As much as I hate the phrase “game-changer,” if any tech company qualifies, it’s Shopify. Building and managing an online shopping experience 10 years ago was a frustrating, tedious, tear-inducing, pain in the ass.
Shopify changed all that. From shopping cart functionality and payment processing, to tax rates, multi-carrier shipping, customer notifications and inventory control, it’s one of the slickest ecommerce platforms available. And at $29 per month for their basic hosted plan, it’s a bargain.
As this recent Recode article points out, companies like Shopify have dramatically altered the online direct-to-consumer (DTC) landscape. So much so that it’s no longer necessary for new brands to spend small fortunes on custom ecommerce technology.
The rise of giant consumer startups that said no to investor money
When Andy Dunn started building his direct-to-consumer menswear brand, Bonobos, in 2007, he saw no great options for e-commerce software. As a result, he estimates that Bonobos spent tens of millions of the $120 million it had raised from investors on building, supporting and tweaking the Bonobos technology stack over the years.
But a decade later, Dunn was able to turn to e-commerce software company Shopify as the platform for Allswell, a mattress brand that Dunn helped incubate in his new role at Walmart where he oversees the company’s digital-native consumer brands.
“Shopify is the absolute game-changer,” Dunn said. “At least 75 percent of the digital brands I talk to today are on Shopify and many of them are now saying we don’t need to invest that much in tech.”
Shopify’s overall success corroborates Dunn’s anecdotes. The company’s revenue grew 73 percent last year to $673 million. Shopify, which is publicly traded, is now valued at more than $15 billion.
From his vantage point, Shopify Chief Operating Officer Harley Finkelstein says he is not surprised by the rise of fast-growing, self-funded, digital-native brands.
“I’ve been watching stores, and stories, like MVMT happening almost every single day,” he said.
Not surprisingly, he believes Shopify has played a big role. Startups can use the company’s software from launch and stay on it even as they approach $1 billion in annual sales, as a brand like Fashion Nova has shown …
More about Shopify
Shopify is a Canadian ecommerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary ecommerce platform for online stores and retail point-of-sale systems. The company reported that it had more than 600,000 merchants using its platform as of August 2017, with total gross merchandise volume exceeding $55 billion.
Shopify was founded in 2004 by Tobias Lütke (main photo), Daniel Weinand, and Scott Lake after attempting to open Snowdevil, an online store for snowboarding equipment. Unsatisfied with the existing ecommerce products on the market, Lütke, a computer programmer by trade, instead built his own.
Just to clarify, I have no affiliate relationship with Shopify. Nor have I ever been compensated in any way for saying nice things about them.