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Shopify focused on #ecosystem early and now paying $0.4B/yr to partners [Ecosystem playbook]

Shopify is one of the top B2B SaaS companies that focused on #ecosystem early. Last year it paid 💎 $411M to their App Store partners (8% of Shopify's $5B revenue) while in total their partners generated $32B Rev in their ecosystem 💡 ~7X Shopify’s Rev.


🎯 Here is a snapshot on how and why Shopify is building an ecosystem


Today Shopify is the best full-stack e-commerce solution outside of Amazon. It's for you, if you sell online and want to own brand/customers 100%.


Following its #partnerships with Flexport and acquisitions of 6 River Systems and Deliverr Inc., Shopify is becoming a fully integrated end-to-end logistics platform that will help you sell your products online and in-store and deliver them within 48h.





🚚 Since the early days its founder Tobi Lütke recognized that apps and partners were going to make a big difference in their #growth trajectory.


🛠️ AppStore


3yrs in (2009), Shopify opened API for partners who were building online stores for people, so they could customize these stores.


Partners started calling: “I'm making the same customization over and over again, can I maybe build an app for it and sell it to people?”


With these use cases in mind, devs started building on Shopify platform and also receiving a 20% commission on referred customers.


Today Shopify App Store has 8,000+ Apps. Btw, they stopped charging devs % on $1M/year in AppStore earnings (15% on >$1M).



💰 Shopify has 40K+ active referral partners


Think content creators, course educators, influencers, review sites who refer merchants to Shopify.

They receive 10-20% commission for the merchants referred.



➕ Shopify Plus


Shopify started with SMBs (subscription from $29/mo), and later landed big customers like Tesla (2013), PepsiCo, The New York Times.

In 2021 brands like Allbirds IPOed selling with Shopify.


These brands don’t pay $29/mo, of course. They use Shopify Plus - enterprise solutions built for scale.


These customers also require help and customization, now offered by Shopify Plus partners. The program selected a few hundreds of best partners (they have higher 20% commission, marketing support, etc).



🤝 Strategic alliances w/ consulting


To reach and serve more enterprise clients, Shopify partners with KPMG, Deloitte and EY.

~10K consultants have exposure to its platform.



⚡️ Strategic Commerce Partners


Important native checkout integrations on key services - TikTok, Instagram, Facebook, Google, etc.

Shopify powers e-businesses of many social influencers.



🚀 Strategic Product Partners


To enable shipping, payments, buy now - pay later, etc. Affirm, Klavio, Stripe, PayPal, Shippo, etc.



🗽 Result? A strong competitive moat


Shopify marketing spend (as % of sales) is >2X lower than that of Squarespace or BigCommerce, while it's Enterprise Value/Revenue is ~3X higher.



👋 More to be said about Shopify's #platform - TBC.

Sources: IR, keynotes.


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