Friday November 06, 2020 |Q&A

Will Shopify build a marketplace?

Shopify has seen enormous growth this year, enough to draw attention from mainstream media despite relatively little consumer-facing product. Rather than focusing on attracting customers, Shopify has given merchants all the tools needed to run a business online and left it up to those businesses to generate traffic and sales.

This year Shopify, introduced Shopify Pay as a consumer-facing product that enables fast payment on any Shopify merchant. The company also revamped a mobile app that allows customers to track orders from any Shopify merchant. The newly named Shop app has some features similar to a marketplace, yet is far from what most have come to expect from a modern day marketplace.

Shopify has stayed away from a marketplace in the past. Presumably, it's at least in part an effort to keep the focus on the individual store brands. Even relatively merchant-friendly platforms like Etsy make it difficult for brands to truly stand out from competitors. Lower prices, knockoffs, and a multitude of variations end up a click away, and marketplace becomes the brand most-remembered by helping the customer find the 'best' product.

By bringing all merchants into a marketplace, Shopify would also encounter new issues. There are over 2 million active Shopify sites and a huge variation of quality among brands and products. Rarely is Shopify called upon to question for the products sold by merchants in the same way Amazon is held accountable. There are plenty of questionable items sold on Shopify that wouldn't pass muster on the Amazon marketplace.

This would seemingly leave the option of developing a highly-curated marketplace, where Shopify restricts who and what can be sold on the marketplace. It's hard to know exactly where lines would be drawn, and it would pose some logistical problems in offering plans that include access to the marketplace for some businesses, while others are deemed unfit.

Shopify is not in the business of creating a marketplace platform that detracts from brands. From the beginning, Shopify has worked to "arm the rebels."" As much as Amazon is a customer-centric business, Shopify is an entrepreneur-centric business. The marketplace-like features from Shop Pay and the Shop app continue to help brands, rather than pit them against each other. It seems unlikely Shopify will abandon that focus in the foreseeable future.

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