In addition to this being a great position for Shopify, this is an amazing thing for merchants compared to Amazon's offering; it's the critical difference between "We'll sell your stuff" and "We'll empower you to easily sell your stuff" that leaves power and agency in the hands of individual companies.
Semi-related: For a really insightful conversation about Shopify, personal interactions, and running a good company, I highly recommended The Knowledge Project's interview with the company's CEO, Tobi Lütke: https://fs.blog/tobi-lutke/
On starting his company in a secondary market:
I do think that there is an almost complete difference between how you build a company in a primary talent market and sort of secondary talent markets. For instance, one of the biggest differences in secondary places is, if I hired someone, the chance that we are going to still work together in a decade from now is super high.
Hiring for future potential
It means that it’s a much better idea to hire for future potential rather than for current skill. Once you do that, what you realize is, a dollar invested into helping to train people or even subtle things like making sure that next to any junior programmer, like for every five junior programmers in a team, you have one person who can become their mentor—these basic ideas all start having way more dividends
On building a hiring process for a learning organisation
..we have a hiring process that really, really finds people of high future potential. And then, we try to help them reach this potential 10, 20 years earlier in their career than they ever thought was possible, through coaching, through book clubs, through anything.
Fixed vs. Growth Mindsets
Everything in Shopify is built around this idea that if someone shows up with a fixed mindset, we convert them to a growth mindset quickly. And then once we have a growth mindset, we fill people with context (i.e. explain what their role is and what they are expected to do).
On the role of processes with an organisation
There are three kinds of process. There’s a kind of process that makes things that were previously impossible to do, possible. That’s good. Then there’s a kind of process that makes something that was previously possible significantly simpler, which is also good. However, 99.9% of all process that exists in corporate America is the third category, which is actually just telling people to behave slightly different from what common sense tells them to do.
So we have lots and lots and lots of examples where we just avoided having to create process by just changing the environment in which we all spend our time in.
Did he elaborate on the details of this process?
The brand is damaged and getting worse. People already avoid Az and it will only get worse.
In the long-term, "platforms" like Shopify lose because they don't have nearly enough developers. They have ~3000 "apps" listed in their app store: https://apps.shopify.com/browse/all?pricing=all&requirements...
WooCommerce has 285 plugins, and WordPress has 54,000+ plugins. Magento has ~5000 plugins.
It would be cool if Stratechery took a look at free/open source on the platform/aggregator spectrum.
The benefit is the core product is insanely battle hardened and you can depend on it having a high degree of reliability (both from an up-time and code quality level).
Where as with WP, are you really going to cobble together a bunch of plugins written by anyone and then hope everything works? Maybe, but you'll also have to host it yourself too and now suddenly you're on the hook for site reliability -- unless you use a closed source WP hosting platform and now you're in the same boat as Shopify except it's worse because you have no idea what you're getting when it comes to reliability.
I think Shopify is a good example of how a niched down product can be successful. If you want to sell things, you want a platform designed to sell things. Not a generic CMS where you need to assemble a custom solution. This is especially true if you're not technical.
Example: Shopify sends abandoned cart emails by default. With Magento you can't even see what items are in carts in the core product.
And here is the thing you forget: no one with a store is interested in dealing with setting up and managing a web store. They are busy with their business. The web store is the side effect of that. SEO, taxes, shipping management, etc? All that needs to come out of the box, or a no brainer.
54,000 plugins doesn't help with that. With Shopify, we only installed a few, and they did exactly what we wanted them to.
So, if you are going to compare open-source options with Shopify, you need to actually compare it with a turn-key solution.
i.e. Where do I create a woocommerce store that is setup correctly from the beginning, which includes updates, SEO, shipping, taxes, payouts, billing, and everything else Shopify provides out the gate.
Because I'm busy running a business, and that business isn't running a web site.
Shopify DOES NOT help you sell. Period.
Amazon will win in the long run because at the end of the day it's all about if the "platform" can move merchandize or not. Amazon captures top of the funnel all the way down to personalized targeting.
Shopify will never do that. they are just the tool to help you figure out all that yourself. Outsiders / beginners looking in would say Shopify is amazing because the ecosystem and how many "tools" there are to help you sell. but it's all load of horsesh*t. The merchant ultimately is the one responsible to run the ad campaigns, find the customers, run promotional pricing on BFCM.
