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How Selling Began on Shopify: The Origins and Evolution of Ecommerce
Introduction
Shopify has become one of the world’s leading ecommerce platforms, empowering entrepreneurs and businesses of all sizes to build and manage online stores. However, Shopify did not gain its immense popularity overnight. The beginnings of selling on Shopify can be traced back over 15 years to when the company was founded.
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This article will explore the origins of Shopify, how its business model and platform capabilities have evolved since launch, the growth of its app and integration ecosystem, and some key developments that enabled independent sellers and major brands alike to leverage Shopify for their ecommerce needs. Examining the history of selling on Shopify provides insights into the current state of ecommerce and where this technology may be headed next.
Founding of Shopify and Early Business Model
Shopify was founded in 2004 by Tobias Lütke, Daniel Weinand, and Scott Lake after attempting to open an online snowboard store and struggling with the limitations of existing ecommerce platforms. The founders saw the potential to create a system that would make selling online easier for small independent businesses.
The Shopify platform officially launched to the public in 2006, describing itself as “Retail 2.0” and offering core functionality like a store builder, cart and checkout capabilities, and support for payments, shipping, and inventory management. Early pricing was based on the number of products sellers wanted to list in their store.
In the first few years after launch, Shopify focused on simplifying the technical aspects of managing an online store. The platform gave entrepreneurs access to robust ecommerce capabilities without needing to understand web development and design. This enabled more people to start selling online.
App Store and Integration Ecosystem
A defining aspect of Shopify’s value proposition has been its app store and integration ecosystem. Launching in 2010, the Shopify App Store gave merchants access to a growing library of tools created by third-party developers to enhance their stores.
Some popular early app categories included marketing, accounting, shipping, and POS integration. This significantly expanded the functionality merchants could get from the Shopify platform. The app store also offered developers opportunities to build businesses by creating solutions for Shopify merchants.
Over the past decade, Shopify’s app ecosystem has ballooned to over 6,000 apps. It is now a core part of Shopify’s business model, with the company taking a revenue share from app subscriptions and purchases. The app ecosystem allows Shopify to focus on enhancing core platform capabilities while letting partners specialize in other areas.
Opening Shopify to All Types of Sellers
Another key milestone was Shopify opening up beyond just small and emerging brands to sellers of all sizes.
In 2010, Shopify launched Shopify Plus to target larger merchants selling over $1 million annually. Shopify Plus promised higher scalability and additional features like a dedicated merchant success manager. This enabled more established brands to leverage Shopify’s simplicity and flexibility.
Shopify also began actively catering to individual sellers and makers around this time. Features like Shopify POS and Shopify Lite reduced required investment and enabled very small merchants, even temporary pop-up sellers, to accept payments and build an online presence.
Continually expanding addressable market size by accommodating different types of merchants has been an ongoing strategic focus and contributed greatly to Shopify’s growth.
Omnichannel Commerce
As offline to online convergence accelerated in retail, Shopify recognized the need to integrate both physical and digital sales channels. The Shopify POS app brought embedding Shopify store functionality into brick-and-mortar seller operations in 2013.
Shopify expanded omnichannel capabilities over the following years, including features like local pickup and delivery, shipping to merchant locations from online orders, and in-store return capabilities. The platform also integrated with modern point-of-sale systems.
These omnichannel features helped sellers sync their online and offline operations, sharing critical data like inventory availability across channels. This enabled merchants using Shopify to elevate both their physical and digital commerce operations.
Simplifying Payments and Shipping
Two underlying challenges in operating an online business are accepting payments and fulfilling orders via shipping or other methods. Shopify has invested deeply over the years in improving capabilities around payments and shipping.
On the payments side, Shopify offered integration with major payment gateways from its earliest days. The company has since obtained its own payment processor licenses to give merchants more competitive rates. Shopify Pay was also launched in 2013 to create a seamless one-click checkout experience.
For shipping, Shopify began offering its own branded discounted rates along with automation features. The Shopify Fulfillment Network created in 2019 leverages Shopify’s scale to offer merchants lower shipping rates and outsourced warehousing services. Merchants can also utilize third-party logistics apps from Shopify’s app store.
Continually elevating the payments and fulfillment infrastructure available has reduced headaches for Shopify sellers and removed friction from the buyer experience.
The COVID-19 Ecommerce Boom
The COVID-19 pandemic triggered rapid acceleration of ecommerce adoption as social distancing requirements kept shoppers home. Many brick-and-mortar stores were forced to temporarily close their doors.
Shopify was well positioned to empower businesses impacted by the pandemic to pivot online quickly. The company rapidly launched new features and initiatives to help merchants adapt to the “new normal” of selling online.
Shopify enabled merchants to showcase local pickup and delivery options, redirected marketing spend to digital channels, created gift card capabilities to help merchants drive immediate sales, and made raft of app store tools free for merchants.
The company also collaborated with Google and Facebook to launch programs helping small businesses leverage digital capabilities and worked with governments on economic stimulus initiatives for entrepreneurs.
Coming out of the COVID-19 pandemic, ecommerce penetration advanced nearly 5 years by some estimates. The crisis spotlighted Shopify’s strengths in flexibility, digital transformation, and supporting sellers through unexpected hardship.
The Road Ahead
The first online sale in history took place nearly 30 years ago. Looking back over Shopify’s 15+ year journey shows just how much innovation is still happening in the rapidly evolving world of ecommerce.
Shopify today sits at the center of a thriving ecosystem helping entrepreneurs digitally transform their businesses and connect with modern buyers. The question looking ahead is: where does Shopify – and online retail broadly – go next?
Upcoming priorities include expanding internationally, enhancing social and conversational commerce, leveraging augmented reality virtual reality for digital shopping experiences, maximizing opportunities in mobile commerce, building faster and more flexible logistics infrastructures, and applying next-generation technologies like machine learning to take personalization and marketing sophistication to new levels.
There is still enormous room for innovation in making commerce more seamless. Shopify is poised to continue leading that charge by constantly asking “What else can we simplify for sellers?” The merchandise may have changed since that first online sale three decades ago, but the shop counter is still open.
Conclusion
The history of selling online through Shopify mirrors the history of modern ecommerce itself in many ways. From humble beginnings trying to make opening a store online easy, Shopify now powers over a million merchants globally ranging from fledgling startups to mega brands.
Platform evolution continues rapidly as Shopify builds tools addressing new commerce channels, integrates next-gen technologies like AI, and expands globally. The COVID-19 pandemic was the latest inflection point demonstrating Shopify’s strengths in simplicity, supporting seller resilience, and enabling digital adaptation.
With online retail still rapidly advancing, Shopify appears poised to continue growing alongside sellers and pushing innovations making commerce ever more seamless. The next decade promises even more creativity in not just what merchants sell online but how they connect with and understand buyers. Shopify aims to keep empowering merchants to build businesses future-proof for the next generation of retail.
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