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, who were operating Alaveteli, an online forum platform written in Ruby on Rails. Lütke was the company’s CTO until September 2008, when he was replaced by Cody Fauser.
Shopify launched its platform in June 2006. In 2010, Shopify started its Build-A-Business Competition, in which participants create a business using its platform over the course of six weeks. The winners of the competition receive cash prizes and mentorship from entrepreneurs such as Richard Branson, Tim Ferriss, Jason Fried, and Cassey Ho.
In 2012, Shopify acquired Select Start Studios Inc., a mobile app developer based in Waterloo, Ontario. In 2013, Shopify partnered with Amazon.com to launch Amazon Webstore service in Canada and Australia.
Later that year Shopify acquired Jet Cooper, a design studio based in Toronto. In 2014 Shopify launchedShopify Payments (formerly known as “Stripe”), which allowed merchants to accept credit cards without requiring a third party payment gateway.
Shopify has been profitable since 2015. It generated $100 million in revenue during 2014 and $105 million during 2015. During 2016, Shopify generated $191 million in revenue and $7 million net income.
In March 2016, Shopify acquired Boltmade Inc., a software development company based in Kitchener-Waterloo.
As of March 2017, Shopify has raised a total of $173 million over eight funding rounds.
What Is the Business Model of Shopify?
The business model of Shopify is simple. It charges merchants monthly fees ranging from $9 to $299 depending on the size of their business. It also charges transaction fees on sales made through its platform.
Starting a business is a risky proposition, and no platform or business model can guarantee success. Shopify is no exception. There are a number of things to consider before starting a Shopify business, including the cost of using the platform and the competition you’ll face from other Shopify businesses.
Additionally, it’s important to have a clear understanding of the Shopify business model and how it works. While the platform offers a lot of flexibility and features, it’s important to remember that it’s ultimately designed to make money for Shopify, not necessarily for you as the business owner.
Before starting a Shopify business, be sure to do your research and understand the risks involved.