There's a lot of misconception of how much hard work it is amongst beginner Shopify merchants in order to generate sufficient traffic. Amazon, at the very least, provides an audience -- which solves a very major problem for any business (to get traffic).
There's a lot of success stories running on Shopify, but these companies would have pretty done well creating their own custom solution.
At the end of the day, it's a piece of software (ie. shovel) to sell to people who want to try and make money online (ie. the gold rush).
I agree that most small companies aren't up to the challenge of managing an online business. The 3PL integration will help a little bit, and I imagine that Shopify will continue to chip away at the problem by integrating other services.
Seems like if Shopify is a way to create your own venue, and Amazon is a venue in-and-of itself, there might be a case for doing both.
The Shopify app store is regulated + tested by Shopify before getting the approval to go live.
WordPress plugins are the wild west, many of them incompatible with each other.
Number of plugins isn't the greatest metric but it's a good leading indicator. It's kinda hard to estimate how many merchants and customers and volume of transactions have been processed when they aren't being tracked by a central entity ;)
Magento/Magento2 is dying, if not dead. I work in the e-commerce space and have seen more businesses move off Magento into Shopify, or BigCommerce.
Shopify's app store has only ~3000 apps for a reason - Most of the functionality of a core shopping / merchant experience is already built into Shopify so you don't need to go through 50,000 apps to do what you need to do to sell. The apps on the Shopify app store also go through a review process that ensures the quality of the apps.
Sure, it's easy to get started, but once you're locked into their platform and you need a more custom solution, it's going to be hard to move out of it.
But people post on Medium primarily for visibility. Same with people who sell via Amazon; that's where the people are. In that respect, Shopify is more like Wordpress; as the article says, you can't buy anything on shopify.com, just like you can't find any content to read on Wordpress.com
We had great Magento developers working on it and could barely keep it stable under even moderate load. To scale up, if you're a heavily trafficked store, you need to pay a six figure annual license fee, or you can't shard/load balance your database. Without the Enterprise plan, your site can't easily do zero-downtime deploys, and deploys take about 30 minutes of full outages to get out the door. Editing anything took about 36 clicks, which carried the risk of corrupting a language you weren't editing. Deploying a language pack requires an outage. Deploying new CSS requires an outage. There were ways around this, which we used, but the extensions and ecosystem are so poor that I wouldn't encourage anyone to use them—we ran into one instance where installing an extension would bring the site to it's knees, at random, because the developer had hand-rolled an image-resizer for some reason to build thumbnails.
I'm an infrastructure engineer/developer originally, and I figure, how bad can it be? We'll ignore the snake oil and scale up with good developers and cloud hosting, along with best practices.
I can list how incredibly poorly built Magento 2 is for hours, but I've never seen anything like it. We made it work, but it cost us hundreds of thousands of dollars to get it to "doesn't break" level of stability.
It's outrageous particularly because the entire ecosystem is designed to shunt you toward expensive licensing that requires NDAs to be signed, certified developers to be used, and ever-escalatingly ridiculous hosting fees (at one point, I was quoted a $1500/month virtual machine to properly handle our environment).
Meanwhile, when we wanted to do a flash sale, Magento was so complicated and slow to deal with, we made the call to literally create a second store, using Shopify, to run our limited time sale. Not only did it take maybe 1-2 days to get it set up and working, we ran 1M in sales through it within the first 8 hours of it being online, without any outages, stability issues or anything else, without ever needing to do a payment gateway's time consuming PCI compliance security audit, either. We got paid out within a few days of even first signing up.
I think people underestimate, often, how expensive open source can be, and one red flag, in the case of Magento should be that anyone that isn't a "Magento developer" is terrified of touching it. (I have stories about how hard it is to even develop on your own machine, and how literally all roads lead to their Enterprise plan, with no way out, but that's for another day)
If you've got even a moderately complex business, plugins add up pretty quickly, and each Shopify app you add to your site slows down your pageload. When Shopify pitches you, they show you some really great looking sites, but after you've bought in, you find out that they're not only operating with 35 apps (at an additional cost of thousands a month), that some of them are hacky custom workarounds, and even though status.shopify.com is all green lights, the servers these third party apps are running on aren't on the same infrastructure, and you're dealing with dozens of points of failure on black Friday...
