What existing businesses really need to know about Shopify
By DEREK NEUTS, MS
One of the most frustrating issues I’ve had to contend with as an agency owner and consultant has been realigning clients’ expectations against Shopify’s pop culture mythology. While my agency handles development for Shopify in-house, it’s a platform that I’ve considered dropping support for in 2021. Its reputation as a “burner platform,” widespread misuse of the framework, misrepresentations of the framework’s capabilities by “Shopify Experts,” along with a negative impact on strategic infrastructure investment, leaves little to be desired as a sound choice for any mature client. Those who believe the hype surrounding “quick, cheap, and easy” will be regretful if they migrate from an existing platform only to be locked into a proprietary system. Additionally, businesses that have yet to establish a competitive web presence will need to carefully manage sales processes, user experiences, and growth with boundaries on the platform.
In this article, I will speak candidly about the dangers of choosing Shopify as an e-commerce platform without evidence-based justifications in place. While initially intended for startup companies, Shopify is now marketing itself to mature companies as a viable option, disregarding long-term infrastructure consequences. Companies that have invested in proven platforms and technology are ready to give up these assets for a leased platform with numerous critical restrictions. Businesses are giving up their control over bandwidth, first-party data, custom user experiences, and programmed features that allow their brand to stand apart from the competition due to fear-based management decisions. While there is a right time and place for using such a platform, I’m speaking out against the arbitrary use of Shopify as a knee-jerk reaction to adverse marketplace conditions.
Shopify isn't a website. Stop treating it as one.
The largest misconception is that Shopify is a website and that any web development agency can handle maintenance and updates quickly, cheaply, and easily. Those expectations are pop-culture fallacies that need to be addressed. Shopify is a proprietary e-commerce platform written in Ruby on Rails, making all projects a web-based e-commerce application. Further, this means that Shopify jobs are software tasks that must be programmed and handled properly using a software design pattern. Care must be taken to store the code for the site or custom plugin in a code repository for proper version control. In short, this is not a simple website update, and many things can go wrong. Shopify sites typically start at $15k on average for basic custom work and can exponentially increase easily into the tens of thousands of dollars.
If you’ve ever had any experience using mail list managers such as MailChimp and Constant Contact, you’ll know how cumbersome those platforms can be. You could create a custom email template with the graphics and features you want, but it may not appear the same across various email clients (e.g., Outlook, Apple Mail, etc). These same rules of engagement apply to Shopify, as developers must code Ruby within the guidelines provided. Since the client doesn’t own the platform (they are essentially leasing space), there are no guarantees of success with any custom design or feature requests. Work can be “custom” to the extent that it’s just generic enough to be compatible with the Shopify infrastructure. When you don’t control the server and can’t have full access to the platform, you won’t be able to have a truly customized experience.
Scalability and freedom for Shopify, but not for you.
Clients will never own their store on Shopify, nor will they own or be able to collect custom consumer data. Servers are also shared resources, and those stores that are successful enough to gain the most sales will have the most bandwidth by design, as revenue for each sale is split between Shopify and the merchant. Base fees for Shopify will increase as your needs grow, and most plugins charge for base traffic covering entrepreneurial level businesses only. Larger companies with real traffic will be paying hundreds of dollars each month for a single subscription in many cases. Between plugin subscription costs, base fees, and transaction fees, some larger merchants are well into several thousand dollars each month in expenses. These expenses don’t include the costs of professional developers who know and understand Ruby on Rails (add another $4k – $10k per feature) and how e-commerce user flows should be handled. Shopify is designed to maximize its own revenue stream from your customers while making you feel good about it. I have to give them credit, they know how to market. Businesses need to factor in these additional costs while providing at least 30 hours minimum each month at $150/hr. for any legitimate development firm to take you on as a client to ensure that your site is properly maintained.
It's easy to fall for the sales pitch.
Since creating a Shopify Partner profile, my agency has been inundated with numerous emails, blog links, and tidbits on how to expand that relationship with Shopify to get more customers signed up for the service. This also includes being listed as a “Shopify Expert” on their website. No thanks, I’m good. This is about referrals, payouts, and multilevel marketing approaches to convince consumers and business owners (big and small) that Shopify is the “right” platform for them and will solve all their worries. Shopify is merely a referral revenue stream for many agencies claiming to be “Shopify Experts” when a conflict of interest is abhorrently clear. Refer someone to the platform and they sign up? Get a bonus. Convince them to use your Shopify app? Get a payout. Bring them over by yourself or a partner, and get them to use your app? Win big. Wash, rinse, and repeat for every client you come into contact with, and you have yourself a business model as a “Shopify Expert.” Those who are plugin developers and faux e-commerce consultants have a bigger cash cow opportunity than they did with selling all new WordPress websites as “custom,” charging for coded work and then leaving the client with Divi, Beaver Builder, or something much worse. How are they going to know, right? The underlying motivation with this dark part of the industry has everything to do with the most profit with the least amount of effort, quite literally.
What it looks like when businesses don't listen.
Companies who already have a web presence and own their e-commerce system (e.g., Magento CE, WooCommerce, PrestaShop, and similar) should not be switching to Shopify. Switching over in this instance isn’t a “burner phone” situation where you can walk away when you’re done. It’s an abandonment of investments made in a technology stack, codebase, infrastructure, hosting, and related costs where no one can dictate what can or cannot be done to your website. Once you give up that independence and switch to Shopify, there’s no easy way of coming back to what you once had, and then you’ll be reminded of the limitations you set for yourself on a daily basis because the grass appeared greener on the other side of the fence.
