Is Shopify Losing Money?

Shopify is a Canadian e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems. Shopify offers online retailers a suite of services “including payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants.

Shopify was founded in 2004 by Tobias Lütke, Daniel Weinand, and Scott Lake after attempting to open Snowdevil, an online store for snowboarding equipment. Lütke used the Ruby on Rails framework to build Snowdevil’s online store, which was launched after two months of development.

Weinand and Lake then decided to make their own Ruby on Rails-based platform which would be easier to use. The pair launched Shopify in 2006, and its platform has since been used by over half a million businesses in 175 countries.

Shopify has been profitable since 2015. In 2019, it reported US$1.58 billion in revenue with a net income of US$131 million.

Shopify went public on the Toronto Stock Exchange in 2015 and today has a market capitalization of over US$30 billion. In 2018, Shopify acquired warehouse management system (WMS) provider OrderBot and point-of-sale (POS) system providerKitKong.

Shopify is one of the most popular ecommerce platforms on the planet – but that doesn’t mean it’s perfect. In fact, there are a number of ways in which Shopify could be losing money without you even realizing it.

1. Shopify Could Be Losing Money on Shipping

One potential area where Shopify could be losing money is on shipping. When you set up your Shopify store, you have the option to choose between a few different shipping carriers – USPS, UPS, FedEx, and DHL. Each carrier has different rates for shipping, and those rates can change depending on the weight and size of your order, as well as the distance it’s traveling.

What this means is that if you’re not carefully monitoring your shipping costs, you could be paying more than you need to – and eating into your profits as a result.

PRO TIP: Please be aware that the article “Is Shopify Losing Money?” may contain inaccurate or misleading information. Shopify is a publicly traded company, and as such, is required to disclose its financials. However, the author of this article appears to be basing their information on unaudited financial statements, which have not been verified by an independent third party. Furthermore, the author does not seem to have a solid understanding of Shopify’s business model. As such, we would caution readers against relying on this article for accurate information about Shopify’s financials.

2. Shopify Could Be Losing Money on Payments

Another potential area where Shopify could be losing money is on payments. If you’re using Shopify’s default payment gateway (Shopify Payments), you’re paying 2% per transaction – but that fee goes up to 2.9% + $0.30 if you’re using a different gateway.

3. Shopify Could Be Losing Money on Apps

While there are some great free apps available in the Shopify App Store, many of the most popular apps come with monthly fees – and those fees can add up quickly.

4. Shopify Could Be Losing Money on Credit Card Fees

If you’re not careful about how you process credit card payments, Shopify could be losing money on those fees as well.5. Shopify Could Be Losing Money on Customer ServiceFinally, one potential area where Shopify could be losing money is on customer service.While most businesses need to budget for customer service in some way shape or form, the fact that Shopify offers 24/7 support means that they’re likely spending more on customer service than other ecommerce platforms.It’s impossible to say for sure whether or not Shopify is losing money – but there are definitely some potential areas where they could be bleeding cash.If you’re using Shopify for your ecommerce business, it’s important to keep an eye on your costs so that you don’t end up losing money yourself.

Morgan Bash