But thousands of shops are on the Shopify platform, and the "Just Grow Bro" Sales Lead told me they do B2B and international, so how bad could it be?
Aggregators win when products are anonymous commodities. Brands win when products are beloved.
It seems like the trend (for many reasons: over-marketing, dis-satisfaction, dis-trust, a race toward the barely-legal) is toward products as brands: brands which are authentic and relational and participants themselves in the experience (that "get it").
I think this trend will prove to be great for platforms, and bad for aggregators. https://medium.com/@thecraigmartin/the-greatest-threat-to-re...
Q: noticed that sockfancy.com is using shopify? is there a way to set things up like they do: user checks off the options they want and then they go directly to a single-page checkout for their subscription?
A: A subscription is a recurring order. For recurring orders they are using Recurring Orders & Subscription Box App by Bold, and Recurring Orders Enterprise, which is only available to Shopify Plus merchants.
Q: how about the single page checkout?
A: The single page checkout is also a feature of Shopify Plus plan, which starts at $2000 per month. They are also using cashier by Bold.
Q: It looks like those Bold plugins add commission costs of about 3% or more per sale?
A: I don't know the details of that, but again they are available only for Shopify Plus.
Yes it's true that you can set up a generic site cheaply, but for a site that actually works well and has single page checkout, etc. you get into some very big bucks, and also some very large sales commissions.
Fully Loaded Time - 7.8s
Not sure anyone would think this is an acceptable amount of time to wait for a page to load.
Taking a quick glance, it looks like Privy and Zendesk/Zopim are the main culprits. That can be easily fixed - just don't use those apps or find alternatives that don't slow down your site.
Shopify is competing with any other shopping cart software, and for companies concerned with performance there may be a case for hosting your own.
How many of them have better performance? Might just be a "all of you have to do is be faster than the slowest."
Not sure if I will be correct about this but I might as well try for a third correct prediction about Shopify:
* Fulfilled by Shopify (https://news.ycombinator.com/item?id=18524131)
* Shopify POS (https://news.ycombinator.com/item?id=6289827).
I'd say it wouldn't make sense to do this. Shopify has no relationship with the retail customer. To build it, they'd have to build traffic from scratch. They'd have to not only build a unique customer brand, but also have to figure out a way to drive traffic, which would likely be through aggressive marketing (Facebook / Google ads), which wouldn't be economical. Secondly, what would Shopify build a brand around for customers?
Amazon's brand is built on the promise of not only providing the cheapest prices, but also the convenience of 2 day shipping (achievable only through scale), amazing customer service (and lenient refunds, again achievable only through scale). This being said, what would Shopify's "brand" promise be?
Curation of their favorite products? Who says that Shopify is qualified to curate?
All of these factors make it hard for me to believe that they'd enter and create a serious business from a unified e-commerce site that'd compete with Amazon.
One large issue that I see is that Amazon wins 40%+ of ecommerce because shoppers searches start on Amazon. Shopify stores lose by default 40% of the time because of that.
Shopify with its huge number of merchants and pre-populated product listings and its centralized cloud-hosted platform is uniquely positioned to compete here in a way that Magento and WooCommerce can't with their distributed install base.
Shopify has to have an angle that is unique to them for sure. I am not sure what that is in terms of marketing. But they have generally done well in marketing, so I trust they will find an angle.
I think the centralized store will be an adjunct to the main offering, thus it will be an option, but because it leads to more sales opportunities, because it helps to solve the search issue, most will opt-in.
I think that they can also somehow tie in the existing stores, of which there are 700,000 into solving the need to introduce people to the centralized search. Maybe if these stores act as a funnel to Shopify's central storefront, they will get click through advertising revenue. Thus the centralization is in effect another revenue stream for stores that refer traffic to the central store. E.g. "If you do not get a sale yourself, at least get the referral revenue on the eventual sale."
I wouldn't be surprised as well (another prediction) that Shopify wants to further own the customer relationship between their merchants and their merchant's customers so that Shopify can market on Shopify's behalf to these customers. I see suggestions of this from the breakdown of the Shopify-Mailchimp relationship. Shopify is working to maintain control of its relationships with merchant's customers.
