4 ms·

So Shopify charges 2.9% + $0.30 to retailers for purchases in the store, but they charge 20% for developers to sell those retailers an app... Hard not to compa

by zaroth 6y ago

So Shopify charges 2.9% + $0.30 to retailers for purchases in the store, but they charge 20% for developers to sell those retailers an app... Hard not to compare this against Apple, where the total revenue generated by the Shopify App Store is perhaps around $50 million versus the Apple App Store which is more than $50 billion in digital goods & services ($500 billion including physical goods & services).

pikelet 6y ago
And with the only payout option being PayPal, the fees are even higher…
nickjj 6y ago
That's what happens when you have a monopoly on your own app store. I have nothing against Shopify (I've even built an app for a customer once like 8 years ago), but the only reason they charge 2.9% + $0.30 and not 20% for transactions is because Stripe, Square and PayPal all charge 2.9% + $0.30. What's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. If there were no price fixing surely one of them would drop to 2.8% + 30c to gain an edge in market share but they don't.
- adventured 6y ago
  > hat's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. Most likely none. To be collusion they have to be actively working together to do it. Pricing to match or at least be competitive with your peers, isn't collusion. If you are competing with the other players and you look at their prices (in this case, entirely public prices), then match, it's not collusion. It's extremely unlikely they're secretly conspiring to hold that line. At this point the business margins are doing the work to provide resistance to compete on undercutting the 2.9% + $0.30. It's nothing more than a: you move and we'll move stalemate; you don't move, we won't move. It's unspoken and very common in business. The cloud companies such as DigitalOcean, Vultr, Linode do it as well. Their plans have been quite similar for many years now. The processors are not aggressively undercutting to advantage for the same reason those cloud companies have stopped doing that frequently, the margin has gotten a lot tighter and nobody is eager to go further. Each notch they go lower becomes increasingly painful.
  - nickjj 6y ago
    > It's nothing more than a: you move and we'll move stalemate; you don't move, we won't move. It's unspoken and very common in business. That sounds very much like the definition of collusion. An unspoken agreement that says "you don't move, we won't move".

by zaroth 6y ago

pikelet 6y ago

And with the only payout option being PayPal, the fees are even higher…

nickjj 6y ago

That's what happens when you have a monopoly on your own app store. I have nothing against Shopify (I've even built an app for a customer once like 8 years ago), but the only reason they charge 2.9% + $0.30 and not 20% for transactions is because Stripe, Square and PayPal all charge 2.9% + $0.30. What's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. If there were no price fixing surely one of them would drop to 2.8% + 30c to gain an edge in market share but they don't.

adventured 6y ago
> hat's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. Most likely none. To be collusion they have to be actively working together to do it. Pricing to match or at least be competitive with your peers, isn't collusion. If you are competing with the other players and you look at their prices (in this case, entirely public prices), then match, it's not collusion. It's extremely unlikely they're secretly conspiring to hold that line. At this point the business margins are doing the work to provide resistance to compete on undercutting the 2.9% + $0.30. It's nothing more than a: you move and we'll move stalemate; you don't move, we won't move. It's unspoken and very common in business. The cloud companies such as DigitalOcean, Vultr, Linode do it as well. Their plans have been quite similar for many years now. The processors are not aggressively undercutting to advantage for the same reason those cloud companies have stopped doing that frequently, the margin has gotten a lot tighter and nobody is eager to go further. Each notch they go lower becomes increasingly painful.
- nickjj 6y ago
  > It's nothing more than a: you move and we'll move stalemate; you don't move, we won't move. It's unspoken and very common in business. That sounds very much like the definition of collusion. An unspoken agreement that says "you don't move, we won't move".