Shopify's general manager reveals its last-minute sprint to include a tool for a new app to help small merchants take on Amazon and Walmart during COVID-19
Shopify launched a new mobile shopping app last week which provides small businesses with access to mobile shopping tools and infrastructure that allow them to compete with major retailers. While the app had long been slated for a spring launch, additional features focused specifically on local businesses were expedited in response to the coronavirus. "A local shopping feature, initially planned to release later this year, became a priority for inclusion at launch, as we saw the increasing importance of brands being supported by their local communities," Carl Rivera, general manager at Shopify, told Business Insider. Visit Business Insider's homepage for more stories.
Shopify is making it easier than ever for shoppers to find and make purchases online from local businesses — while giving small, independent companies a leg up to compete with major retailers. The e-commerce company launched Shop last week, a mobile shopping app "designed to create a more intuitive online shopping experience from product discovery to package delivery," according to the company. While the app had long been slated for a spring launch, additional features focused specifically on local businesses were expedited in response to the coronavirus, according to Shopify general manager Carl Rivera. "We revisited our strategy to see where we could make improvements to address the current situation," Rivera told Business Insider. "A local shopping feature, initially planned to release later this year, became a priority for inclusion at launch, as we saw the increasing importance of brands being supported by their local communities. We wanted to ensure Shop had an option to help make this easier. " In essence, the app provides independent businesses with mobile shopping tools they may not have had the resources or infrastructure for previously, creating a more level playing field to compete with e-commerce behemoths like Walmart and Amazon. Within Shop, users can search using local filters to identify nearby businesses offering shipping and pick-up in the area before paying directly in the app using Shop Pay, Shopify's own checkout system. The app allows users to make purchases from Shopify's more than 1 million partner brands, both major national brands and local companies, and then track them using Arrive, which uses proprietary technology to provide real-time status updates of packages.
The app is also designed to provide personalized recommendations, including sales and new products, based on order history. Rivera said users will be able to see recommendations from companies they've made purchases from in the past, as well as follow businesses directly in the app. "Almost all shopping platforms are about finding or discovering new brands," Rivera said. "As a shopping assistant, Shop is focused on making it faster and more convenient to check-out and track orders from the brands you love, and get updates tailored to you when they launch new products." Rivera said enhancing the functionality of mobile shopping is now more important than ever, as stores around the country remain shuttered to prevent the spread of the coronavirus. For the Shopify team, finding ways to support local businesses was "increasingly top of mind during COVID-19" as it became an increased desire among consumers. "As we imagined our latest move, we found that the best way to really support our merchants is to enhance the shopping experience for the buyer, and that was the starting point for Shop," he said. "We've seen a shift in buyer behavior from going online to going mobile to using native apps as they shop."SEE ALSO: Shopify is giving its employees $1,000 to furnish their work-from-home setups with whatever gear they need because of the coronavirus Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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Summary List Placement One of the most important steps an entrepreneur can take to adapt their...Summary List Placement One of the most important steps an entrepreneur can take to adapt their business during the pandemic is to build up their online presence. Whether you're setting up your very first ecommerce site, or expanding your services through new channels, now is the time to reach your customers where they're spending most of their time — online. Not all platforms are designed for every entrepreneur, so it's key to find the one (or ones) that fulfills your needs and caters to your audience. That's why we've broken business owners into four categories, based on what and how they sell: retailers, resellers, makers, and content creators. We've also noted where service providers might benefit from what these platforms offer. Here are the best platforms to use based on the type of entrepreneur you are and the type of market you want to reach. We also highlight the top features you can expect and what it costs to get started.5 platforms for retailers Shopify Use this ecommerce platform if you have a unique product or service you want to sell directly to your customers, and don't want to built out a website from scratch. Shopify powers more than one million ecommerce merchants globally, so it has the support, efficiency, and tools you need to match the retail experiences of companies like Allbirds and PepsiCo. Service providers can also add online orders through Shopify. Shopify also offers a built-in drop shipping service so you can start a business without having any inventory. This can be helpful for first-time entrepreneurs who want to dip