My email is in my profile if anyone is interested in participating in my beta.
Example of a web app on my platform -
Case study for how that app, hastebin, was ported -
Shopify is almost at the other extreme: the sites that sell goods on its platform must differentiate themselves with niche offerings and consequently, I'd bet that the average Shopify customer makes purchases a lot less frequently than the average Amazon customer. People shop on those sites because the local stores don't have what they are looking for.
Another reason I'm a bit skeptical about the "Shopify is a threat to Amazon" narrative is that at a certain scale it seems that stores would leave Shopify and just manage their own websites and inventory. So Shopify is sort of a business incubator that is extremely valuable when a business' scale is limited. But the few that become huge hits would likely leave to save transaction costs, so Shopify would lose that business.
Totally agree with the Wal-Mart analysis though. They seem to be all over the place. I sometimes wonder why Wal-Mart doesn't at least try to start a subscription service. They would definitely have to undercut Amazon on price and eat losses for a while, but I don't understand the idea of advertising a no-subscription required model when that model clearly works so well for so many other businesses. The most obvious issue is that they are at a huge disadvantage in distribution center build-out, but why couldn't they start regionally in a couple of densely-populated areas and expand from there? Price the service aggressively and maybe give members discounts on groceries or other in-store products, an area where Wal-Mart has a massive advantage over Amazon.
This could mean over time, more Shopify merchants would be selling overlapping product categories (the ones Amazon has not yet gobbled up yet).
Which would mean that as a Shopify merchant, you would competing with other Shopify merchants (not Amazon).
How do you differentiate, when the Shopify platform makes the same set of selling advantages available to everyone?
You leave Shopify ...
Shopify doesn't make advantages like branding, brand awareness, marketing, market research, etc available. It simply makes setting up an online store more convenient for people do. Convenience != competitive advantage. You can extend this argument to cloud platforms. AWS, and Azure make setting up and scaling a SaaS easier, but it doesn't give you any secret sauce that you need to succeed, like the ability to know what your customer want.
Most of the Shopify plugins exist to give a store owner an advantage in sales, conversion or marketing. Sure execution counts, external branding counts, but Shopify is a closed platform. You use their plugins and approved apps. And most store owners rely on these plugins to some degree, to help them build brand awareness etc.
Shopify levels the playing field which is great. But if everyone selling Bananas is on the same field, using the same plugins, switching fields could be a great way to differentiate and possibly optimize beyond what Shopify can help you with.
There also are a number of apps who choose not to be in the app store and not give up 20% of their revenue and instead market on their own.
My other purchases are from shopify sites. I trust that what I'm buying is what is advertised far more than I do with Amazon. The influx of crummy knock-off products, poorly made junk, and a lack of quality around product listings on Amazon has completely driven me away from them for things like clothing, shoes, fitness products (equipment, supplements), and anything else that I wouldn't see myself purchasing regularly or that I require a high standard of quality for.
But there's definitely some gems out there!
I would love to see this happen with mattresses actually. Buying a mattress is currently ridiculous. Why do I need a guy in a suit showing me around like I'm buying a car?! What's the difference between these mattress brands that I have never heard of. I'm not loyal, because it's a one time purchase every ten years. The brand I purchased last will probably no longer the exist next time.
My latest eye glasses were purchased at the grocery store optical centre, not a mom and pop shop or specialized brand. Much cheaper that way, and good quality. I wouldn't be surprised to see Amazon take over this category as well. Hasn't Walmart already?
Does anyone know why it is that Shopify's stock has risen by 100% over the last year? I looked it over and couldn't figure out why -- is it the 3PL Fulfillment Network this article mentions?
I just checked their site, and it looks like it's still the case.
They're also growing and hiring more which always looks good in the books.
Unfortunately, while their revenue is growing their earnings are in the negatives: 1B revenue in 2018 up from 673M in 2017, however they're -64M in earnings and -40M in earnings previous to that.
Not to mention the hype stories like this: "Shopify's market share could triple within five years rivaling Amazon", https://finance.yahoo.com/news/shopify-apos-market-share-cou...
I can answer any question you may have.
1. Do you see the Market for shopify apps growing? Any indications would be helpful from your experience.
2. Best way to get started on Shopify apps for developers?
Shopify is missing many things and the apps are there to fill those gaps, Shopify doesn't replicate the apps functionality to drag them out of the game so yea, there is much space left for new apps.
