire of a third party marketplace. Trying to buy electronics or household products on amazon is a complete crapshoot these days.
I don't get it at all. In my model, Shopify spends 75% of Gross Profit on sales to simply maintain existing customer levels. It doesn't seem like customers are very sticky, so they constantly have to pay huge amounts for sales to get new customers.
So, what's the best case scenario? They go from $800m in revenue now to $5bn? Even if they don't increase R&D, that means they're profiting $500m a year. That's an 80 P/E for what I consider to be a very optimistic 6x revenue growth extrapolation. Is there some other huge business (like Facebook's untapped user data in 2012) that isn't making itself known in their financials?
eBay started out as a tool to connect you between a seller and a buyer, evolved to empower merchants, because of competition they became a landlord mall operator. Their DNA has always been to drive traffic for growth.
Amazon started out as a store to sell you a book, grew selling you other that can be stocked and packed like a book, evolved to ask others to sell too, because of competition they became a landlord mall operator. Their DNA has always been to drive traffic for growth.
Shopify gives you a dumbed down version of a selling tool. It was easy enough, paired up with Alibaba's rise, a subculture of dropshipping dropsurfing gurus selling you on how easy it is, they've now convinced most people to give it a try.
But their DNA has never been to drive traffic for growth. There's been no indication that's their strategy as they've only unveiled more tooling for owner operators.
Eventually they'll peak, run out of people wanting to give it a try and the whole thing collapses.
Shopify is more like Rovio having a hit with Angry Birds, growing rapidly, then watching sales drop 40% shortly thereafter.
Also, having down Shopify dev back in 2014-2016, their app ecosystem is a mess, more akin to a medium sized POS company's third party ecosystem.
This interview with Shopify's CEO about how the company grew / his mindset was interesting [1]. He said a lot of things that sounds similar to the author’s quotes in the article.
"Bigger" as in higher market cap.
How big are Amazon and eBay these days in terms of dollar value sold via their market places?
If eBay is anywhere near Amazon and Shopify stores outsell eBay, that would be pretty spectacularely.
Shopify stores live on their own domains, right? No reviews, no central discoverability, no nothing, correct?
I don’t know why they don’t support 3rd party payment tokenization.
Why is all the money at sellers like Amazon, and not where the real work is, i.e. shipping?
Subscription only.
Try getting my interest again when there's a publicly-viewable link.
I wish people would stop linking to paywall sites. What's the point if most of use here are probably not subscribers?
I’m kicking myself for not investing in Shopify when I saw it in the 100s this year. Given the size of my average investment I could have made a good $20k in profit. Wondering if I’m making the same mistake again. Could this be another $1000 stock?
Paywall; site wants a subscription to read the article.
But Rails doesn’t scale.
A lot of people seem to be able to read the article which is behind a paywall for me! (Quite often the case on hn)
As someone who worked developing Shopify apps (NOT a Shopifyt employee to be clear), I can attest to the incredibly high percentage of shops that evaporate from the platform on a nonstop basis.
Something like 80% of the people that would install our apps in their shops would be gone or in limbo after a couple months. (Not an app uninstall, their shops actually no longer existed.)
The charts we see from Shopify like this always say "Number of merchants" and the number climbs up towards a million, but at what point do they start excluding their delinquent/disappearing merchants? I'm not convinced they're factoring in churn.