their toes into running a small business, or it can be a way for established businesses to test new products with a minimal financial commitment. An additional feature to note is Shopify's recently added point-of-sale system which syncs from your brick and mortar shop to your online storefront. Cost: Monthly plans start at $29, which include website hosting, marketing tools, resources, and app integrations. Prices for additional features like domain names and website themes vary. To learn more, read this step-by-step guide to creating your Shopify store. » Instagram This social media app is quickly evolving into a shopping experience, making it more than just a marketing tool for your business. Instagram is common among direct-to-consumer brands that prioritize creative and engaging visuals just as much as the actual products. It's also a prime spot to reach young shoppers, as it's popular among Millennials and GenZers. Cost: It's free to set up a business account, which gives you access to engagement metrics and customer insights. Ads and boosted posts can cost as little as $0.70 per click and exceed $5 per click, depending on time, placement, and category, according to Hubspot. Alibaba Alibaba connects manufacturers and retailers who are looking to do larger volume transactions, including international trade. It launched an online wholesale marketplace for US businesses last year and has since doubled the number of transactions in this market. Rather than taking a commission of each sale, Alibaba only charges a fixed membership fee. Cost: Basic plans currently start at $2,399 per year. Amazon There is simply no larger customer base than Amazon. If your business needs online reach, it likely needs to be on Amazon. There are a dizzying array of options for individual use-cases ranging from larger manufacturers to custom shops, which we detail in our ultimate guide to getting started on the platform. Cost: Pro seller plans cost $40 per month, and most sales are subject to a 15% commission. Additional costs can quickly add up, with advertising fees and fulfillment charges necessary to compete in the crowded marketplace. To learn more, read this guide from real sellers about how to start a successful Amazon business or store. » Ecwid Ecwid is ideal for a retailer who is new to ecommerce and needs a solution to quickly set up multiple sales channels, as it syncs to social media and ecommerce platforms such Instagram and Amazon. According to the company, thousands of brands use Ecwid globally and account sign-ups doubled from March to April as more businesses went online during the pandemic. Cost: Free to set up an online store. Monthly plans starting at $15 will sync your store to your social media accounts and additional marketplaces. 4 platforms for resellers eBay Ebay is streamlining its small business user experience with a new Seller Hub for US sellers, but the 25-year-old marketplace generally remains the same. From electronics to fashion accessories to collectibles, the platform connects bargain-minded buyers and sellers around the world. Cost: Free to list, 10% transaction fee on all sales. Read about how one sneaker seller who prefers eBay over StockX made $1.5 million. » Poshmark If you're reselling brand-name clothing, accessories, and home goods, Poshmark is the place to be. The popular marketplace app also functions as a resale community and rewards sellers who engage with customers, participate in virtual shopping events, and promote other's listings. Once you've built up a loyal customer base and following, sellers can scale through Poshmark's wholesale channel. Cost: Free to use and set up your shop. Poshmark takes a 20% commission on sales $15 or more. For sales under $15, Poshmark charges a flat rate of $2.95. To learn more, read the ultimate guide to selling on Poshmark. » Depop Depop is one of the more fashion-forward resale sites on the internet, which is not a reputation it's earned by accident. Depop caters to a young, hip crowd of buyers and sellers, and the site deliberately casts its resellers as curators. Stylish users can turn their sense of taste into a lucrative side-hustle by establishing a unique aesthetic and then owning that niche. Depop is a great resource for anyone trying to sell used clothing, but for aspiring tastemakers it should be their home page. Cost: There is no fee to list an item, but Depop takes 10% of sales. Read how Gen-Z sellers are using Depop to turn their eye for clothing into their full-time jobs. Facebook Marketplace Although Facebook can be a useful tool to market any business, Facebook Marketplace functions as an ecommerce channel that caters well to resale items such as used furniture or thrift finds. Since customers can search for products based on their location, the platform gives sellers access to local communities to further bolster their customer base. Cost: Free to list items. Prices to promote listings and increase exposure vary based on time and location, among other factors. 