Shopify has a great resource of information on how to get started here: https://developers.shopify.com/app-development
You may find an API library for your preferred language in this list: https://help.shopify.com/en/api/tools/supported-libraries
I have released such a 'borrowed idea' app before 4 months and i barely have 15 users on it. It's not much but it's more than nothing, it took me less than two months to develop it and about 6 months to release it (slow app verification procedures and stupid bugs).
Yes and no. The excessive lowering of the barrier to entry is self defeating. That is, more stores === more noise. Throwing still more at the wall isn't going to increase success. That friction will increase
That is, as the number of failed store owners grows so does the fiction and reputation debt for the Shopify brand.
I would assume no, given the article's assertion that Shopify is just a facilitator, which lets the shop's owner shine instead.
You was making a CVS file with product description, putting it on a web server, and directed Alibaba's product feed downloader on it.
Alibaba also had "hosted frontpage" back then. The same thing you get now with a store in *.alibaba.com subdomain. It was actually much more feature rich back then. They were allowing upload of more or less fully featured HTML pages, but around 2010 they discontinued both.
If Alibaba guys ever knew what a gold mine they were sitting on all that time...
"I'd rather buy @amazon in 2029"
Shopify is easier to build a brand on, but harder to make actual money on initially.
If Shopify turned us off tomorrow (they can), we’d be able to continue. If Amazon did, it’s game over on that platform.
Would YouTube count as an Aggregator? Are they becoming less about the task to "facilitate a relationship between 3rd-party suppliers and end users" and more about seeking to "intermediate and control?"
Considering about working on an open source with turnkey SaaS hosting modern alternative. Drawback: MVP is quite big.
Would you see such a need, or is everyone happy with Shopify?
Some questions, if you can spare a few minutes:
What are top 3-5 issues with the platform that you're currently using?
What do you like most about the current platform?
What would be the must-haves of another store platform in order for you to switch to it?
Appreciate your insights!
The last thing you need when trying to sell product is to now deal with running software and a server. Kinda reminds me of when I thought I could build a webshop for my father with Rails and Stripe. Thank god I realized sooner than later that there's basically zero upside to running this software and I switched my father to Shopify where he's happily been since.
I think this kind of solution only seems good to HN nerds who don't realize what Shopify brings to the table, or that technology is somehow the hardest part of running a webshop. It seems naive.
Since you're asking these questions, it sounds like you don't have much domain experience. I encourage you to create a simple Shopify shop and try selling something, if only to see what it gives you out of the box that your turnkey solution can't. That would be essential experience to have before you even make your initial commit.
Fills a space somewhere between full self hosting/ developing from a base open source cart and Shopify.
WordPress + WooCommerce, PrestaShop and Magento already do that. Drop $10 to $20/month on hosting on DigitalOcean, install Wordpress, install WooCommerce, buy a cheap theme, buy whatever extra plugins you need, setup your payment system (PayPal and Stripe are supported), and you're off to the races.
And it's better than that, there's people with years and years of experience in modifying and creating plugins and themes so once you have enough $$$ from the basic setup, re-invest into the business and get better developer support for all the GPL'd plugins and themes you're using.
So all the average person needs to set up shop is design skills, software engineering skills, understanding of servers and PII, and the time to do complete all technical tasks while also building up their actual product catalogue.
That's a lot, and goes a long way in explaining why Shopify has a justified usecase.
First, shopify is like $30 for a month. I'm $30 for a few minutes. The cost savings are laughably huge. And shopify's better anyway! Their plugin ecosystem is great, the admin tools are built specifically for merchant admin types (as opposed to boil-the-ocean blog admin UI with merchant UI hacked on top of it), so my cofounder/brother, who handled listing and fulfillment and that sort of thing, had a much easier time with it.
Shopify could literally 10x their price and it would still be a great deal. And this is for a lifestyle-sized biz. few $k/mo in transactions. For anyone doing this "for real", it's a rounding error.
Their plugin and theming is a joy on the dev side as well. Great docs, easy to get a sandbox account, theming in Liquid is a joy for anyone who's done jinja/handlebars/etc, their default themes have beautifully documented CSS.
