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As someone who worked developing Shopify apps (NOT a Shopifyt employee to be clear), I can attest to the incredibly high percentage of shops that evaporate from

As someone who worked developing Shopify apps (NOT a Shopifyt employee to be clear), I can attest to the incredibly high percentage of shops that evaporate from the platform on a nonstop basis. Something like 80% of the people that would install our apps in their shops would be gone or in limbo after a couple months. (Not an app uninstall, their shops actually no longer existed.) The charts we see from Shopify like this always say "Number of merchants" and the number climbs up towards a million, but at what point do they start excluding their delinquent/disappearing merchants? I'm not convinced they're factoring in churn.

throwaway082319 7y ago
Indeed -- same position here. The trouble with developing Shopify apps is that your own application churn is additive with Shopify's. While that's the case with every platform, Shopify's churn rate is eye-wateringly high.
- fourseventy 7y ago
  I'm about to dev a Shopify app myself. How hard is it to stand out on the shopify app store and get some traction?
  - scabbycakes 7y ago
    REALLY hard. What you might be seeing a lot of these days is that app dev companies go around buying up other well-established apps and/or their development companies just because they can't find an app to make or get traction with apps they make at this point in the game. Even with great teams and money coming out their ears, they're having a hard time getting established with new apps. There are 20 apps all doing the same thing competing with each other and all of them have had years head start, so having zero reviews compared to hundreds of favourable reviews can almost be insurmountable for a newcomer. Having said that, if you have 50 subscribers for your possibly obscure app, you can still eke out a good living. Keep in mind there's a review process though, so just because you make it doesn't mean it will be published in their marketplace. Shopify tries hard to maintain an air of fairness but a large part of getting visibility with your app is who you know, too.
    - jammygit 7y ago
      I suppose this is a commoditize your compliment situation?
    - scarab 7y ago
      Great points. Re: "Keep in mind there's a review process though" - My experience of this is that Shopify wouldn't approve my App because there were existing Apps in their store which they thought were too similar. So make sure it's sufficiently differentiable to existing Apps (no, I don't know what that means either!)
  - drchiu 7y ago
    It's difficult, as others have mentioned. I have a few legacy side projects on Shopify. At this point, I would say treat it as a marketing channel for your SAAS, but don't rely on it solely as a means of distribution. Some merchants on it are professionals and operate their business that way. Many merchants (and I don't have a percentage) are somewhere in the prosumer to wantrepreneur range and have unrealistic expectations. Much of Shopify's strategy here, in developing a developer ecosystem, is to have developers effectively do technical support for its customer for free. I've troubleshooted (more times than I can count) theme, general platform, and other app issues. A while ago when Shopify was down after a merchant installed my app complained that I broke their Shopify store when in fact the entire Shopify platform was having a hiccup.
- Axsuul 7y ago
  While that may be true, consider the amount of customers that wouldn't have signed up in the first place if it weren't for Shopify's app store.
mikeryan 7y ago
This seems like a "feature"? Not to discount the churn numbers - but being able to quickly and at low cost set up a high quality commerce site where folks don't have to be heavily invested seems like they're providing the service as intended. I enjoy the Shopify experience from the Vendors that use it and do stick around.
- scabbycakes 7y ago
  I suppose as a user you could definitely look at it that way. As an investor I'd be worried about losing their churned-out merchants to other platforms like Etsy and Woocommerce and Weebly and about ten other platforms hacking away at their knees. To be fair to Shopify though, I think they know they've already lost the battle for the little merchants and have fixated on other things.
  - zawaideh 7y ago
    I'm assuming The shops are startups that failed after s while. They are enabling them to be started quickly.
    - TylerE 7y ago
      There are tons of scammers using Shopify. They’ll put up dozens of storefronts selling name brand sneakers or AirPods at “90%” off and stuff like that. Of course, they never ship product (because they don’t have any) or if you’re lucky you get some super low quality alibaba knockoff.
      - IAmGraydon 7y ago
        With all due respect, if you are foolish enough to believe you can buy name brand sneakers and AirPods at 90% off from anywhere, you had it coming. There are many ways a scammer can set up a quick site, hook up a payment processor and start taking money. This is not a Shopify problem. It’s an internet-wide problem.
bonestamp2 7y ago
> I'm not convinced they're factoring in churn. I guess it depends on why you're interested in the user number to begin with. I mean, from an investor standpoint, their profits keep growing so I'm not as interested in the exact number of merchants actually using the platform (assuming it's still a reasonably high/diverse number).
lunaru 7y ago
