Shopify Creates Labels & SFN Is A Beta
Shopify released earnings a month ago.
A few quick notes:
I always love the earnings calls because you can hear from Tobi. Below are a few of my favorite bits.
"In the beginning, eCommerce was janky as hell." Meaning it was hard to understand where things were, particularly post-purchase with the combination of carrier, e-mail, and other things you needed to do to follow up and ensure you got your parcel.
One of the goals of Shop Pay is to ensure that no one has to enter an address with their thumbs.
Reminded everyone that the company "deleted" its plans at the beginning of COVID.
An analyst asked about supply chain execution in Q4 and how Shopify merchants are prepared. Harley gave a slightly misleading answer in my opinion which focused on "51% of Shopify Merchants use Shopify Shipping" which is just label creation. Shopify Fulfillment Network was discussed, but by conflating the two he hand-waved the benefits of Shopify's current supply chain penetration - which is essentially nil in the grand scheme of things. #shipageddonisreal
Ricardo Belmar picked up on something from the press release: “Shop Pay Installments. Selective roll out of a buy now pay later option to merchants. Given the rise of the 3rd party payment solutions out there (and PayPal just introduced their version)” - he asked for my take. I am a huge fan of installments and so it's not surprising to see Shopify move there. They announced earlier this year. I imagine all the installment providers are not thrilled, but Shopify tends to put these things out to a "single-winner" RFP for the default Shopify version (e.g. taxes) but you aren't forced to use them.
Andrew Chapello asked “Any thoughts on Shopify potentially acquiring a shipping firm? They seem to anecdotally talk a lot about vertical integration of the entire supply chain. Secondarily: would that pass muster with the "new" antitrust state of play?” I’m not seeing it. I wouldn't worry about antitrust - Shopify is still small potatoes.
Ethan Logan noted that he “was always surprised Amazon pay didn’t catch on more since it solved this same issue to an extent.” I am not surprised. Fox, meet henhouse!
If USPS, FedEx, or UPS have a major issue in Q4, Shopify merchants are not better prepared this year than last year. Full stop. Shopify Fulfillment Network is still essentially a beta.