I would, as the developer, literally pay my own money for shopify to be part of the stack just to abstract all that crap away from me. The time savings for me alone justify it.
I'm currently converting a homegrown multi-million dollar eccommerce platform to Shopify and it's been a dream. Most of the significant lifting was done in less than 2 weeks.
Their graphql api has just been amazing, not to mention all the other developer services they provide.
OFC, I do feel like I'm coding myself out of a job, as I've spent the last 7 years building and maintaining that system.
And now I'm switching it all to shopify plus with no regrets. I learned a hell of a lot coding my own ecommerce platform, and would love to work for a company like Shopify.
Long term we are thinking Ship Station or maybe ZenDesks ecommerce offering.
Disclaimer: I work for ShipHero.
Shopify is a hair more expensive than some competing processors, but when I last dealt with it, they were in league of paypal, stripe, square, etc, so it wasn't a differentiating factor for us, and I suspect that's true for most businesses of our size.
I get that using stripe or paypal it's easier sometimes, but for woocoomerce and alikes you usually have plugins already developed to use other payment platforms.
If Shopify means they hire this guy for a tenth of the time, they save $9000.
They would have to be moving 300k/mo for hiring a full time to even break even.
In any case you can do what everyone else does, bake the fee into your prices and call it a day - it's not like you can compete with Amazon on the low-prices front anyways.
Is this satire?
Hey now, stop with the name-calling :P I work on and use proprietary end to end solutions for ecommerce (but not Shopify).
Woocommerce wins for me because it lowers development costs and costs are lower overall. My perspective is definitely someone who has developed ecommerce sites, not solely as a non-technical user, and for me it's very advantageous to lower costs by using and modifying GPL'd plugins and themes.
I guess Shopify has 4000 employees and enough cash and enough direction to come out of box with a good UX and good defaults and that's good enough for nontechnical users.
Amusingly, grasping that concept was a big factor in my decision to put my MBA degree on hold...
An example of how it could apply is if shopify were to "go down" often thus driving your customers to your competitors that roll their own solution that has good uptime.
Even for technical users / developers, their time is better spent than fiddling around with 10 different tools.
This might or might not be true. Fiddling with 10 different tools often gives you are much larger level of control. If you need some control that you get with 10 different tools that the single source doesn't do then you are stuck with 10 tools. The downside of course if you now need to fiddle with 10 different tools.
Make the correct decision for your situation.
I guess I wasn't clear enough in making my point: Wordpress + Woocommerce can be setup very quickly and with minimal fuss and they can be as heavily customized as you want and rival whatever plugin-heavy Shopify sites are out there.
Seems like a pretty obvious choice for a small business.
But it's light-years ahead of WordPress+Woocom.
Neither of these are well set to run a proper ecommerce without heavy customizations though.
My wife is starting a fashion business. This is a hill too high to climb for a non-technical user. She was up and running in 30 minutes with my credit card and Shopify earlier this week. We don't have time to maintain an instance, troubleshoot Wordpress theme and plugin incompatibilities, etc. That's time better spent on sales funnel optimizations, manufacturing product, and customer support.
Would we consider more advanced ecommerce systems? Sure, when she hits $1MM/year in annual revenue. Until then, Shopify earns their keep (and margin) by taking care of the mundane. Make dollars, don't pinch pennies.
See: "Dropbox is just ftp + git" 
* Until then, Shopify earns their keep (and margin)*
That's fair. For business stuff I've swiped the credit card and paid for support as well. If the Shopify experience is easier than WooCommerce, etc. then I get it.
But she hated the web-based admin interface and it was way too cumbersome to get anything customized, products added, etc. In the end it just wasn't worth it and she's now on Weebly. Shopify and Weebly have their own faults and can definitely be a pain if you want to do anything off the beaten path, but for the non-technical user who just wants to sell things I see the value over a self-hosted Wordpress install.
Just set up 10-20 warehouses, hire a few hundred workers, train them, get an HR rep, IT, finance, and support, and you're off to the races!
Kids are so lazy these days, with their long hair and their rock'n'roll music.
For someone at the beginning of their ecommerce journey, Shopify is the BEST way to start making money almost immediately.
And there may be a split between the most successful and least successful customers of Shopify, but Shopify gets to make money off both.