A huge part of Shopify's revenue comes from Shopify Plus. We're also fellow app developers[1], and we've noticed that if you offer value to their higher end businesses, you'll be running at churn rates that are much lower than what you'd think you'd get with the "average Shopify merchant". Something like 70% of small businesses fail[2], so it's not surprising you'll see a large amount of churn if your audience is the broad set of all merchants, including those that are probably just kicking around the idea of spinning up a drop shipping business on the side. That doesn't mean there aren't great businesses in the Shopify ecosystem. [1] - https://apps.shopify.com/reamaze https://apps.shopify.com/reamaze [2] - https://www.fundera.com/blog/what-percentage-of-small-businesses-fail https://www.fundera.com/blog/what-percentage-of-small-busine...
- Axsuul 7y ago
  Also a Shopify app developer here[1]. My software targets established online sellers and my churn is considered low. [1] https://www.trunkinventory.com https://www.trunkinventory.com
  - dragonsh 7y ago
    You are right the churn is very high because one thing shopify can't do is get traffic for those online stores. So non tech savvy goes to Shopify open a store, because it's easier than running $5 VM to manage many similar e-commerce platform. But then that person needs to work himself for traffic acquisition on his own site which is expensive and after a while stops it. Launching a store is easiest thing to do with plethora of other platforms besides Shopify. On Amazon the story is different, store owner focus on to bring real traffic where buyer has a intention to buy. So from day one store owners focus is on getting sales. On Shopify first problem is getting traffic then convert to sales then to manage sales and delivery, store owner does all these which can be done on plethora of other tools including closed source or open source, with similar ease of use. Whether it's Amazon or eBay they are spending a lot on getting traffic to those vendors who sale through them. Shopify has been a loss making entity for last three years without significant money on traffic acquisition for it's vendors, they do spend to get more store owner traffic not on buyer traffic. [1] So I am not sure if Shopify can even be compared with eBay or Amazon. Reason eBay is affected is due to Amazon nothing to do with Shopify which is just a tool to launch an online shop. [1] https://finance.yahoo.com/quote/SHOP/financials?p=SHOP https://finance.yahoo.com/quote/SHOP/financials?p=SHOP
downandout 7y ago
A big factor in their churn rate is the fact that a significant chunk of their growth has come from make money online gurus. Search YouTube for “Shopify dropshipping” or similar and you’ll see what I mean. It became viral among the scam artists, who all came up with different systems to sell, with one thing in common among them: Step 1 is to go open a Shopify account. When the systems that most of these gurus sell fail to work, their students simply abandon their Shopify stores. I would never buy shares of Shopify for this reason. For now, they continue to grow because there are still thousands of gurus pushing Shopify, but we are reaching the end of that cycle. As soon as a new fad takes hold among the gurus, Shopify will be a ghost town.
- jeromegv 7y ago
  Nothing you say is backed by data. Their revenue keeps growing with Shopify payments (they take a share of every transaction), which is an entirely different metric than the number of stores. If those were all empty store with no sales that would show. But that’s not the case. Also huge growth with their enterprise solutions shopify plus. Read their financials, it’s all there and easy to understand.
  - downandout 7y ago
    Nothing you say is backed by data. And none of the data you pointed to disproves anything I said. Additionally, there is some data to back up my position: while it’s true that it would be impossible for anyone to have data on how many accounts have been opened due to the guru effect, a quick search of YouTube should help you understand the gigantic scale of this issue. Here’s why you have not disproved a single thing I said. Most of these gurus are preaching facebook ads + Shopify + dropshipping. As long as these students keep putting money into FB ads, and the gurus keep recruiting people, Shopify payments sales volume will continue to grow - whether or not the guru students are actually making a net profit after expenses. But of course that won’t continue forever, as people don’t have infinite sums of money to lose, and most will lose money. Right now, there is still enough momentum to keep it growing. I would imagine that within a year though, you’ll start seeing it level off or start to decline, as the gurus move onto the next fad. Once that starts happening, the whole house of cards comes tumbling down.
martco 7y ago
This explains how I got scammed on Shopify last summer. I’m not talking about a missing product label or receiving a counterfeit item. I paid $1200 for a Shopify product (drone) and received a box with a poster tube inside of it that said “the world is yours”. Nothing else. The merchant was gone that day. The real scammers live on Shopify.
- newguy1234 7y ago
  Now you know why people call it scamify :)
- Snackchez 7y ago
  I know this won't add to the conversation, but your comment made my day. I got a good laugh out of this. Thanks!
- peach 7y ago
  Da fuq? Did you manage to get anything back?
  - tehlike 7y ago
    Credit card chargeback would bring everything back.
- qaq 7y ago
  Imagine the surprise of a dude who ordered the poster "the world is yours" and got a drone.
cardy31 7y ago
Sure but churn is a poor stat to look at. Shopify could minimize churn by only taking on big pre-established brands. But that probably wouldn’t be best for the company. So high churn it is, which hasn’t hurt them yet.

throwaway082319 7y ago

Indeed -- same position here. The trouble with developing Shopify apps is that your own application churn is additive with Shopify's. While that's the case with every platform, Shopify's churn rate is eye-wateringly high.

fourseventy 7y ago
I'm about to dev a Shopify app myself. How hard is it to stand out on the shopify app store and get some traction?
- scabbycakes 7y ago
  REALLY hard. What you might be seeing a lot of these days is that app dev companies go around buying up other well-established apps and/or their development companies just because they can't find an app to make or get traction with apps they make at this point in the game. Even with great teams and money coming out their ears, they're having a hard time getting established with new apps. There are 20 apps all doing the same thing competing with each other and all of them have had years head start, so having zero reviews compared to hundreds of favourable reviews can almost be insurmountable for a newcomer. Having said that, if you have 50 subscribers for your possibly obscure app, you can still eke out a good living. Keep in mind there's a review process though, so just because you make it doesn't mean it will be published in their marketplace. Shopify tries hard to maintain an air of fairness but a large part of getting visibility with your app is who you know, too.
  - jammygit 7y ago
    I suppose this is a commoditize your compliment situation?
  - scarab 7y ago
    Great points. Re: "Keep in mind there's a review process though" - My experience of this is that Shopify wouldn't approve my App because there were existing Apps in their store which they thought were too similar. So make sure it's sufficiently differentiable to existing Apps (no, I don't know what that means either!)
- drchiu 7y ago
  It's difficult, as others have mentioned. I have a few legacy side projects on Shopify. At this point, I would say treat it as a marketing channel for your SAAS, but don't rely on it solely as a means of distribution. Some merchants on it are professionals and operate their business that way. Many merchants (and I don't have a percentage) are somewhere in the prosumer to wantrepreneur range and have unrealistic expectations. Much of Shopify's strategy here, in developing a developer ecosystem, is to have developers effectively do technical support for its customer for free. I've troubleshooted (more times than I can count) theme, general platform, and other app issues. A while ago when Shopify was down after a merchant installed my app complained that I broke their Shopify store when in fact the entire Shopify platform was having a hiccup.
Axsuul 7y ago
While that may be true, consider the amount of customers that wouldn't have signed up in the first place if it weren't for Shopify's app store.

mikeryan 7y ago

This seems like a "feature"? Not to discount the churn numbers - but being able to quickly and at low cost set up a high quality commerce site where folks don't have to be heavily invested seems like they're providing the service as intended. I enjoy the Shopify experience from the Vendors that use it and do stick around.

scabbycakes 7y ago
I suppose as a user you could definitely look at it that way. As an investor I'd be worried about losing their churned-out merchants to other platforms like Etsy and Woocommerce and Weebly and about ten other platforms hacking away at their knees. To be fair to Shopify though, I think they know they've already lost the battle for the little merchants and have fixated on other things.
- zawaideh 7y ago
  I'm assuming The shops are startups that failed after s while. They are enabling them to be started quickly.
  - TylerE 7y ago
    There are tons of scammers using Shopify. They’ll put up dozens of storefronts selling name brand sneakers or AirPods at “90%” off and stuff like that. Of course, they never ship product (because they don’t have any) or if you’re lucky you get some super low quality alibaba knockoff.
    - IAmGraydon 7y ago
      With all due respect, if you are foolish enough to believe you can buy name brand sneakers and AirPods at 90% off from anywhere, you had it coming. There are many ways a scammer can set up a quick site, hook up a payment processor and start taking money. This is not a Shopify problem. It’s an internet-wide problem.

bonestamp2 7y ago

> I'm not convinced they're factoring in churn. I guess it depends on why you're interested in the user number to begin with. I mean, from an investor standpoint, their profits keep growing so I'm not as interested in the exact number of merchants actually using the platform (assuming it's still a reasonably high/diverse number).

lunaru 7y ago

A huge part of Shopify's revenue comes from Shopify Plus. We're also fellow app developers[1], and we've noticed that if you offer value to their higher end businesses, you'll be running at churn rates that are much lower than what you'd think you'd get with the "average Shopify merchant". Something like 70% of small businesses fail[2], so it's not surprising you'll see a large amount of churn if your audience is the broad set of all merchants, including those that are probably just kicking around the idea of spinning up a drop shipping business on the side. That doesn't mean there aren't great businesses in the Shopify ecosystem. [1] - https://apps.shopify.com/reamaze https://apps.shopify.com/reamaze [2] - https://www.fundera.com/blog/what-percentage-of-small-businesses-fail https://www.fundera.com/blog/what-percentage-of-small-busine...

