
Shopify is processing over $260k per minute right now - MichaelApproved
https://incoming.shopify.com/
======
rvdm
As someone who has dedicated the last few years of his life building a dev /
design shop around Shopify, seeing these kind of numbers makes me very happy.

Looks like we placed our bet on the right horse.

imho xal / Tobi should get far more recognition for what he built. Shopify is
really quite remarkable and in a league of its own.

Curious if they'll ever beat Amazon / Alibaba volume.

~~~
mh8h
Amazon sold 426 items per second Christmas 2013. Their average order value in
2012 was around $47. Assuming the average value to be the same, it works out
to around $1.2m per minute.

~~~
cstejerean
If the average order value is $47, for the average item value to also be $47
it would imply the average order size is one item. That seems highly unlikely.

------
MichaelApproved
They're up to $274k/minute. That's $16.5 million/hour. I wonder how Cyber
Monday will do compared to Black Friday.

~~~
pfarnsworth
Cyber Monday is a myth. The highest shopping day online is about 2 weeks
before Christmas, usually corresponding to ensuring shipping arrives before
Christmas.

~~~
PaulRobinson
I work in retail e-commerce in the UK.

Sorry, but you're just outright wrong.

Cyber Monday has set sales records every year for 3-4 years in a row.

Why? It's often been on, or very near, the last payday before Christmas for
people on monthly salaries.

------
westiseast
Not to piss on anyone's parade, but for comparison, Alibaba (Tmall and Taobao,
via their own Alipay platform) did about 50bn RMB of sales in the first 2.5hrs
of this years 11.11 sales festival.

That's roughly US$50m a minute. In the first hour of the promotion they did
about 2/3rds of that volume, which is insane.

------
patmcguire
When I saw the live stream, the first question I asked myself was: I wonder if
they're filtering pornographic products and sex toys from that feed?

The answer is no.

------
ben_jones
Somebody in ops is shitting bricks right now. Heart goes out to you
brother/sister.

~~~
xal
This is the production engineering pod right now:
[https://twitter.com/tobi/status/802160212249604096](https://twitter.com/tobi/status/802160212249604096)

~~~
moyta
0_o Why so many employees? In the context of the volume you do I don't see how
you'd turn a profit with that many employees unless you get the tax credits
other francophone software groups like Logivision get and more.

~~~
kennywinker
For context, shopify has pretty high monthly fees as well as taking a cut of
sales. Last I saw they had over 200,000 shops, minimum $30/month (up to $300)
means at LEAST $6 mil/month from monthly fees, plus some percentage of the 3.8
billion/quarter gross sales they process... whatever they get to keep after
paying strip and the credit card companies. Even a half a percent means $19
million per quarter.

So if you are a startup, growing fast, and bringing in well over
$12mil/month... a lot of employees makes sense.

~~~
xal
> Total revenue in the third quarter was $99.6 million

[https://press.shopify.com/releases/shopify-announces-
third-q...](https://press.shopify.com/releases/shopify-announces-third-
quarter-2016-financial-results)

~~~
zump
Wow. Internet startups FTW.

------
gaving
Neat D3 based globe component, don't suppose the source is anywhere?

~~~
starik36
I'd like to know as well. Cool ASCII art in the Console.

------
Buetol
I find this page very misleading, only the top-right counters are correct. The
products are just randomly choosen from random shops as seen by the function
name in the code: `fetchAndDisplayRandomProducts`.

EDIT: I was wrong, see response in the comments

~~~
bnmrrs
Hey! The products actually are recently sold by merchants who opted in to be
featured! We populate the first 5 and then new ones come down through the
websocket connection

~~~
jeromegv
I'm a Shopify store owner, how do I opt-in to be featured?

~~~
bnmrrs
If you log in to Shopify you'll notice a card on your admin home that says
"Reach a wider audience during Black Friday and Cyber Monday". That card will
give you more information and allow you to opt in.

------
matco11
Woa! I wonder what this chart would look like for Amazon

~~~
xal
higher, but not much much higher. A lot of small things combine into something
quite big!

~~~
base
Amazon sales in 2015 were $107.01bn, so let's say they sell 1bn on Black
Friday. This would be around 300 times the numbers shown.

