Shopify, Volusion, and BigCommerce Go Up Against Amazon

Jonathan Foltz      Thursday, November 2, 2017

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We are currently living in some incredible times. Things around us are changing shape and form as it would seem almost daily. This is only going to speed up in today’s ultra connected era.

One of these shifts is the way that we shop, which has fully ramped up to go online, in ways we have never seen before.

From the ancient fairgrounds of trading silk for goat milk to today’s fast commerce with Amazon’s 1 click buy. Amazon shipping directly to your door, sometimes within an hour (Amazon Prime Now). Commerce has not only changed, but it has changed in a fundamental manner where it will even be hard to look back at what was. This will continue on, at even greater speeds since technology moves exponentially and not in a linear fashion.

 

Not only is Amazon paving the way for modern commerce through its convenience of accessibility, wide range of products, competitive pricing, speedy checkout and delivery, but it is annihilating the competition and leaving brick and mortar stores to rumble in its wake. Not too long ago Buffet ended up selling the majority of his shares of Walmart citing that they were too late to the Ecommerce game and Amazon had already taken a major lead.

 

Does this spell inevitable doom for other behemoth companies that have also been slow to join the online sales avenue?

 

There does seem to be a trend here though:


Toys “R” Us:
Filed for Bankruptcy


American Apparel:
Filed
with bankruptcy and was then acquired by a Canadian based company to grab hold of its intellectual property.

 

Bebe:
Closed all of its physical stores in May of 2017 in search of alternatives. Possibly directly online? Or is it too late for this old trendy brand?

 

HHGregg:

Went bankrupt and shut down all of its 200+ stores.

 

Sports Authority:

Closed all its doors after they could not shift fast enough in the new competitive retail AND online space.


ALL THESE GIANTS BELOW closed many of their stores doors to ensure survival:

Sears
Kmart
Macys

Radioshack
CVS

Michael Kors

 

 

It may not have been directly correlated to Amazon but I believe we can all say that eCommerce may have had a major impact on this domino effect, with Amazon leading the way. A lot of these front line leaders have secret weapons to keep it this way though. Proprietary technologies to leave everyone else in the dust or to make a heap load of cash through licensing and other monetization strategies.

 

Proprietary technology can create monopolies and a major advantage over competitive market places. So much so that “DigiDay” cited that the 1-Click patent implemented by Amazon increased their sales by 5%, valuing the technology at $2.4 billion dollars annually.

 

In September 2017 however, Amazon’s monopoly on the 1-Click technology patent expired, freeing up a new rapid purchasing strategy for an entire industry of eCommerce businesses which prides itself on ease of access, frictionless shopping, and speed.

 

Although Amazon remains at the forefront of online business and continues to set the bar ever higher, nipping at its heels in terms of growth, are three major competitors looking to get a piece of the $2 trillion eCom worldwide sales pie, and the $128 billion Amazon racked in back in 2016.

 

Say hello to the big three: Shopify, Volusion, and BigCommerce.

 

These companies are small in comparison, but have a powerful advantage over Amazon - a backing of hungry online entrepreneurs fueling an eCommerce revolution. Entrepreneurs with much more power than the powerless Amazon sellers that don’t even own their email lists. Some even say they work for Amazon… (sorry Amazon sellers, but you may want to smell the coffee!)

 

As technology is advancing at incredible speeds through collaboration, open source platforms, plug-and-play business models, and through Moore’s Law, we have a surge of new entrepreneurs entering a space of infinite possibility that was not fathomable ten years ago, or even possible in the past five.

Let me put it into perspective.

 

An ecommerce operation, just 5-7 years ago, that would have cost an owner $50,000 to $100,000 to setup and maintain, can now be built for a fraction of that or even less than a couple hundred dollars.

From products that would need to be in inventory, programmers and designers on staff, an office or facility location, equipment, accountants, and so much more… This would cost a single starting entrepreneur far more than they can afford.

 

 

Fast forward to today and even 15 year-olds are running successful Ecommerce stores!

Here is a picture of one of my students,
18 year old
Vincent Wang, who made $330,998 in a single month and even bought himself a Supercar, an Audi R8!
 

vinces r8.jpg

 

When was this even possible before?  


Welcome to the Digital Revolution where the bounds between fantasy and reality are slowly merging together as technology accelerates forward at alarming speeds.

 

When you used to think eCommerce five years ago, the first thought that came to mind for most developers and businesses was "Wordpress". Not only did you think of wordpress, but you might have also thought about either hiring programmers or even an agency to make sure it all works right. There was no way that a novice or rookie was going to be able to build an entire functioning Ecommerce website from scratch. You needed to have extensive knowledge on how it worked to have at least a half-decent commerce site up and running.

 

You certainly had other options though, like actually coding in HTML for the hard core programmers, Joomla, Magento, and ASP.NET for the security fanatics.

 

But there was still no easy way to enter the online business world without exhausting several pretty pennies.

 

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Today, there are also some free/cheap platforms that help you build websites like WIX, Weebly, Sitey, WebsiteBuilder, Site123, and many others are helping the average Joe build sites with decent aesthetics and functionality. With limitations of course.


And then we have the paid power players, like Shopify, Bigcommerce, and Volusion that are helping entrepreneurs move to the next level like never before.

Let’s check out some stats and cold hard data.

 

SHOPIFY:

This platform grew by 90% in total revenue to $389.3 million in 2016. Again, almost doubling from 2015 with $205.2 million in revenue.

