Due to Zero-Sum Thinking, Shopify Has Its Amazon Strategy Backwards
Due to Zero-Sum Thinking, Shopify Has Its Amazon Strategy Backwards
Let's look at 2021 statistics to prove a point. Worldwide Shopify 2021 GMV: likely $180B (not yet released) Number of Shopify Websites: 3.76 million (Backlinko)
Worldwide #Amazon 2021 #Marketplace GMV: $390B Number of Amazon Sellers 9.7 million (MarketplacePulse)
Who needs who here? And where is the big opportunity for Shopify to grow?
Shopify has always tried to create this big narrative against Amazon, painting them as the evil empire. Last year, Shopify even ended its native Amazon connectivity, which, like any tax, discourages sellers from going to Amazon [even though you can use third-party tools, it creates friction].
Ultimately, if brand-building and DTC are the way forward, and DTC revenue has higher margins than Marketplace revenue, Shopify should be taking the opposite approach.
Shopify should be doing this instead:
1 - Throwing a life raft to Amazon sellers. Making it easy to import your Amazon store into Shopify to diversify. If the above narrative is true (hint: it generally is) then doesn't Shopify have a great value prop for these sellers?
and. and. and.
2 - Allowing Shopify sellers to diversify their exposure to Amazon. Many brands on marketplaces know, a big reason they are there is to introduce your brand to customers who don't already know you. This increased awareness is to a consumer that you want to convert to being YOUR owned customer long-term.
i.e. helping them know who you are, so that next time they buy, they might go to your website directly instead.
Which means, if Shopify merchants have this strategy, then why would #Shopify itself discourage this strategy?
Amazon then becomes a growth engine for Shopify long-term.
What is holding Shopify back? In my opinion it's "zero-sum" thinking. There is big enough pie for everyone, and brands want to be multiple places. Instead of saying "it's Shopify or Amazon", by embracing Amazon, they create a bigger long-term pie for Shopify.
If by reducing friction, brands don't try to take more business from Amazon to Shopify, then doesn't mean that it is something else Shopify needs to fix?