~~~
burke
I don't understand how you're calculating this. I think you missed a couple of
zeroes?

If you take that $260k/minute number and assume it's true for the whole day
(clearly it won't be overnight, but bear with me), that's (260,000 * 60 * 24
=) $374M. A third of a billion, a far cry from 1/300.

~~~
base
You are making your calculations based on the peak minute of the day, I'm
checking now and it's around half that and it's middle of the day in the US. I
imagine during the night is several times less than 260k.

~~~
burke
Of course, but not 100x less. Amazon's number is definitely substantially
higher, don't get me wrong, but 300x is just not right.

~~~
base
I underestimated Amazon sales on my initial comment, it's around 3bn:
[http://fortune.com/2016/11/25/black-friday-online-
sales/](http://fortune.com/2016/11/25/black-friday-online-sales/)

The numbers are big but far from giants like Amazon and Alibaba:
[http://www.cnbc.com/2016/11/11/singles-day-news-alibaba-
pois...](http://www.cnbc.com/2016/11/11/singles-day-news-alibaba-poised-to-
smash-records-at-worlds-largest-online-shopping-event.html)

------
knes
Is this actual realtime data or estimations updated once in a while and
incremented on the client?

Either way, looks neat (and some crazy numbers)

~~~
bnmrrs
Actually real time streaming over a web socket.

------
claudiug
shopify is still written in rails? :)

~~~
richardlblair
Absolutely!

~~~
claudiug
this is really nice. For all the news that you hear about ruby and rails, that
is slow, that is bad, that everyone leave the language. I found it really
nice. I do follow and see all the video conf regarding ruby, and I do hope
that next year, jruby will be 3 times faster, and jruby+truffle will be able
to run normal ruby gems. As for ruby 3, to be 3 times faster, for that we wait
and hope

~~~
joering2
I'm sorry to be this guy, but what a simple checkout store that Shopify is
(nothing wrong with that) has to do with ability to scale and add more
servers?

Whether this was written in PHP, .NET or Ruby.

~~~
noir_lord
What an arrogant comment, "simple checkout store", yes if they where doing it
for one customer perhaps but they are handling inventory, sales, displaying
products, theming, delivery, invoicing and payment processing for thousands of
clients and millions of customers...

"simple checkout store" \- brilliant.

~~~
le-mark
Ha! Shard on shopId. ECommerce can be hard, but there's nothing special about
what you descibe!

~~~
richardlblair
I'm going to attempt to bring this back to a positive and constructive
conversation.

From the sounds of it we are all devs here. And, as experienced devs, we all
know that saying "you just have to ..." will be your famous last words.

Adding more servers, as many of you will know, only works up to a point. From
there you have to further build out databases, redis, memcache, load
balancers, etc. As much as we like to fantasize about a "go faster" button
which just adds more compute, often the amount of memory or CPU you have isn't
the bottleneck.

When it comes to sharding, you're not wrong. Sharding off of a primary key is
something that is easy to grasp. Hell, it's not overly special (especially
these days). However, that doesn't mean it's easy.

If you think building a commerce platform is easy, I'd encourage you to apply.
Maybe you have the type of skills we are looking for?

------
siculars
Amazing. They need some outreach in Africa and South America.

------
dangerboysteve
Does this include POS sales?

~~~
moyta
No clue, hopefully xal will comment on this seeing as he works for them.

~~~
jonny_eh
He's Tobi Lutke, founder/CEO/Coder.

------
herbst
"Rails doesnt scale" mimimi

------
amree
Are they using actioncable for this?

~~~
bnmrrs
No, ActionCable for this one, it's a Go service that's handling the
websockets.

~~~
amree
Do you know any reference on how to implement something like this with Rails
(go + rails)?