Shopify also processed $15.4 billion, also known as Gross Merchandise Volume (GMV) through their sites in 2016.

 

Shopify allows you to market and share your products easily on many of the most popular websites and social media platforms out there, including Facebook, Instagram, Amazon, Ebay, Pinterest, Wish, and more. With over 500,000 merchants and one million active users, you are bound to have found yourself shopping on a Shopify powered site at some point! They offer 70 payment gateways. The company provides 100+ trendy themes which you can apply to your store in a pinch (many are even free!). Joining is easy and includes a free domain name as well.

 

VOLUSION:

Volusion has processed over 21 Billion dollars in sales showing the confidence in the marketplace. Volusion has about 40,000 merchants on its side, paling in comparison to Shopify, but still receives over 185 million orders and has earned a pretty hefty earning power of $21+ billion in sales for its merchants. The company is operated by 250 employees. You must provide them with your own domain name within 30 days to get your store going, and have a bandwidth allotment - which is a bad thing when you're aiming for high volumes of customers (and aren’t we all?). They offer 30 payment gateways (only 8 in Europe) and have about 100 apps ready for install to get you running optimally.

 

BIGCOMMERCE:

BigCommerce has processed over 9 Billion dollars in sales showing the confidence in the marketplace. (Source: http://bit.ly/2gLCndH )

BigCommerce also has the highest credit card rates of the following three platforms (boo!) and also puts sales limits on your store depending on the plan you choose when signing up with them.

They do offer 7 free website templates, 40 payment gateways, and 450 different apps to increase your store sales and revenue.

 

 

 

Unfortunately you will have to pay a fee to pull analytics reports and they have no mobile app available to users, so keep your laptop handy!

BigCommerce brags of their new system “BigCommerce Next (BCN)”: An upgrade to the original shopping functionality. Which allows for integration with Google Trusted Stores, blogging framework, themes that are ultra responsive for all mobile devices, and a Traffic Engine feature that helps the completion of various marketing tasks.

 

 

They have also set up BigCommerce University (BCU) - Giving a good platform for entrepreneurs and companies to be able to take their eCommerce stores to the next level.


 

Now, let’s take a step back for a second.

After analyzing these competitors we have come to find something quite interesting that is fueling the incredible growth of one of these companies in particular: Shopify.

 

And it is called… COMMUNITY.

Shopify has a culture and community like no other. Just on Facebook alone, they have over 150 community groups where experts in the Ecommerce, Facebook ads, and internet marketing world are teaching 100’s of thousands of students how to make money online. And which platform are they rallying after before all others? You guessed it.. SHOPIFY.

So why are so many people such die-hard advocates of Shopify?

I’m glad you asked:

 

-  Shopify is by far the most simple to set up (even a 12 year old can do it and make money!)

 

- The easy to use apps and plug-and-play nature of Shopify is astounding and growing daily. There are currently over 2000 apps available (and counting!) to help you optimize your store.

 

- Their customer service is nothing short of amazing. They have Shopify experts available 24/7 to answer your questions and they really know what they’re talking about.

 

- Shopify was created with the entrepreneur in mind and they want you to succeed! This helpful attitude has gone far in increasing their popularity amongst new online business owners.

 

- Shopify is being used by affiliate marketers from around the world because of its good-to-great affiliate commission program. And let’s not forget that affiliate marketers like to push products they can trust... at least we would hope that most of them do!

 

- The community that is being built around Shopify dwarfs both Volusion and BigCommerce. Its popularity is slowly catching up to that of Amazon. It may seem like there is a far stretch between them but do not underestimate hungry entrepreneurs that now have more power than ever through these 3 platforms.
We are seeing course after course being launched by a range of people from all walks of life, from online teenage prodigies, to globetrotting nomads, to good ol’ home based couples and families.

 

So what is another fundamental gauge of what is to come?

 

Agile tech startups, Asian startups, and the new fast moving fish are ready to swim circles around the giants.

But how might you ask?

 

It is not only the agility of these smaller companies to move as they please but it is the implementation time that has substantially decreased. This makes it so that these companies are extremely quick to the punch when new technologies and loopholes emerge into the marketplace...

 

What makes the smaller companies so dangerous is that they really can adhere to the MVP (Minimum Viable Product) model. Another reason why Growth Hackers are really coming into the scene at a faster pace than ever. These big companies are now looking at the Lean Startup methodology to be implemented in small droves in order to keep with the startup world who are getting the upper hand with growth. (Check out “The Lean Startup” by Eric Reis)

 

Bigger companies ranging from the larger start-ups to corporate America have crippling guidelines, and upper management barriers that are making it harder and harder for newly discovered loopholes, and new technologies to be implemented at a decent rate. Turning these companies into the BIG, but yet very slow, fish in the pond.

 

Companies and startups like Shopify, Volusion, and BigCommerce are also allowing users to generate content and become feedback machines. There are apps coming in to grow the entrepreneur's journey on a daily basis, like within the Shopify platform, that allow third party

 

 

applications to plug and play.

 

I mean, what better way to grow a community exponentially than allowing the users to use the "Invisible Hand" of capitalism to guide supply and demand, as Adam Smith would explain. (In his book “Wealth of the Nations”)

 

As technology takes on new momentum in this digital age, look for the paradigm shifts and loopholes that will take you from being just a little fish, to the fast fish within the pond.

 

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