Shopify is processing over $260k per minute right now
incoming.shopify.com
incoming.shopify.com
Looks like we placed our bet on the right horse.
imho xal / Tobi should get far more recognition for what he built. Shopify is really quite remarkable and in a league of its own.
Curious if they'll ever beat Amazon / Alibaba volume.
> Gross Merchandise Volume (“GMV”) for the third quarter was $3.8 billion, an increase of 100% over the third quarter of 2015. GMV processed through Shopify Payments grew to $1.5 billion, which accounted for 39% of GMV processed in the quarter.
https://press.shopify.com/releases/shopify-announces-third-q...
Source: By some metrics my company is > 1% of Adyen... or Stripe... or whatever competitor we decide to use at the moment.
If a single company can be as much as 1% of an entire payment provider, they gotta be quite small, right? Well, that's what I think every day when I see news about them :D
It seems that both Adyen and Brainsomething processed over 50B last year whereas Stripe didn't.
Stripe didn't publish numbers (I'd dare saying because they are very small and that would scare big companies away), but the valuation at 5 Billion dollars indicates that they are less than 1/10th of the aforementioned providers.
Conclusion: Stripe = The hype underdog with strong marketing :D
Cheers to the CEO of Shopify answering a question on Hacker News and on Black Friday - that is awesome!
Their RoR stack might have gone out of fashion but it seems like they consistently made the right decisions considering a lot of their customers rely on the Shopify platform for their livelihoods and not just to express their opinions in 140 characters.
I'd be great to see a chart with this data. I wonder if they'll release it or if someone is writing a script to scrape their data.
Sorry, but you're just outright wrong.
Cyber Monday has set sales records every year for 3-4 years in a row.
Why? It's often been on, or very near, the last payday before Christmas for people on monthly salaries.
Then almost every day over the next 2 weeks would beat that.
That's roughly US$50m a minute. In the first hour of the promotion they did about 2/3rds of that volume, which is insane.
The answer is no.
So if you are a startup, growing fast, and bringing in well over $12mil/month... a lot of employees makes sense.
https://press.shopify.com/releases/shopify-announces-third-q...
EDIT: I was wrong, see response in the comments
This seems like a great start up to learn from, I wonder how they carved out an ecosystem from under amazon and such. Seems awesome.
If you take that $260k/minute number and assume it's true for the whole day (clearly it won't be overnight, but bear with me), that's (260,000 * 60 * 24 =) $374M. A third of a billion, a far cry from 1/300.
The numbers are big but far from giants like Amazon and Alibaba: http://www.cnbc.com/2016/11/11/singles-day-news-alibaba-pois...
I wish they still did that, it was mind boggling even many years ago.
Either way, looks neat (and some crazy numbers)
Whether this was written in PHP, .NET or Ruby.
"simple checkout store" - brilliant.
From the sounds of it we are all devs here. And, as experienced devs, we all know that saying "you just have to ..." will be your famous last words.
Adding more servers, as many of you will know, only works up to a point. From there you have to further build out databases, redis, memcache, load balancers, etc. As much as we like to fantasize about a "go faster" button which just adds more compute, often the amount of memory or CPU you have isn't the bottleneck.
When it comes to sharding, you're not wrong. Sharding off of a primary key is something that is easy to grasp. Hell, it's not overly special (especially these days). However, that doesn't mean it's easy.
If you think building a commerce platform is easy, I'd encourage you to apply. Maybe you have the type of skills we are looking for?
EDIT: Actually, since they are a Canadian company they are exempt [0] from regulation FD. Interesting!
[0] - https://www.sec.gov/Archives/edgar/data/1594805/000119312515...
Edit: Keep the downvotes up, but having this site eat a full core is a bit ridiculous. Similar sites are much more performant.
see: https://www.sec.gov/News/PressRelease/Detail/PressRelease/13...
This Shopify data could definitely be used to gain an edge in trading their stock. You basically compute projected earnings based on the sales per-second rate reported on the site and compare against their earnings guidance from the previous quarter (or analyst predictions). If the projected earnings go below the projection, you sell, otherwise you buy.
I was just being ironic in my previous comment.
Shopify has raised (per Crunchbase) about $122M in funding.
At the current rate, they will see $374M in GMV on their best day of the year.
Shopify has between 1K and 5K employees (again Crunchbase). Let's make the most conservative analysis and assume 1K. If they are paid $20 per hour (low estimate I think), that is $41M in employment costs per year. With taxes, office rent, healthcare, etc, lets just lowball again and call it $50M/yr for all the people costs. Again I think this is a huge underestimate if the crunchbase number is accurate.
Lets assume no marketing, hosting or other costs of any kind.
The internet claims 100k stores use shopify. Lets assume they all pay for the standard tier plan, and pay month to month. That is $79 * 100k = 7.9M per month in revenue. Again, huge over estimate, since I would guess 95% of the customers use the cheapest tier, and the largest companies most likely negotiate better than advertised fees.
Finally lets assume their BEST day is only about twice as good as their average day. This is probably overestimating their revenue by about 10x, at least.
