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Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

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Re: Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

#11

Post by kolbe »

I don't get it at all. In my model, Shopify spends 75% of Gross Profit on sales to simply maintain existing customer levels. It doesn't seem like customers are very sticky, so they constantly have to pay huge amounts for sales to get new customers.

So, what's the best case scenario? They go from $800m in revenue now to $5bn? Even if they don't increase R&D, that means they're profiting $500m a year. That's an 80 P/E for what I consider to be a very optimistic 6x revenue growth extrapolation. Is there some other huge business (like Facebook's untapped user data in 2012) that isn't making itself known in their financials?

Re: Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

#13

Post by ceejayoz »

easytiger wrote: post #10
ceejayoz wrote: post #6

Earlier quoted context omitted.

Does that reflect a difference in how payments are handled? I can connect my Stripe account to Shopify, but I can't do that on eBay.

What does that have to do with revenue vs profit?

I'm asking if buying something on eBay technically means paying eBay (revenue) that they then pay out to the seller in a way that it wouldn't with Shopify's Stripe integration.

OP didn't say anything about profit.

Re: Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

#15

Post by ceejayoz »

notyourwork wrote: post #14
blawson wrote: post #12

Earlier quoted context omitted.

Shopify grew revenue by 50% in Q2, eBay by 2%.

eBay has also been around for how long? That is not really a proper comparison.

It would explain why the market caps and revenue numbers diverge.

Re: Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

#19

Post by scabbycakes »

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.

Re: Now Bigger Than eBay, Shopify Sets Its Sights on Amazon

#20

Post by blairanderson »

DavidAdams wrote: post #9

I know that a lot of activity on Shopify is from ambitious but deluded people setting up dropshipping businesses. Shopify is just selling picks and shovels to a lot of prospectors in a particularly unfruitful gold rush. I'm wondering whether they'll see a contraction as the enthusiasm wears off.

Your point is accurate, but they also power some massive eCommerce businesses and growing number of enterprise shops.

Their biggest investments are for their subscribers that ACTUALLY sell stuff. Dropship-dreamers are super scared of actually subscribing but they are the vocal majority because of guru's and such.

Its all about growing GMV / PLUS / CAPITAL / FULFILLMENT and those are all hitting +50% YOY

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