Shopify Vs Amazon – Shopify Reaches Final ‘Boss’ Battle

 

 

Shopify has been on a very visible ascendance in recent years…

It’s stock has become a darling of Wall Street, and it’s platform became the focus of a virtual army of hungry young teenage male internet marketers on Youtube, obsessing over it’s use in creating “passive income” 🙂

Indeed, “Shopify Gurus” and their paid courses became practically an entire industry in and of themselves through much of 2018 or 2019:

 

And the stock has been on a parabolic upward slant:

 

But now, it appears that Shopify has finally made it all the way to the end of it’s arc; leaving it’s old intermediate-level opponents in the dust.

From James Brumley at The Motley Fool:

… during the quarter ending in June, Shopify’s merchants sold $30.1 billion worth of goods, up 119% year over year. eBay’s total gross merchandise volume came in at $27.1 billion, up 26%.

It’s the first time Shopify outpaced eBay in terms of total volume of goods sold, but given what we know about both companies, it somehow doesn’t seem like the last time it will happen.

It should be noted that Shopify’s superiority in facilitated sales doesn’t necessarily translate into greater revenue or earnings. Shopify’s top line only reached $714 million, versus eBay’s revenue of $2.9 billion. eBay earned $770 million in operating income Shopify’s operation barely broke even.

Given eBay’s 10-year head start, though, the pace at which Shopify is catching up with eBay is concerning to say the least.

 

This brings Shopify face to face with the baddest end-of-level boss in the US ecommerce game.

As Brumley continues:

Shopify’s pace of progress points directly to a long-standing reality Amazon has been able to ignore that eBay couldn’t afford to shrug off. That is, Amazon is big enough to dictate to its sellers how they’re going to utilize its marketplace platform — it’s worth the stringent rules and lack of options. eBay’s sellers must also use eBay’s selling platform as it stands. But, given eMarketer’s estimate that eBay enjoys less than 5% of the United States’ online shopping market share versus Amazon’s 39%, eBay isn’t in a strong position to dictate how its vendors operate.

Enter Shopify.

It was started in 2004 as an online selling alternative to eBay AND Amazon, empowering users to custom-build their own online storefronts.

It was a slow start. As recently as 2015, its full-year revenue was only $205 million, driven by gross merchandise volume of $7.7 billion. As tensions between (too) many of Amazon’s sellers and the company grew, though, Shopify was found as a compelling alternative. Its tools allow customers to manage an e-commerce operation at their own websites rather than rely on Amazon’s marketplace.

Accelerating the adoption of self-managed online shops was and is the growing acceptance of direct-to-consumer. More consumers are increasingly comfortable with buying products directly from a brand rather than an intermediary such as Amazon.com. eMarketer predicated in April that direct-to-consumer sales in the U.S. alone would reach $17.8 billion this year, almost tripling 2017’s figure of $6.9 billion. Similar growth is expected going forward.

 

Is Shopify ready to take on Mr Bezos and his behemoth?

Probably not…

But the mere fact that Amazon has become Shopify’s primary adversary is testament to its success.