From Yahoo! Finance:
I was talking to a good friend. He’d just landed a new job and couldn’t believe what their team had pulled off during the lockdown.
You see, while the world ground to a halt, his company quietly sold $470 million worth of products — 47% up compared to last year. Behind the headlines, it attracted millions of new customers.
And when the S&P 500 plunged 9%, this company’s stock has doubled in value.
It’s probably obvious what company they’re referring to, but for those missing the target (I get it, I’m still drinking my coffee, too), it’s Shopify.
One thing to note here is that Shopify doesn’t exactly compete with Amazon in the traditional sense, at least not yet.
One of the points we touch on in that episode is Amazon started as a retailer and then turned into a Marketplace. Shopify started as a Marketplace (albeit a disjointed one, intentionally) and is slowly pulling everything together to create an all-inclusive shopping and selling experience.
Shopify and Amazon are tackling online retail from two different perspectives. Amazon is looking to swallow everything up and be the only thing that exists in the world. Shopify is swallowing business’ online footprint up and offering them alternative and more flexible avenues for sales, especially now.
For as little as $29, the company offers a simple tool that sets you up with a custom online store. They can even hold your inventory at their warehouses and ship your products.
Because Shopify Inc operates behind the scenes, most consumers don’t even notice it. But it’s already the world’s second-biggest online shopping company. It powers over a million online stores from all over the world that are grinding out 50+ billion a year.
Getting people on board for little money, and not asking to take 15% of their money for the privilege is a big plus for many existing businesses. Imagine running a shop in your town that had to close and you needed to get online, quick. The mafia (read: Amazon) way or the Shopify way, which do you choose? It might be easy to jump on the Amazon train because of all of those eyeballs and traffic and…
But good luck standing out. Right now, all you’re concerned about is keeping some modicum of the traffic you saw in your store.
With a single flip of the switch, Shopify Inc connected 16 million shoppers with a million mom and pop online stores from across the globe. Shop is now probably the world’s most diverse online store after Amazon—and it’s just barely started dipping its toes.
I talked about the Shop app on the podcast, too, for a bit, but admittedly didn’t dig as deep into how important it is as I should have. Within the app, I have immediate access to all the local Shopify-powered businesses without having to do a damn thing. While all these businesses could sell their wares on Amazon, the amount of effort to get on par would be a non-starter for many of these places.
Especially when it comes to Amazon’s rules.
Shopify won’t overthrow Amazon. What is will do is make small, independent businesses stand out. It’ll give rise to the 2020s equivalent of brick-and-mortar retail. While physical storefronts might still be on the downtrend–and that won’t likely change–virtual storefronts will climb. We’ll find our niches, and we’ll find the brands we enjoy.
Amazon will still enjoy its fat, abusive piece of the pie, and that’s fine. Some of us will still sell on that platform, and that’s fine. For everyone else, we have this wild frontier ahead of us.