That would mean they are bringing in well under $47.4M in gross revenue, on over $50M in fixed costs.
So in other words, even if black friday were half the days in the year, they still would lose substantial money. This is after 12 years of business.
It's unlikely they will ever turn a profit. If they were going to experience some kind of exponential growth to defeat this analysis, 12 years of the fastest growth in the internet have already gone by, so it seems unlikely going forward.
https://investors.shopify.com/events/Events-Presentations/de...
https://www.google.com/finance?q=NYSE%3ASHOP&fstype=ii&ei=IE...
Revenue growth with corresponding increases in costs and expenses. NOT getting closer to profitability, in fact operating losses are increasing in proportion to revenue (almost a linear relationship in every quarter and year in the reports).
Again, this is a failing business. 12 years in and no profit, profit not within reach, costs growing in lockstep with revenues.
EDIT:
So I was curious how they had such high revenues when clearly subscription fees can't account for it. Found this in the financial statement:
"We principally generate merchant solutions revenues from payment processing fees from Shopify Payments. Shopify Payments is a fully integrated payment processing service that allows our merchants to accept and process payment cards online and offline. As a result of the launch of Shopify Payments in August 2013, we have seen significant growth in the revenues generated from our merchant solutions. In addition to payment processing fees from Shopify Payments, we also generate merchant solutions revenue from transaction fees, Shopify Shipping, Shopify Capital, referral fees from partners, and sales of point-of-sale ("POS") hardware. Our merchant solutions revenues are directionally correlated with the level of GMV that our merchants process through our platform. Merchant solutions revenues increased from $34.5 million in the six months ended June 30, 2015 , to $77.0 million in the six months ended June 30, 2016 , representing an increase of 123.4%"
So they are counting CC processing fees towards revenues. I suspect that CC payment processing fees shopify pays are approximately equal to what they are charging, so this is just a revenue game where they charge 3% to customers, pay almost 3% to the CC companies, and book revenue that can never be profitable.
EDIT2: So found the cashflow in the statement. They charged $76M for these fees, and paid out $56M. Not bad actually! However, that $20M in net is still much lower than the costs to generate the business, $56M just in marketing.
You don't understand the meaning of the word revenue.
I know that revenue is often quoted as some kind of measure of the success of a business, when in reality it's extremely easy to run up revenues if you are running at a loss. In the most trivial case, you can pay $1.10 for $1 bills, for example.
Ok, so shopify isn't doing that, but it's hardly different, just a more complex situation. They pay $50 for advertising to get $75 in revenue, which they immediately pay $55 for. That's $105 paid out to buy $75 in revenue.
It would certainly be cheaper to just pay $1.10 for each $1 in revenue. I'm sure the folks at shopify don't think of it this way, and I'm sure they genuinely believe that they will someday change the economics of this and become profitable. However, the balance sheet doesn't support that belief, for me at least, and it sure looks like every customer they maintain leads to more money they are losing.
Perhaps they can become profitable with enough economies of scale. Again, I would question how much larger they would have to get to hit the inflection point, which they haven't done, at least in the financials reported, so far losses are scaling up linearly with revenues (which is to say operating margins are a steady negative % against increasing revenues).
Since they have been around for a long time (12 years) and those same 12 years have seen an absolutely huge increase in ecommerce, it seems like they have failed to hit the required scale despite the most favorable conditions you might hope for. That doesn't make me very optimistic.
> That doesn't make me very optimistic.
I would say that the market is "on your side" at least for now, as people on here have been starting to compare them to Amazon which is, in terms of market cap, 100x higher valued than Shopify and really not a fair comparison. However, let's not forget that the reason Shopify is a 3.5bil company (and not worth say "only" 500mil) is because they have eyeballs on them right now, and quite a few at that. The market isn't sure how they plan to use those eyeballs, but there's enough visibility to give them a chance at being a strong market player in the future. Also yes, despite being publicly traded, most investors would consider them still to be startup based on where they are at with their business model.
In the case of processing fees, I'd expect those to be what makes up most of the 'Cost of Revenue' line on the statement. In a company selling physical goods, it would be called 'Cost of Good Sold'. Basically, the cost of the raw materials you had to acquire to build your products. Because of this, they tend to scale in proportion with revenue, and it looks like this is the case for Shopify. Their cost of revenue is a little under 50% of revenue, so I don't think it's fair to say their revenue can never be profitable.
In terms of profitability, their net loss isn't that big as a percentage of revenue. They could probably, if they wanted to, let revenue grow for a while without increasing staffing levels or advertising spend too much - it wouldn't take long for them to be profitable. But if you've got enough cash on hand to run a relatively small loss in order to continue growing, solidify your position in the market, and expand into new markets (like they've been doing recently with Shopify POS) it makes sense to do so. They have
Right now, they have $409.39 in cash and short term investments. That money isn't going to help you much just sitting in the bank, and using it to grow the company will probably result in a significantly higher ROI than other things they could invest the money in. The way it looks to me, they're not running a loss because they have to. It looks like they've made a conscious decision to do so, and it looks like that decision is a good one based on the company's financial position.