Why do you need an eCommerce platform?

This one should be evident. An eCommerce platform is on our list of tools every eCommerce company should have regardless of their size. An eCommerce platform will form the backbone of your digital infrastructure. It can manage your front-end (customer facing experience on your website) as well as back-end (order management, inventory, etc.)  

What we like about Shopify: 

Shopify is a story of compounding advantages. What started as a snowboard store in 2006 (check out the original website here) has grown into a behemoth of a company with over 9,000 employees even after a recent RIF. This compares with 1,000 employees at WooCommerce the nearest public competitor. Shopify has used that lead to become the best in the space. 

Blocking & Tackling

Shopify covers all of the blocking and tackling of running an eCommerce business well. Collecting payments - check. Optimized checkout flows – check. Offering shipping options - check. Creating order labels - check. Hosting and keeping your website up during spikes in traffic – check. Fraud protection – check. All of the must haves for any eCommerce business are handled well by Shopify. If these things don’t work flawlessly, then no other features matter. Shopify has invested heavily to ensure that all of these elements are robust.

Themes (Templates)

Shopify calls its templates themes, and they are some of the most user friendly out there. They offer 11 free themes built in the latest Shopify Online Store 2.0 architecture, and there are over a hundred paid options offered on their site ranging from $200 to $350 per theme and more through third-party sites. A well-designed theme is crucial for giving your brand legitimacy at launch. Make sure your website doesn’t look like it was designed by your brother-in-law using Dreamweaver in 1997 (unless that’s the look you’re going for). Using pre-built themes, you can create a beautiful website without ever touching a line of code. If you stick to a pre-built theme and the theme editor, you are set up to have a site that both looks good and performs well. Someone that is reasonably tech savvy could have a store up and running after a weekend of work.

Customization

Shopify themes come with enough personalization to ensure your brand doesn’t feel generic. Their editor is intuitive and easy for someone who has never created a website before to set up a store front. While some design oriented folks might want more customization options within the editor, Shopify offers enough customization to fit most use cases. If something is not possible to customize within the editor you can always use it to inject custom HTML or CSS but proceed with caution because this introduces the potential for bugs and broken pages. With the updates in the Online Store 2.0, it is now possible to add and configure apps directly in the theme editor without having to touch the theme’s code. 

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Checkout

Shopify partnered with an MBB consulting firm to run a study that compared conversion rates across eCommerce platforms. The results? Shopify conversion rates beat the competition by an average of 15% and up to 36%. We have some questions about the methodology like how were the 'like for like' selected, but we generally agree with the sentiment of the study. Shopify checkout trumps the competition. One page checkout will soon be available to all merchants which is a huge win. We heard from folks already on Shopify who saw 10%+ increases in conversion by implementing one page checkout. Additionally, Shopify has over 100M members that have opted into Shop Pay which allows for one click checkout with Shop Pay. When a prospective customer with Shop Pay hits your storefront, Shopify can recognize them if they've used the platform recently and pre-fill information.

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There’s an App for that

Want GDPR compliance (data protection required in the EU)? There’s an app for that. Want a section with shoppable User Generated Content (UGC)? There’s an app for that. Want to offer subscriptions? There’s an app for that. You get the point. There are over 8,000 apps and plugins that are created by third-party developers which greatly expand the abilities of Shopify. The average Shopify store uses 6 apps and the largest use many more. Because it’s the largest player in the space, it has attracted the most developers to expand the functionality of Shopify’s core offering. Nearly all the tools we recommend have seamless Shopify integrations and many of the complaints we heard from eCommerce operators about other recommended tools came from poor integrations with Shopify competitors like WooCommerce. By choosing Shopify, you will ensure you get the most out of all of your other eCommerce tools.

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Scalability

Shopify is unique in that its tool can both easily onboard a new merchant making their first sale and scale with that company through IPO. With other competitors, there will be a natural maturation away from the platform and onto something more robust. While there is a natural evolution of companies to move away from certain Shopify solutions e.g., moving from Shopify email to Klaviyo (our recommended email marketing platform), we spoke with many $100M plus merchants that still use Shopify for the bulk of their infrastructure. Shopify has grown along with brands that were started on the platform and has increased its focus and support of larger businesses. From multi-currency with Shopify Markets, to a POS system to integrate physical retail, Shopify will help you every step of the way. By choosing Shopify, you are choosing a platform that can scale with your business and meet its needs every step of the way.   

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What we don’t like about Shopify:

Speed

Shopify stores are not the fastest. The slower page speed will negatively impact SEO rankings as Google uses this as an important driver of their page rank algorithm. The slower load times are why many eCommerce companies decide to go ‘headless’. We think the out-of-the-box Shopify stores are fast enough for most eCommerce companies starting out but would like to see improvements here as Shopify rolls out updates. 

