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What does it take to build 🛠️ a thriving SaaS marketplace: Shopify case study

What does it take to build 🛠️ a thriving SaaS marketplace and partner ecosystem?

Today Shopify has 10,000+ apps in their App Store, paying partners $561M per year for them. Let’s take a look at how it all started.

🎯 From the early days Shopify believed that App Store is essential for their product's success, just like referral partner program is critical to accelerate its adoption.

They launched their App Store in 2009 with two primary goals:

- Expanding their platform's functionality through third-party apps from independent developers.

- Growing Shopify’s merchant base through partner referrals.

In the early stages, they perceived the program as an investment in their future. It was a “cost center”.

They offered prizes and financial support to their inaugural batch of developers, to effectively kick-start the ecosystem.

💡 The impact? In less than five years, over 500 partners were brought onboard. Most importantly, it created a flywheel effect.

Today, Shopify has

10,000+ apps on App Store available for their merchants

85% of Shopify merchants rely on at least one App Store app to run their business, each using an average of 6 apps.

40,000+ referral partners

The number of partners who referred at least one new merchant to Shopify has been increasing steadily year on year.

💰 The success of Shopify ecosystem benefited their partners incredibly

App Store partners, including developers, designers, and agencies in the Shopify ecosystem, earned a staggering 7X of Shopify’s total revenue.

This amounted to:

$32B Partner revenue generated in 2021

45% Partner revenue growth YoY

💎 Even as Shopify ecosystem grows, they keep partner incentives attractive

Partners can earn a recurring commission of 10-20% indefinitely.

Shopify recently eliminated all commissions for developers earning less than $1 million annually on their platform. This change, down from a 20% commission, nurtures smaller developers to build on Shopify.

🤝 But Shopify's support to partners extends beyond financial incentives

They invest heavily in helping partners succeed, offering guides, webinars, and community events to facilitate quick onboarding and #growth.

For instance, they helped Bold Apps, one of their early partners, grow from a team of four creating the first Shopify app working in a basement to 10X their headcount in 18 months. This led to the creation of dozens more apps, contributing back to the ecosystem.

Shopify also fosters a 900,000-strong community of its Merchants and Partners.

Today Shopify is one of a few SaaS companies that defined what a successful B2B “ecosystem” means.

It took:

- a strategic vision that API-enabled App marketplace is essential

- commitment to the success of the partners and consistent support

- building a partner and merchant community around the company.


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