Stats 4960F

Group 1: Gloria Spehar, Joseph Tischer, Yishan Zang, Rui Liu, Wenqing Qiu, Xin Wen

Proposed Business: Shopify

Vision:

Make commerce better for everyone, so businesses can focus on what they do best: building and selling
their products.

Mission:

Shopify’s mission is to provide a fast, responsive, reliable, and specialized e-commerce platform that
makes commerce better for everyone and delivers a better shopping experience for buyers everywhere.
Shopify prioritizes its merchants. Shopify aims to give you the tools to build your very own online store
where customers can actually get to know your brand.

Objectives:

Attract and retain merchants: As an e-commerce platform, Shopify thrives on the subscriptions of
varieties of merchants. Thus, one of their biggest goals is to attract and keep merchants. For example,
supplying resolution to their marketing or business strategy to help small businesses sell more self-
branded products, building and updating technologies as well as adding more functionality to the app.

Establishing brand recognition: It’s important for an e-commerce company to thrive by building brand
recognition, it helps Shopify to increase public exposure as well as informing customers their services,
such as taking advantage of advertising in social media, v blog, podcasts, google, Facebook, etc.

Increase sales of e-commerce platforms as well as merchants: Shopify keeps aligned with all businesses
on the platform, the more sell those businesses create, the more successful Shopify becomes.
Therefore, constantly providing businesses with resolution and advice facilitates all ranges of business to
grow together with Shopify.

Strategy:

Shopify is looking to grow their merchant base by spending on product and brand marketing. They also
want to form an early partnership with new merchants so that Shopify can grow alongside its
merchants.

To compete with other e-commerce platforms, Shopify must use all length to devise more online
channels to increase reaching range and markets for small businesses, meanwhile close gap between in-
person and digital commerce to encourage small businesses to move to online operations through their
website. Besides, data analytics and machine learning are Shopify’s competitive advantages, so we
should keep investing in those areas to supervising product development efforts, analyzing and
delivering rich databases.
Shopify gives merchants 14 days to try the platform, free of any cost. This enables the company to
attract business owners, give them a taste of how easy it is to set up their online platform, and decide
whether or not they’d like to continue to sell their goods on Shopify.

Shopify prides themselves on being user-friendly, it is one of the easiest ecommerce builders to help
beginners and small business owners. No prior ecommerce experience or coding knowledge is needed,
anyone can create their own online store with ease.

Business Model:

Shopify’s revenue is principally generated through the sale of subscriptions to their platform and the
sale of additional solutions to merchants. There are three primary tiers to Shopify’s monthly
subscription options; Basic Shopify, Shopify, and Advanced Shopify. Most merchants subscribe to the
two lowest tiers. However, Shopify’s gross merchandise volume comes from the Advanced plans. There
is also a top tier, named Shopify Plus. This tier is a service for enterprise customers that bring in higher-
volume sales. Enterprise contracts are also largely more stable, as they are usually required to sign
annual or multi-annual contracts that automatically renew.

Additional solutions offered by Shopify to their merchants are Shopify Payments, transaction fees,
Shopify Shipping, Shopify Capital, referral fees from partners, and sales of point-of-sale (POS) hardware,
to name a few.

- Shopify Payments: This is an integrated payment processing service that allows merchants to accept
and process payments online and offline. This is designed to drive higher retention amongst
merchant subscribers.
- Shopify Shipping: Allows merchants to select from a list of shipping partners that may buy and print
outbound and return shipping labels and track orders directly within the platform.
- Shopify Capital: Eligible merchants may secure financing and accelerate the growth of their
business. Shopify provides access to working capital, providing a loan to the merchants.

Difficulties and Assumptions:

Rapid growth may not be sustainable, as it depends on the company’s ability to attract new merchants,
retain revenue from existing merchants and increase sales to both new and existing merchants. This is
also a highly competitive business. Other ecommerce platforms, namely Faire, has been successful in
overtaking the European market of merchant-to-merchant wholesale.

Cyber-Security is a worry. The platform contains a large amount of personal information of merchants
and their customers. If this information becomes compromised, the reputation of Shopify will be largely
harmed.

Due to the fact that Shopify provides its services internationally, they are operating under the
assumption that these international relations will be sustainable in the future, and that no conflict will
interfere with their business.