Flexibility of templates

While Shopify’s themes allow for a lot of customization within their visual editor, there are limits where custom code will be required. A website creator like Webflow has a much steeper learning curve but allows for far greater customization of the look and feel of a website within their editor. Webflow lacks the eCommerce tools to be a true competitor to Shopify, but we are interested to see a professional version of Shopify’s editor that allows for even more visual customization without the need to bring in external help. 

Variant limits

While it’s easy to import products to Shopify and its native inventory management system is solid, there are inherent limits on product variation possibilities in Shopify. Shopify allows for a maximum of three variants (e.g., size, color, material) and there is a cap of 100 combinations of any given product. BigCommerce allows for up to 600 combinations. While the 100 combinations should be enough for most use cases, this can become an annoying limitation for companies with complex product catalogs.

Dashboard

Shopify dashboards cover the basics well, but many users want greater granularity and control in their dashboarding and reporting and end up installing third-party apps for this. The Shopify basic plan comes with basic pre-built reports of key metrics (sales, sessions, orders etc.) and its Advanced and Shopify Plus plans allow users to create custom reports in addition to the pre-built dashboards. The custom reports are great, but they have their limitations. Want to track customer cohorts over time? You’ll need a third-party app. Want to track the performance of key pages in your funnel? You’ll need a third-party app. Because Shopify handles everything surrounding an order, it will always be the source of truth for all companies when it comes to order information, but many eCommerce companies are looking for granular data not available in their dashboards or reports.  

App Store Philosophy

Shopify has made the strategic decision to focus on core eCommerce functionality which they handle extremely well and leave everything they deem not core to be addressed by app developers in their app store. This leaves room for often dominant companies to come in and offer expensive apps for features outside of Shopify’s core functionality. Take Avalara for instance. Avalara has a near monopoly on state sales tax remittance software. We would love to see Shopify offer competing products that they develop themselves to ensure healthy price competition in the app store.

Shopify Pricing: 

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In January of 2023, Shopify raised their prices for the first time in 12 years. They raised prices by 33% on their most popular plans although the price increase is somewhat hidden by the fact that their website now quotes the monthly price when billed yearly. As always, whisper 'Head West' at checkout for a special discount.

Shopify Plus Pricing:

Shopify Plus pricing scales with use. It costs the greater of $2,000 or 0.25% of sales volume per month.

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When to switch to Shopify Plus?

We typically see it recommended that merchants switch to Shopify plus at around $1M annual run rate revenue, but we recommend waiting until $3-4M in revenue. The main benefits that we heard in talking with merchants who made the switch were customized checkout, access to the script editor, more robust automations with Shopify Launchpad and Flow, unlimited staff accounts (vs 15 seat limit with the Advanced plan), lower transaction fees, and better support from Shopify. 

Read our full guide on when to upgrade to Shopify Plus

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Competitors: 

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SMB eCommerce Platforms

WooCommerce – The distant second in terms of popularity among eCommerce companies. WooCommerce is the number one WordPress plugin for eCommerce. The experience with WooCommerce is not very user friendly. Unless you already have a WordPress site that you are looking to quickly monetize, we don’t recommend WooCommerce.

BigCommerce – Used by fewer brands than WooCommerce. Need to create a landing page or blog post? It’s going to be a challenge on BigCommerce as it is not optimized for anything outside of product listings. Last year BigCommerce partnered with Bolt to offer one-click checkout. We are continuing to monitor their progress but think there is a long way to go before they truly challenge Shopify’s dominant product.

Squarespace – Squarespace is a website builder that has bolted on very basic eCommerce functionality that we don’t recommend.

Wix – Wix is slightly less expensive than Shopify, but similar to Squarespace, we don’t recommend it due to its limited eCommerce functionality.

Webflow – We love Webflow (it’s what this site was built on), but we don’t recommend it for eCommerce businesses. While Webflow is great for building blazing fast websites that look good, Webflow’s eCommerce functionality (inventory management, dashboarding, plugins etc.) doesn’t come close to matching Shopify. Webflow also has a somewhat steep learning curve. Be prepared to learn the fundamentals of HTML and CSS through their excellently done video tutorials if you plan on designing your site yourself.

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Enterprise eCommerce Platforms

Salesforce Commerce Cloud – Salesforce Commerce Cloud is used by larger companies like Adidas and Lacoste but will require a much heavier investment in development resources to customize, lacks a thriving third-party app ecosystem, and will come at a significant price premium to Shopify (we spoke with companies that compared the options and found the total cost of ownership TCO of SCC to be 5x Shopify).

Magento – Magento now called Adobe Commerce is targeted towards mid and large size eCommerce businesses and suffers from many of the same issues as Salesforce Commerce Cloud. It will require a much higher investment in technical staff for implementation and integration, has fewer third-party apps, and will be significantly more expensive than Shopify.