4 platforms for makers Etsy If you're a creative entrepreneur, Etsy is the powerhouse of marketplaces with nearly five million active buyers. It can be your homebase for selling your products, or it can serve as an additional sales channel. Cost: Free to get started. Etsy charges 20 cents per product listing. To learn more, read our guide to setting up a successful Etsy store. » Faire Faire is a marketplace that connects independent designers with local shops to curate unique products that can't be bought elsewhere. If you make more of a product than you can sell on your own, Faire can help you reach retailers who are interested in hard-to-find items that they can't get anywhere else. Cost: 25% commission on first-time orders, 15% for follow-up orders sourced through the platform. Existing relationships that you bring to the platform are not subject to commission. Transactions are subject to a 3% processing fee. Wix Wix is expanding from its original role as a portfolio website host to a more full-featured ecommerce platform. Now, the platform used by creatives and designers of all kinds is available for entrepreneurs offering a broader array of products and services. If your business needs a turnkey solution to get online, Wix is a convenient place to start. Cost: Business plans start at $23/month and go all the way to $500/month for enterprise-grade support. Big Cartel Big Cartel is a marketplace for entrepreneurs to sell their work, build an online store, or run a business. The company launched in 2005 and has helped creators sell more than $2.5 billion of their work. What's more, Big Cartel doesn't take a cut of sales and only charges a monthly subscription plan. Cost: Big Cartel doesn't charge entrepreneurs who are selling five goods or less. After that, monthly plans start at $9.99 per month for 50 products and go as high as $29.99 a month for 500 items. 7 platforms for content creators YouTube YouTube is practically an industry of its own, and the opportunities for content creators to earn revenue are quite diverse. From advertising to memberships to merch, YouTube partners who meet certain eligibility criteria stand to make substantial revenues from posting engaging videos to the platform. Cost: Free to start uploading videos and growing an audience, but it can take a considerable investment of time and money before your channel is eligible for monetization. Commissions and fees on revenues vary based on a multitude of factors. Learn more about how YouTubers with 1 million subscribers break down their average earnings. » Patreon Whether you're already creating content or you're looking for an additional income stream, Patreon is designed to monetize your work outside of click- and ad-based models. Freelancers, entertainers, and creatives establish their own subscription levels based on what they offer, giving them direct access to their followers. Cost: Free to get started. Once you begin earning money, Patreon takes a 5-12% commission depending on the membership plan you choose. It also charges a standard payment processing fee per transaction. Twitch Where YouTube generally represents an ever-growing archive of videos, Amazon's Twitch is all about the real-time stream of live entertainment. Esport streamers in particular can generate large numbers of paying subscribers, who have propelled some creators to earn tens of thousands of dollars each month. Cost: Free to get started, subscription fees are generally split 50-50 between the streamer and Twitch. See Business Insider's coverage of how much money top Twitch streamers make on the platform. » Substack Writers are finding success monetizing their work through newsletters published on Substack. Like other platforms, it's free to get started, and the hard work of building an audience can take a considerable investment of time and money. Top writers on the platform boast tens of thousands of subscribers, with monthly subscriptions ranging from $5 to $49 each. Cost: 10% commissions, but only after you decide to start charging for subscriptions, and a payment fee of about 3%. See Business Insider's coverage of how individual writers are using Substack to make 6 figures off of their writing. Podia If you provide a service such as online courses, webinars, downloads, or memberships Podia gives you a platform to sell them. Whether you own a yoga studio and want to stream classes to members' homes, or you're an artist teaching DIY craft lessons, your YouTube Live and Zoom recordings integrate with your Podia storefront. You can also use a tiered membership model to give one member group exclusive access to certain products. Cost: Monthly plans are $39 and $79, depending on the level of services you need. OnlyFans Described both as "an Instagram for NSFW images" and "the paywall of porn," OnlyFans has become a cultural touchstone in the years since its creation. The premise is simple: Creators make content, put it behind a paywall, and then charge customers monthly subscriptions for access to their material. Most subscriptions run between $5 to $20 a month. Due to OnlyFans' lax content guidelines, the platform has become a critical resource for adult entertainers, who earn more money by monetizing their content on OnlyFans than they do by uploading it for free to ad-supported porn sites. OnlyFans also features content from workers such as fitness gurus, chefs, and video entertainers. Cost: Creators can make channels for free, but OnlyFans takes a 20% cut of all revenue. Read Business Insider's coverage of how sex-work entrepreneurs create massive social media followings and then funnel them onto OnlyFans. Fiverr Fiverr is a resource for freelancers and anyone looking to hire a freelancer. It solves a key pain point for many businesses: the lack of a centralized forum for freelancers. By bringing both parties to the same platform, Fiverr simplifies the transactional process between those seeking and those offering creative services. The site is divided into sections based on types of content, such as graphics and design, writing and editing, and programming and tech. Cost: All purchases are subject to a service fee of $2 on purchases up to and including $40, and 5% on purchases above $40. See Business Insider's coverage of a 27-year-old entrepreneur who uses Fiverr to make over $350,000 a year.