------
hendzen
Did you guys talk to your legal department before going live with this? As
Shopify is a public company, showing sales/revenue stats like this in real
time might be in violation of SEC regulation FD if you did not alert all your
investors.

EDIT: Actually, since they are a Canadian company they are exempt [0] from
regulation FD. Interesting!

[0] -
[https://www.sec.gov/Archives/edgar/data/1594805/000119312515...](https://www.sec.gov/Archives/edgar/data/1594805/000119312515129273/d863202df1.htm)

~~~
hawkice
So it turns out the SEC lets you use even things like Twitter to give out
information, as long as it can go to every shareholder at the same time [I AM
NOT YOUR LAWYER, IGNORE ME].

see:
[https://www.sec.gov/News/PressRelease/Detail/PressRelease/13...](https://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171513574)

~~~
hendzen
You still have to formally tell your investors that you will be using Twitter
(or some other internet platform) to disseminate said information.

This Shopify data could definitely be used to gain an edge in trading their
stock. You basically compute projected earnings based on the sales per-second
rate reported on the site and compare against their earnings guidance from the
previous quarter (or analyst predictions). If the projected earnings go below
the projection, you sell, otherwise you buy.

~~~
jedberg
This is on their website. Therefore it's already an accepted source of
information for stock related material. Since it is public and went out to
everyone at the same time, it should be fine.

------
riffraff
see, you can still scale and make money with Rails in 2016, even if it's not
cool anymore :)

~~~
zackya89
for context, sorry if ignorant question but what else do they write with when
full scale, I thought twittter was written on rails as well

~~~
riffraff
I think it's fair to say that there are high scale websites built using any
stack, mostly using more than one technology.

I was just being ironic in my previous comment.

------
skaplun
UX orgasm, very powerful with very few elements

------
justin_vanw
Hate to rain on this (TBH I don't):

Shopify has raised (per Crunchbase) about $122M in funding.

At the current rate, they will see $374M in GMV on their best day of the year.

Shopify has between 1K and 5K employees (again Crunchbase). Let's make the
most conservative analysis and assume 1K. If they are paid $20 per hour (low
estimate I think), that is $41M in employment costs per year. With taxes,
office rent, healthcare, etc, lets just lowball again and call it $50M/yr for
all the people costs. Again I think this is a huge underestimate if the
crunchbase number is accurate.

Lets assume no marketing, hosting or other costs of any kind.

The internet claims 100k stores use shopify. Lets assume they all pay for the
standard tier plan, and pay month to month. That is $79 * 100k = 7.9M per
month in revenue. Again, huge over estimate, since I would guess 95% of the
customers use the cheapest tier, and the largest companies most likely
negotiate better than advertised fees.

Finally lets assume their BEST day is only about twice as good as their
average day. This is probably overestimating their revenue by about 10x, at
least.

That would mean they are bringing in well under $47.4M in gross revenue, on
over $50M in fixed costs.

So in other words, even if black friday were half the days in the year, they
still would lose substantial money. This is after 12 years of business.

It's unlikely they will ever turn a profit. If they were going to experience
some kind of exponential growth to defeat this analysis, 12 years of the
fastest growth in the internet have already gone by, so it seems unlikely
going forward.

~~~
dragonzooord
Shopify is a public company. You don't need to speculate on their revenue or
expenses, you can just look it up. They earned $99.6 million in Q3. They
expect revenues in the range of $379 million to $381 million for 2016. And
they are still losing money, although getting close to break even. Their
market cap is 3.86B, so 10 times revenue, so the market is expecting them to
continue to grow rapidly.

[https://investors.shopify.com/events/Events-
Presentations/de...](https://investors.shopify.com/events/Events-
Presentations/default.aspx#section_news)

~~~
justin_vanw
Hey, you're right!

[https://www.google.com/finance?q=NYSE%3ASHOP&fstype=ii&ei=IE...](https://www.google.com/finance?q=NYSE%3ASHOP&fstype=ii&ei=IEI5WOmYJMb9sAHUo7SQBA)

Revenue growth with corresponding increases in costs and expenses. NOT getting
closer to profitability, in fact operating losses are increasing in proportion
to revenue (almost a linear relationship in every quarter and year in the
reports).

Again, this is a failing business. 12 years in and no profit, profit not
within reach, costs growing in lockstep with revenues.

EDIT:

So I was curious how they had such high revenues when clearly subscription
fees can't account for it. Found this in the financial statement:

"We principally generate merchant solutions revenues from payment processing
fees from Shopify Payments. Shopify Payments is a fully integrated payment
processing service that allows our merchants to accept and process payment
cards online and offline. As a result of the launch of Shopify Payments in
August 2013, we have seen significant growth in the revenues generated from
our merchant solutions. In addition to payment processing fees from Shopify
Payments, we also generate merchant solutions revenue from transaction fees,
Shopify Shipping, Shopify Capital, referral fees from partners, and sales of
point-of-sale ("POS") hardware. Our merchant solutions revenues are
directionally correlated with the level of GMV that our merchants process
through our platform. Merchant solutions revenues increased from $34.5 million
in the six months ended June 30, 2015 , to $77.0 million in the six months
ended June 30, 2016 , representing an increase of 123.4%"

So they are counting CC processing fees towards revenues. I suspect that CC
payment processing fees shopify pays are approximately equal to what they are
charging, so this is just a revenue game where they charge 3% to customers,
pay almost 3% to the CC companies, and book revenue that can never be
profitable.

EDIT2: So found the cashflow in the statement. They charged $76M for these
fees, and paid out $56M. Not bad actually! However, that $20M in net is still
much lower than the costs to generate the business, $56M just in marketing.

~~~
slgeorge
> So they are counting CC processing fees towards revenues. I suspect that CC
> payment processing fees shopify pays are approximately equal to what they
> are charging, so this is just a revenue game where they charge 3% to
> customers, pay almost 3% to the CC companies, and book revenue that can
> never be profitable.

You don't understand the meaning of the word revenue.

~~~
justin_vanw
Maybe, I think I know what it means but I'm not an accountant.

I know that revenue is often quoted as some kind of measure of the success of
a business, when in reality it's extremely easy to run up revenues if you are
running at a loss. In the most trivial case, you can pay $1.10 for $1 bills,
for example.

Ok, so shopify isn't doing that, but it's hardly different, just a more
complex situation. They pay $50 for advertising to get $75 in revenue, which
they immediately pay $55 for. That's $105 paid out to buy $75 in revenue.

It would certainly be cheaper to just pay $1.10 for each $1 in revenue. I'm
sure the folks at shopify don't think of it this way, and I'm sure they
genuinely believe that they will someday change the economics of this and
become profitable. However, the balance sheet doesn't support that belief, for
me at least, and it sure looks like every customer they maintain leads to more
money they are losing.

Perhaps they can become profitable with enough economies of scale. Again, I
would question how much larger they would have to get to hit the inflection
point, which they haven't done, at least in the financials reported, so far
losses are scaling up linearly with revenues (which is to say operating
margins are a steady negative % against increasing revenues).

Since they have been around for a long time (12 years) and those same 12 years
have seen an absolutely huge increase in ecommerce, it seems like they have
failed to hit the required scale despite the most favorable conditions you
might hope for. That doesn't make me very optimistic.

~~~
j1vms
Assuming you based this off their financial statements, then everything you
are saying is pretty much 100% on the ball with regard to interpreting their
cash flow.

> That doesn't make me very optimistic.

I would say that the market is "on your side" at least for now, as people on
here have been starting to compare them to Amazon which is, in terms of market
cap, 100x higher valued than Shopify and really not a fair comparison.
However, let's not forget that the reason Shopify is a 3.5bil company (and not
worth say "only" 500mil) is because they have eyeballs on them right now, and
quite a few at that. The market isn't sure how they plan to use those
eyeballs, but there's enough visibility to give them a chance at being a
strong market player in the future. Also yes, despite being publicly traded,
most investors would consider them still to be startup based on where they are
at with their business model.