You won’t be able to collect targeted raw first-party consumer data or analytics that only benefit you and your ad campaigns, as SEO is not the same for Shopify, and it’s not your platform. The flexibility to develop features as needed for your own brand will be limited to the capabilities of the platform, closely mirroring existing plugins that are priced based on consumer engagement levels. Optimizations for the “website” can’t be refined as done previously, nor is it an easy process to modify existing Shopify themes, greatly restricting clients through development costs for custom software. This creates bad experiences for both businesses and agencies looking to serve them when a potential client thinks that all of this can be done quick and on the cheap.
Clients will then find themselves “locked” into the Shopify platform with increasing base fees, plugin subscriptions, and transaction fees. Development opportunities will be limited to basic standard practices only with some design and branding changes based on platform limitations. Customers will be frustrated, too, as all experiences are very similar across all merchants. Don’t expect the same level of detailed analytics and insights into consumer behavior you used to collect using your own virtual private server. In the end, the brand may be saving money in the short-term, but consumers are having just another homogenized online shopping experience that may or may not be able to speak on behalf of the company’s marketing message.
Many agencies are getting frustrated with Shopify.
Our own agency needs to be more clear on our stance with Shopify, when it should be used, who should be using it, how it should be developed, and set realistic expectations for clients. Part of me wants to help small to medium-sized businesses with their e-commerce and revenue problems. Still, at the same time, I don’t want to subvert my own profession, its values, and core beliefs to feed into the ever-growing delusion that Shopify is a great e-commerce platform for everyone, because it’s not. I’ve spoken to both big-box development peers and Ruby developers, and everyone agrees that Shopify is a difficult platform to manage and develop for, and it has seriously downplayed the importance of professionalism in the industry by opening the floodgates to a number of predatory, cheap, and unqualified charlatans to market their services as actual expertise. The same thing has happened in the WordPress realm, and we’ve even seen Squarespace and Wix “experts” advertising services. This is an unregulated industry, anyone can hang a shingle. But this behavior hurts real agencies, big and small.
Development firms with both in-house and qualified offshore teams charge nominal rates for top-quality work that gets undercut daily. We’re all watching the race to the bottom based on nothing more than marketing hyperbole driven by customers who were promised fast, cheap, and easy by a proprietary platform. Frustrations continue to rise as agencies like mine refuse to perform shoddy work and wish to stick to standards that are data-driven and produce results that are needed by clients passionate about what they do. A lot of our work comes from fixing issues created with buggy website builds and rescuing businesses, but it’s tiring to do so. When it comes to selling online, that type of reckless site construction is dangerous. E-commerce is a behaviorally-based art and science, but somewhere along the way, marketing messages only convey the art and that everyone can be an e-commerce legend if they drink the Shopify elixir and abandon Magento, BigCommerce, WooCommerce, and others. Nothing is further from the truth or more conceptually destructive. Maintaining a good reputation in this industry is about finding the right platform for both short and long-term client needs while maintaining a holistic alignment with sales and ops goals. E-commerce platform decisions should never be fear-based by managers or executives. If this is a persistent pattern within any company to make decisions that don’t serve shareholders or customers, then it’s nothing more than a toxic culture where no amount of consulting or development can ever help.
COVID-19 has made online brand representation a key to success, not optional.
Who should use Shopify? We feel that the platform’s original spirit and intent was to help small businesses get off the ground, so those without a web presence, especially startups with goods to sell, should use a platform such as this if they wish to stay manageable and agile in their operations approach. Costs can be reduced this way, and the business can be scaled out, building those Shopify costs into consideration as part of online operating expenses and cost of goods sold. Our agency doesn’t have a problem with this approach, as it makes logical sense and we fully support that.
Who shouldn’t use Shopify? Companies with a pre-existing technology stack (such as any PHP flavor) should not make the switch, as they’re complicating their infrastructure, increasing their costs, and abandoning their own IT investments. While many such situations are on a case-by-case basis for analysis, taking such drastic measures to “save money” is forcing them to do just the opposite by moving from open-source technology stacks to a proprietary, subscription-based, and fee-structured platform. Later down the road, when the costs become high, and more flexibility or freedom is needed, management will blame someone for making the change, and then the plans start all over again to migrate back to what was enjoyed beforehand. Only this time, IT infrastructures won’t simply be there, and re-creating that environment you once had won’t be easy. It’ll cost just as much to migrate to an old platform as it did to create it initially, if not more.
Many businesses are losing revenue right now, but it has nothing to do with the platform since losses can be tied directly to the overall brand strategy, engagement, and oftentimes marketing and managerial inexperience in these matters, and unfortunately not all of them can be reasoned with. There’s no magic bullet to this problem, but COVID-19 has driven the demand for e-commerce to exponential levels causing a void of “e-commerce experts” and “e-commerce developers” to be filled out of thin air. This pandemic has also shown the public which companies embrace change and which do not, as there are a staggering number of companies that are still struggling. Unfortunately for those who are in trouble, the “experts” have one job to perform: convince desperate or worried businesses to make the wrong decisions to benefit their business model at all costs. More specifically, your costs to them. We never recommend jumping into an e-commerce platform decision, but instead, we’d prefer to discuss things at length and ensure we’re all on the same page together with a solid plan that makes sense to all. For now, we’ll be focusing on technology stacks and infrastructures that keep clients free and unencumbered from restrictions, allowing them to properly build their brand at the demand of their customer base.