Shopify had 8,300 employees in 2023, compared to 11,600 employees in 2022 and 10,000 in 2021.
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Shopify Business Model
Shopify is an e-commerce platform that enabled over 2 million merchants in 2021 to commercialize their products. While Shopify works with a subscription-based business model, it makes most of its money via merchant services, which are additional services provided to merchants. The company generated over $5.6 billion in revenue, of which $1.5 billion (almost 27% of total revenue) was from subscriptions and $4.1 billion (more than 73% of total revenue) from merchant solutions. Shopify Cost Structure
While Merchant services drive most of the revenue for Shopify, in reality, subscriptions have a much larger contribution margin. Indeed, in 2022, on $5.6 billion in revenue, merchants’ services generated $1.6 billion in gross profits. On $1.49 billion in revenues, subscriptions generated over a billion dollars in gross profits. In short, subscriptions have a low cost of revenue compared to merchant services. Thus subscriptions carry a gross profit margin of over 77%, vs. a gross margin of almost 39% for merchant services.
Shopify Profitability
Shopify was not profitable in 2022, generating over $3.4 billion in net losses. Shopify’s profitability deteriorated in 2022. Indeed, in 2021, driven by the massive wave of e-commerce throughout the COVID-19 pandemic; Shopify had turned to profitability in 2021, generating over $2.9 billion in net income, while it became unprofitable again in 2022.
Shopify Revenue
Shopify generated $5.6 billion in revenue compared to over $4.6 billion in revenue in 2021.
Shopify Merchants
Shopify Competitors
In just fifteen short years, Shopify has grown from humble beginnings to become one of the fastest-growing eCommerce platforms online. The Shopify eCommerce solution is perhaps best suited to users who desire an easy, flexible and affordable starter solution for their online store. The provider now has upwards of 820,000 stores accounting for 20% of the total market share. However, the continued success of any company in the dynamic digital market is never guaranteed.
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