Shopify has indeed had an amazing rise even alongside the tough existence of all the competitors in the market, so how did it do exactly? Scroll through
What Is Shopify?
Shopify is a Canadian-based e-commerce shopping platform, which was founded in 2006 by Daniel Weinand, Scott Lake, And Tobias Lutke. The headquarters of this company is in Ottawa, Ontario. The company offers a bunch of services to online retailers which include marketing, payments, shipping, and various tools for engaging customers.
A report which came in May 2021 suggests that the company has approx 1,700,000 businesses in almost 175 countries. Around 1.58 million websites run under Shopify, and 10 million websites use Shopify. It comes among the top 10 largest trading companies in Canada. With a market capitalization of $54 Billion.
Shopify Business Model
Earlier Shopify used to make money by offering software subscriptions. But the time has changed Shopify now makes money not only from software subscriptions but also from merchant solutions.
Merchant solutions can be considered as an umbrella that consists of Shopify payments, Shopify capital, ShopPay installments, Shopify shipping, Shopify Fulfillment, Shopify App, POS hardware, Shopify email, and others.
Adopting merchant solutions as the new source of income has proved to be a great decision as merchant solutions generate more money compared to software subscriptions.
But it is also important to know that merchant solutions only work well when software is subscribed by merchants, so it can be said that both software subscriptions and merchant solutions are interdependent.
History of Shopify
Shopify was founded in 2006 by Tobias Lütke and Scott Lake after attempting to open Snowdevil, an online store for snowboarding equipment. Dissatisfied with the existing e-commerce products on the market, Lütke, a computer programmer by trade, instead built his own. Lütke used Ruby on Rails to build Snowdevil's online store and launched it after two months of development.
When Shopify was launched, it was called Jaded Pixel. Tobi decided to change the name to something catchy and settled with Shopify which was the correct representation of the company. Even in the early days of Shopify, it was loved by businesses that wanted to start an online store. It quickly gained popularity among business owners around the world.
Within a year, Retailers on Shopify’s platform net a combined total of $100 million in sales since the company’s shopping cart system launched in 2007. In 2010, Shopify raised a Series A round of financing worth $7 million from Bessemer Venture Partners, FirstMark Capital, and Felicis Ventures.
In 2015, Shopify went public on the NYSE and Toronto Stock Exchange under the symbols "SHOP" and "SH" respectively, and started trading at $28, more than 60% higher than its US$17 offering price, with its IPO raising more than $131 million. Currently, the stock is trading at $466 (from a high of $1698) a 74% correction.
Today, Shopify customers include, Kraft Heinz, Whole Foods, Whole Foods, Hyatt Hotels, Gymshark, All Birds, The Economist, BBC, New York Times, Nescafe, Kylie Cosmetics, etc.
Shopify Fee Structure
There are various types of fees structure that Shopify offers. Those are given below:
Shopify lite: Starting with the cheapest pricing, Shopify lite comes with a plan of $9/month. This plan is best for those shop owners who seek to sell their products without having a proper online store.
This plan lets anyone create a store using a page-building app for free. If anyone doesn't want to build such stores then they can also sell their products on apps like Facebook, Instagram, and WordPress.
Basic Shopify plan: As the name suggests it is also a cheap plan which costs around $29/month. This plan includes an unlimited number of products, 2 staff accounts, 24/7 support, manual order creation, free SSL certificate, blog, gift cards, discount code creation, discount on the shipping price, and many others.
Shopify plan: It is $50 costlier than the previous plan which is priced at $70/month. This plan provides more benefits which include high online sales volume and lower credit card and transaction fees.
Advanced plan: This plan is very important for those shop owners who have high sales. This plan costs around $299/month. And adding $120/month the subscriber can enjoy full access to advanced report building tools. With the help of this tool, anyone can get full insights into sales.
Competitors Of Shopify
Top Alternative for Shopify
Is Amazon a threat to Shopify? No, The difference between Shopify and Amazon is that Amazon is a whole market place whereas Shopify is an eCommerce platform. Shopify lets its sellers build their domain and customize their products accordingly. But on the other hand, Amazon is a marketplace that allows its sellers to sell their products via Amazon.
Shopify is surely a great place for those who prefer go-to-places selling products. This is a straightforward platform that also provides customer services. With great leadership and an ambitious team, Company has established itself as a go-to for big and small businesses.