Shopify's CEO says Amazon isn't a competitor, but Amazon's CEO says it is. Here's what experts say the real relationship is. (AMZN, SHOP)
Amazon CEO Jeff Bezos wrote in his statement to the antitrust House committee last week that...Amazon CEO Jeff Bezos wrote in his statement to the antitrust House committee last week that Shopify is a new competitor. Shopify CEO Tobi Lutke, however, said Amazon is not a "direct competitor" during the company's earnings call last week. E-commerce experts say they're "indirect" competitors that effectively play in the same field. Visit Business Insider's homepage for more stories. Last week, the CEOs of Amazon and Shopify gave contrasting views about each other. In his statement to the antitrust House committee, Amazon's CEO Jeff Bezos singled out Shopify as a new competitor that's helping traditional brick-and-mortar stores launch their own online businesses. But Shopify's CEO Tobi Lutke seemed to disagree when he was asked during the company's earnings call about Amazon as a competitive threat. He said Shopify "doesn't directly compete" with Amazon, instead highlighting its partnership with the online retailer. "I don't think we have any particular insights beyond just fellow travelers in a world of technology," Lutke said. The strikingly different perspectives of the two CEOs begs a question about the true nature of their relationship with each other: Are they competitors? "I think [Lutke] was being diplomatic," said Tom Forte, an analyst at D.A. Davidson, who asked the question about Amazon during Shopify's earnings call. "I really believe Shopify is a competitor to Amazon, and in some instances, the anti-Amazon." Forte said Shopify serves as an "antidote" to the growing power of Amazon and other tech giants in the e-commerce space because it's helping over a million small businesses to compete with them — while fighting over the same market share. Shopify sells the tools needed to launch an online store, including software to run a website and accept online payments. But unlike Amazon, it doesn't sell anything directly to consumers or operate a marketplace where other merchants can sell their products. "Shopify's ultimate mission is to enable sellers to compete more effectively with Amazon," Forte said. The competition is expected to accelerate going forward as Shopify continues to add more services. Most recently, it launched a new service called Shopify Fulfillment Network, which helps store and ship products on behalf of sellers. That service is in direct competition with Amazon's Fulfilment by Amazon, a key piece of its third-party marketplace that generated $53 billion in sales last year. 'Indirect' competitors Amazon is the de facto leader in online retailing, with a market cap of roughly $1.6 trillion. Shopify, with a value of about $125 billion, is much smaller in size, but is starting to catch up. In fact, Shopify helped facilitate more product sales than eBay for the first time in the second quarter, making it the second largest e-commerce service behind just Amazon, according to Marketplace Pulse. Perhaps the better way to describe their relationship is to call them "indirect" competitors, according to Rick Watson, CEO of RMW Commerce Consulting. While they play in the same e-commerce field, Amazon and Shopify are targeting different users, he said. For example, Amazon generates the bulk of its sales from end shoppers, while Shopify makes money by targeting business owners that sell online. Although Amazon has its own marketplace used by third-party sellers, merchants are unlikely to choose one over the other when selling online because each platform serves a different purpose. "It's not mutually exclusive," Watson said. "Direct competition is almost out of the question." That doesn't mean the dynamics won't change in the future. Amazon previously launched a Shopify-like webstore business that shut down in 2015, and there's no reason to believe it won't try it again given the company's ever-growing ambitions. Meanwhile, there's been plenty of speculation about Shopify potentially launching its own marketplace for years. If they end up competing more directly, however, Shopify seems to have one advantage over Amazon: user trust. Mark William Lewis, founder of Netalico Commerce, a consulting agency for online sellers, said the sellers he works with generally prefer to start on independent sites powered by companies like Shopify, before expanding to Amazon's marketplace. More importantly, he said, many sellers are worried about Amazon's dual role of being both a seller and a marketplace, an issue that's been at the center of the recent House antitrust investigation. Recent reports of Amazon copying best-selling products from its sellers and repeated claims of unfair suspensions that lead to unexpected losses have amplified those concerns, he said. Still, Shopify seems mindful of Amazon's presence in the e-commerce space, Lewis said. It's common for Shopify to mention Amazon in company presentations, often creating an impression that they're winning share against the e-commerce giant, he said. (referring to the slide below that was used during last year's Shopify Unite conference.) "Maybe Shopify is not a competitor, but an alternative to Amazon," Lewis said. "But they definitely look at Amazon as an 'us vs. them' situation." In 2018 Amazon's GMV was $277 billion. It's kind of weird that @Shopify and @tobi left out @Magento's $100 billion GMV on this chart from #ShopifyUnite as they would be right below Amazon at ~20%. pic.twitter.com/jwbEvcrLl4 — 🍕Mark William Lewis (@mrloo) September 13, 2019 SEE ALSO: Amazon quietly launched a new website for its big ad conference, which returns for its second straight year amid the company's surging digital ad sales Join the conversation about this story » NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly