Justin Winter answered:
Shopify is best use case for $0 to $1M ish, depending on product line, how many transactions that makes up, and if their are some custom things that are not possible on Shopify that realistically lead to huge gains that would cover more costs of a custom solution with something like magento.
I recommend Shopify to everyone starting out. That's what we used at Diamond Candles up until about a $5M run rate. We were/are growing quickly so we hit a point where payoff of customizing checkout flow, add of social sign on, etc. that could not be done because of Shopify, would cover and surpass costs of a more custom option.
Best to think about this simplistic example.
View the ecom platform market in about 3 buckets.
1. Starting out: $0-$1M ish
2. Wow looks like you have a business: $1M-$20 or 50ish
3. You are/could be publicly traded: $50M+
Take a look at usage #'s for market share size from independent third party analytics tools from Builtwith:
http://trends.builtwith.com/shop/Shopify/Market-Share
http://trends.builtwith.com/shop
http://trends.builtwith.com/shop/hosted-solution
Just because something is found on the web more isn't the full picture. Ie. I could make a blogging platform and have a bunch of scripts and bots install it on millions of domains and I would have majority of the market for blogging platforms (ya that would take a while and isn't a realistic scenario but you can get the point).
Providers dominating the different categories by companies in those areas actually doing volume and being succsessful?
1. Shopify, BigCommerce, Volusion, Magento GO,
2. Magento (varying editions), Yahoo Stores, Symphony Commerce
3. Demand Ware, GSI Commerce, Magento (varying editions)
At the end of the day a good illustration goes like this.
A truck and a moped are two different things. A truck is not trying to out 'moped' a moped and a moped not trying to out 'truck' a truck. They are both perfectly suited to different applications, situations, needs, and circumstances. The same goes with who you choose to handle your ecom platform.
For 2-3 search for internet retailers first 500 and second 500 lists. Pull off all ecommerce companies doing between $10-$50M as an example. Use the builtwith.com chrome toolbar to tell you what platform they are using. Hire someone for $2 an hour via odesk to make a spreadsheet of everything and the make a pretty little pie chart. Now you know what each revenue volume level chooses as 1, 2, 3 preferred platforms.
Option 3 as a side note but very important one, is primarily a platform and commerce as a service model with companies like Demand Ware and GSI Commerce leading the market with platform and services including but not limited to customer service for the brand, fulfillment, marketing services, website product photography etc. Their pricing models are based on gross revenue share. ie. SportsAuthority.com does $100M online this year, GSI takes 30% of that to cover everything.
(I am not sure who Sports Authority uses, just an example)
You can almost pick any traditional brick and mortar retailer and if they have a website where they sell things, they all do, GSI or DW are the people behind the scenes running the call centers, shipping etc.
Diamond Candles, my company, who started on Shopify decided to not go with a the market dominating option of Magento for a few reasons. One of which being upfront cost for an agency or on staff magento CTO type. We decided to partner with a newer entrant, Symphony Commerce, which blends the 3rd category model of platform plus service.
Rev. cut is significantly smaller than providers in category 3, but still get benefits of volume savings on shipping volume, scalable customer support that can handle rapid growth and occasional spikes without us having to worry about scaling or implementing best practices, and a fully customizable platform as a service so to speak that doesn't require us to have in house tech but where we are essentially renting part time ecommerce engineers from with resumes that list Google, FB, Twitter, Magento, Amazon, etc.
So in summary. If you are <$1M in revenue just roll with Shopify. Greater than that but less than $50M ish then I would recommend looking into Symphony.
If Symphony is interested in letting you in then you won't have to incur the upfront costs of an agency or implementation and you will have an ongoing partner equally incentivized i your long term success financially which I prefer as opposed to an agency model which economically is incentivized to offer a one time finished product and their revenue is not tied to my financial success.
It is the closest thing to an equity partner while returning our full equity.
7 answers
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about 11 years
