Shopify Marketplace launch: Q&A with CEO Scott Lake

August 13, 2007

Digital Marketing ChannelAdvisor By ChannelAdvisor

I’ve long admired Shopify’s design-centric approach to e-commerce and recently discovered that Shopify now has a marketplace on deck to launch — essentially a federated version of all stores on the Shopify platform.

The company launched in May 2006 and provides design-ready stores with integrated payments.  Shopify offers a three-pronged value proposition: simple, well-designed shops and setup; scalable server farms; flexible volume pricing and freakish (the good kind of freakish) control over external look & feel.

 

Shopify currently hosts 20,000 stores.

Luckily, I caught up with CEO Scott Lake to learn more about Marketplace and get a preview of what’s in store for this week’s relaunch of shopify.com. (Note that the Shopify platform site is now at shopify.info).

Here’s a five-second summary:

  • Marketplace fuses the concept of an e-commerce platform with that of an online shopping community
  • The Marketplace has always been in the works and is the next natural step after building the platform tools; it’s both a broadcast medium for the Shopify community’s products, as well as a distinguishing feature of the Shopify service vs. other e-commerce platforms
  • Shopify will soon release an API for their platform, which can also plug into Marketplace
  • Primary competition is Yahoo Stores, Pro Stores on the e-commerce side, as well as “a handful of other applications from the last decade;” vs. Marketplace is Etsy and Big Cartel

Why shift to the Shopify
marketplace?

Shopify hasn’t really shifted to a marketplace, as the marketplace component was
always in the plan for Shopify.    From the beginning we had wanted to provide a
place where people could access a federated search of all Shopify stores and
products.  Our initial goal when creating Shopify was to create the smartest and
most easy to use e-commerce application for selling online and our second goal
was to create the Shopify Marketplace.  We feel that Shopify e-commerce platform
along with the marketplace really rounds out our product offering.

In
addition there are a couple of other things that the Marketplace does for us.
First, it further distinguishes us from other hosted e-commerce applications as
not many of them are offering a fully unified marketplace the way that we do.
Second, it allows us to take advantage of the traffic that Shopify.com generates.
This URL is a valuable piece of real-estate which we wanted to leverage for the
promotion of our own stores and products.

How do you see yourself positioned relative to the big
CSEs?  What’s the advantage you have over them?

The Shopify
Marketplace is first and foremost an outlet or broadcast medium for the Shopify
community to promote their products.  We really don’t see ourselves a
traditional comparisson shopping engine.  Since Shopify’s launch, we have become
known for having the best designed stores with many of the most interesting
products.  Instead of drowning our visitors with tons of exactly the same
products, Shopify’s Marketplace will be a place to find an eclectic mix of very
high quality products.

Who do you see as
your main competition?

Our main competition on the hosted
e-commerce side of things are Yahoo Stores and Pro-Stores and a handful of other
applications from the last decade. On the Marketplace side, I would consider
Etsy and Big Cartel as competitors, we really love what they have done with
their systems. Shopify’s unique capability is that it fuses both concepts, you
essentially get the best of both worlds: A beautiful, dedicated shop at your own URL, as well as a marketplace with its own community and all the traffic which comes from
that.

What kind of power do you wield
with inventory housed in your merchant’s stores?  How easy is it for them to
shunt products to the marketplace?

Since launching Shopify we’ve
been overwhelmed by the high quality of the stores and products that are being
sold each day on our software.  The power we wield through the inventory of our
clients products is more related to the cumulative power that is being
established when we bring access to all those stores under one roof. We wanted
to make pushing products to the Marketplace as easy as confirming a dialog in
their admin system. (By the way, the marketplace itself uses Shopify’s soon to be released
API, which is operating under the hood.) Other then promoting the idea of sharing your
products in the marketplace we didn’t change the Shopify software at all. Third parties will be able to write their own marketplaces against Shopify if they so
choose.

What kinds of creative
things are you going to do to promote your merchant’s stores on the
site?

One of the purposes of building the Marketplace was to gives
stores a way that they could use it to promote themselves. The first step that
we have taken in this direction is to allow Shopify store owners to very
inexpensively pay to have their stores and products showcased on the front page.
Each day a new shop will be featured and its products will be highlighted in the
search for the following month.  Our goal is to continually expand on the ways
that our users can use Shopify Marketplace to promote their stores and products.

How will you drive traffic to
marketplace?  PPC? SEO? marketing deals?

Initially, we will
promote the Marketplace through blogs, word of mouth and virally. Added to this
is always an SEO and PPC component. Since we are launching the Marketplace today
it is still a bit early for marketing deals but we will also be pursuing those.

Do you think your merchants have unique
products / are price competitive?

As I mentioned above, I think
our merchants have a some of the most interesting and unique products available
online. Everyday we are discovering amazing shops that people have created using
our software. Our goal with the Marketplace is to finally give people a way to
access all our amazing shops and products in one place. Shopify’s current
catalogueueue includes everything from cookies and pasties to soap in the form of
human hands to the latest Lexus models.

What are some of the coolest stores?
There are seven stores that I like: