Company Case: Shopify: An E-commerce Giant That Doesn’t Sell to End Users
What do Budweiser, Tesla, The New York Times, Bombas Socks, and Kylie Cosmetics have in common? Each company sells direct-to-consumer (DTC) merchandise primarily online. But more, each has an online store created, managed, and powered by Shopify—the biggest e-commerce company that most people have never heard of. In the age of DTC companies, Shopify is behind-the-scenes business that takes care of everything for anyone wanting to sell something online—a genuine end-to-end commerce platform for everyone from the young entrepreneur who has never started a company to large, well-known corporations needing an online store.
The concept is simple. For a monthly fee, Shopify helps individuals or corporations sell their merchandise online. It supplies everything merchants need to go online, including customizable store templates, inventory management systems, analytics, payment processing, and shipping. Shopify also provides consultative services and a network of partners to handle manufacturing, promotion, and order fulfillment. Shopify’s platform not only sells merchandise directly from the merchant’s online store or mobile app, it plugs into a growing number of broader platforms, including online marketplaces like Amazon, social media channels like Instagram Stories, and even brick-and-mortar locations. The system is completely cloud-based, which means zero investment in hardware and software. It also means that business owners can manage things from anywhere on any device with an internet connection. In short, Shopify’s mission is to make e-commerce easier and better for everyone.
Although that mission seems a bit lofty, Shopify is well on its way. In 2015, the nearly 10-year-old company went public at a value of $1.3 billion. The preceding year, Shopify’s 140,000 stores had sold more than $3.7 billion worth of merchandise. And Shopify has been lauded by experts and organizations the world over for its growth and impact, including being named as one of the world’s most innovative companies by Fast Company this year. How has Shopify come so far so fast yet remain relatively unknown to the average consumer?
Questions
6-16. Compare and contrast the nature of the business market structure and demand relative to consumer market structure and demand for Shopify’s services.
6-17. Discuss how a potential client for Shopify might go through the business buyer decision.
6-18. How does the concept of the buying center apply to Shopify?
6-19. How much of a threat does competition pose in Shopify’s future?