Axsuul 7y ago
Also a Shopify app developer here[1]. My software targets established online sellers and my churn is considered low. [1] https://www.trunkinventory.com https://www.trunkinventory.com
- dragonsh 7y ago
  You are right the churn is very high because one thing shopify can't do is get traffic for those online stores. So non tech savvy goes to Shopify open a store, because it's easier than running $5 VM to manage many similar e-commerce platform. But then that person needs to work himself for traffic acquisition on his own site which is expensive and after a while stops it. Launching a store is easiest thing to do with plethora of other platforms besides Shopify. On Amazon the story is different, store owner focus on to bring real traffic where buyer has a intention to buy. So from day one store owners focus is on getting sales. On Shopify first problem is getting traffic then convert to sales then to manage sales and delivery, store owner does all these which can be done on plethora of other tools including closed source or open source, with similar ease of use. Whether it's Amazon or eBay they are spending a lot on getting traffic to those vendors who sale through them. Shopify has been a loss making entity for last three years without significant money on traffic acquisition for it's vendors, they do spend to get more store owner traffic not on buyer traffic. [1] So I am not sure if Shopify can even be compared with eBay or Amazon. Reason eBay is affected is due to Amazon nothing to do with Shopify which is just a tool to launch an online shop. [1] https://finance.yahoo.com/quote/SHOP/financials?p=SHOP https://finance.yahoo.com/quote/SHOP/financials?p=SHOP

downandout 7y ago

A big factor in their churn rate is the fact that a significant chunk of their growth has come from make money online gurus. Search YouTube for “Shopify dropshipping” or similar and you’ll see what I mean. It became viral among the scam artists, who all came up with different systems to sell, with one thing in common among them: Step 1 is to go open a Shopify account. When the systems that most of these gurus sell fail to work, their students simply abandon their Shopify stores. I would never buy shares of Shopify for this reason. For now, they continue to grow because there are still thousands of gurus pushing Shopify, but we are reaching the end of that cycle. As soon as a new fad takes hold among the gurus, Shopify will be a ghost town.

jeromegv 7y ago
Nothing you say is backed by data. Their revenue keeps growing with Shopify payments (they take a share of every transaction), which is an entirely different metric than the number of stores. If those were all empty store with no sales that would show. But that’s not the case. Also huge growth with their enterprise solutions shopify plus. Read their financials, it’s all there and easy to understand.
- downandout 7y ago
  Nothing you say is backed by data. And none of the data you pointed to disproves anything I said. Additionally, there is some data to back up my position: while it’s true that it would be impossible for anyone to have data on how many accounts have been opened due to the guru effect, a quick search of YouTube should help you understand the gigantic scale of this issue. Here’s why you have not disproved a single thing I said. Most of these gurus are preaching facebook ads + Shopify + dropshipping. As long as these students keep putting money into FB ads, and the gurus keep recruiting people, Shopify payments sales volume will continue to grow - whether or not the guru students are actually making a net profit after expenses. But of course that won’t continue forever, as people don’t have infinite sums of money to lose, and most will lose money. Right now, there is still enough momentum to keep it growing. I would imagine that within a year though, you’ll start seeing it level off or start to decline, as the gurus move onto the next fad. Once that starts happening, the whole house of cards comes tumbling down.

martco 7y ago

This explains how I got scammed on Shopify last summer. I’m not talking about a missing product label or receiving a counterfeit item. I paid $1200 for a Shopify product (drone) and received a box with a poster tube inside of it that said “the world is yours”. Nothing else. The merchant was gone that day. The real scammers live on Shopify.

newguy1234 7y ago
Now you know why people call it scamify :)
Snackchez 7y ago
I know this won't add to the conversation, but your comment made my day. I got a good laugh out of this. Thanks!
peach 7y ago
Da fuq? Did you manage to get anything back?
- tehlike 7y ago
  Credit card chargeback would bring everything back.
qaq 7y ago
Imagine the surprise of a dude who ordered the poster "the world is yours" and got a drone.

cardy31 7y ago

Sure but churn is a poor stat to look at. Shopify could minimize churn by only taking on big pre-established brands. But that probably wouldn’t be best for the company. So high churn it is, which hasn’t hurt them yet.