17 Mar 2017

Shopify e-commerce platform scares Amazon

Shopify’s e-commerce platform is quietly powering an e-commerce revolution, and scares Amazon with its innovations. However, it does a good job hiding itself from the world. The Shopify platform is invisible by design, enabling the end to end operations for more than 400,000 individual retail shops and brands.

In 2016, the Ottawa-based company, was involved in purchases by more than 100 million individual shoppers. Few people know that Shopify started as an idea of an online selling program to sell snowboards. Tobi Lutke, who is the founder and CEO of Shopify, transformed his idea into an empire. Lutke is the guy that managed to scare away Amazon.

Shopify forced Amazon to shut down a similar platform. As Stephen Baldwin wrote in the Fortune magazine, “it is the rare example of a company not just taking business away from the conquering-everything-at-all-costs Amazon, but likely playing a role in its decision to pack up and go home.” Shopify is quietly carving a niche in the difficult e-commerce world.

Shopify has 2,000 employees, 700 of them being added in the last 2 years. Shopify COO Harold Finkelstein said in an interview: “we want to enable merchants to sell anywhere, whether that’s online or offline, through Facebook, Pinterest or in person. We have already opened an R&D center in Toronto to support these plans.” Finkelstein also gave an example of how Shopify makes life easier for its users saying that “Shopify contacted all shipping companies and negotiated on behalf of all of our merchants, which gave them better economies of scale. We have been focusing on improving payments, shipping and loan products.”

If you are starting your own small business, Shopify will enable you to have your own digital store immediately. But that’s not all. Shopify will give you advice, in case needed, on finding a name for your site or which design template will be more appropriate. When the store is set up, there is the ability of tracking your sales and shipments as well as marketing analytics. You can have all this with a monthly subscription, starting at $29.

In January, Amazon had to shut down its Webstore project, which was a similar idea to Shopify. Not only did it abandon the project, but it signed a deal with Shopify that allowed Shopify web store owners to sell on Amazon. Investors were so extatic that Shopify stock jumped nearly 10%. Two years after its initial public offering (IPO), the stock tripled its value and costs by $60.

Shopify and Tobi Lutke were pressed by the US media in a Trump-related controversy. Breitbart News Network, the famous alt-right site of Trump’s advisor Stephen Bannon sells merchandise using the Shopify platform. A social media campaign branded #DeleteShopify started, and Lutke received more than 10,000 e-mails that demanded him to cut off Breitbart. Lutke wrote an article, on Medium, titled “In support of free speech”. He wrote that since there is no illegal activity reported, Shopify will remain neutral because, in case it didn’t, this would mean that ideas would be censored.

Shopify seems to be taking by storm the world of e-commerce gaining individuals and small-medium sized companies. Jeremy Levine of Besemer Ventures Capital suggests that, ”it is certainly plausible that half of all e-commerce transactions could flow through Shopify, at some point.”