Published on February 09, 2010 by Jesse Storimer
Where I give three reasons why the Shopify platform is a big deal for developers and two reasons why it hasn’t caught on (yet). In doing so I will compare the Shopify platform to other, somewhat similar, platforms, namely the Facebook developers program and the Apple App Store.
Disclaimer: I work at Shopify.
The Shopify platform provides a unique market that hasn’t ever been more easily exposed. Let me explain with some examples.
Facebook: The Facebook developers program gives an application developer access to a massive market. I forget the current numbers but Facebook has something like 300 million users, each one a potential user of your application. However, Facebook is a free service. It provides a lot of value at no charge. The challenge for a Facebook application is trying to convince its users that it is providing a service valuable enough to warrant payment, even if that compensation is not very high, it can be subsisted with the sheer volume of users for your application.
Apple: Apple’s App Store provides access to a large market of paying customers. iPhone users are paying customers (albeit of some terrible service provider) and had to pay for the iPhone, and there are a lot of iPhone users, again I don’t have numbers, but those things are everywhere. Apple has proved that people are willing to pay for iPhone applications. However, and I’ll bet this is true if you ask any iPhone user, most App Store purchases are made on a whim. An application provides a novel concept and warrants a one-time $1 purchase. However if that application instead required recurring billing, I have a feeling that most purchases wouldn’t last past the first month.
Shopify: The Shopify platform, at first glance, offers a less lucrative market. There are orders of magnitude fewer potential users. Shopify currently boasts approximately 5,000 active sellers, this is your potential user base. However, unlike Facebook, every Shopify user is a paying customer and most are paying significant monthly fees. And unlike iPhone users, Shopify users are typically using this service to power their business and personal income. Shopify has gone to the trouble of filtering out users who are willing to pay for online services, and they are offering developers, through the Shopify platform, the chance to sell their online service to these users.
Unlike the App Store, Shopify users are unlikely to purchase a novel application on a whim. Rather, they will be willing to pay good money for an application that will drive their business. If you come up with an application that lets them process their orders faster, thereby providing better customer service, or increase sales then it seems likely that users will be willing to pay, and continue to pay every month, for a service providing that.
Simplicity of getting started
It’s very simple to get started with the Shopify platform. Especially if you are a Ruby on Rails developer. There is a Rails plugin that you can install that gets you up and running very fast. The plugin handles the Shopify platform authentication scheme for you, it also provides a simple ActiveResource API to access Shopify stores.
I don’t want to show any code examples because the power of the API is that its implemented as with a REST interface as XML over HTTP, so can be accessed from any programming language: Ruby, Python, PHP, Objective-C, etc. You can check out the API docs to see some sample HTTP requests/responses and there is also a screencast showing how to get up and running with a Rails app.
A real strength of the API is the simple, yet flexible, Billing system. The Apple App Store has very simple pricing, you fill in a form that lists your price, they go to the trouble of collecting the money, storing/charging the credit cards, and so on, then you get 70% of that. The Shopify Billing API is similar, except you create the charges for your application programatically, in your code, rather than in a form field.
This opens up whole new billing avenues for your application. Rather than charging every customer the same amount when they install the app, you have a lot of choices. Want to provide a beta period? Trial accounts? Charges based on the number of products that a merchant has? Based on how much the merchant is paying Shopify? Multiple subscription plans? This is all possible, and even simple, with the Shopify Billing API. Just like Apple, Shopify handles the storage of credit cards, collection of money, and you get 80% of your charges. The Shopify Billing API even provides a little more sugar than that, things such as upgrading/downgrading subscription plans is built into the API and the logic for pro-rating plan changes is handled by Shopify!
Ease of marketing
I won’t spend too much time talking about this point. Shopify provides the same kind of marketing as Facebook and Apple. Your application will be listed for free in the Shopify App Store, which is integrated into the admin area of every Shopify customer. Your application may also be featured in the App Store, on the Shopify blog, etc. The Shopify App Store has support for reviews and categories to make your apps easier to find.
So why hasn’t the Shopify App Store taken off yet? Why isn’t everyone jumping on that wagon?
Problem: Shopify Developers aren’t Shopify Users
This is a problem that Facebook and Apple don’t have. Undoubtedly, Every Facebook developer is a Facebook user, they know how the software works and they know how people are using it. The same is true of the iPhone, anyone developing apps for the iPhone is an iPhone user. They have one of these devices and they know the ins and outs of the device, the expected behaviour of the interface, how much apps typically cost, and so on.
Conversely, very few software developers also happen to be Shopify merchants. Sure, there must be some crossover, but most software developers won’t know what it’s like to run an online store. This is a stumbling block for developers to get started with the Shopify platform. For example, an iPhone user, in the process of using their iPhone, may find a problem that an app could solve, so they can go and write this app, put it on the App Store, and make a buck. However, since most developers aren’t also going to be users of Shopify, this process isn’t really possible.
I was lucky enough to attend FutureRuby this past July and had several conversations with developers about this very topic. They had heard of the Shopify platform and could see the benefits, however they didn’t know what kinds of apps Shopify users were looking for. These developers weren’t e-commerce merchants themselves, so they didn’t know where to begin when thinking about contributing to the Shopify platform.
A possible solution to this problem might be having Shopify app developers work closely with specific merchants to build an app that that a particular merchant might find useful and, most likely, other merchants would find useful. Any developers interested in this approach should probably start by looking around the Shopify forums.
Problem: Lack of a Killer App to Lead the Way
The Apple App Store has done a great job in this area. Stories abound of small developer shops, usually a team of 2-3, pulling in a hundred thousand, or even a million, dollars per month from their iPhone apps. Then there is the story of iWik, the wikipedia browser, selling 50,000 copies in its first week after just a few days of development.
The Shopify App Store isn’t without its success stories however. Fetch, an application helping you sell digital goods, has been going strong for 3 years now with many happy customers. There is also the story of MNDCreative releasing an iPhone app that integrates with Shopify. That company was acquired by Shopify and is now leading mobile development there.
So the Shopify platform already has several success stories. None of them are yet big enough to really inspire others to jump on the bandwagon, but I think it’s just a matter of time.Tweet