Shopify: That Is The Company Your Small Business Needs


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Pizzas in the post: Shopify challenges Amazon for slice of Lockdown trade

2 days ago – Pizza Pilgrims pivoted online almost overnight via Shopify, the Canadian e-commerce platform that sells the digital kit that companies need to …

Shopify’s Blurred Lines Are Hard to Hate

Exiting the pandemic, Shopify is a Canadian darling U.S. investors can no longer afford to ignore

At the start of this year, Canadian-based cloud commerce platform Shopify Inc. may have been the biggest company investors outside of technology had never heard of. Now, the pandemic-induced e-commerce craze is catapulting the company into a position too relevant to ignore.

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8 replies

  1. Shopify has made it relatively simple for nascent businesses to come online quickly, but it is also growing the ability for its more sophisticated customers to fully customize all pages of a more substantial online store. While many small businesses have likely turned to Shopify amid the pandemic, a continued recessionary environment may intensify the trend toward e-commerce sales as a way to save on shop rents. Shopify’s tools allow a business to grow at a much lower cost.

  2. How willing will the Federal Reserve be just to switch off all the stimulus it rolled out to safeguard markets from the coronavirus? The most plausible answer is “not very,” logic that forms the most aggressive bull case on equities.

    As anyone who has watched the rocky path to reopening cities and states, it’s hard to know when to sound the all clear in waters as uncharted as they are now. Uncertainty dictates prudence. That’s the case in deciding when to allow people back to work, and will logically guide policy makers, too, when it comes to their measures that have kept markets in working order.

    With the S&P 500 already two-thirds of the way back from its bottom, that prospect — that virus-fighting stimulus could linger for months or years after the worst of the pandemic has passed — explains the uncanny confidence of stock bulls in the face of the worst economy since the Depression. As they see it, if even a modicum of economic order is restored and stimulus sticks, it’s a recipe for a melt-up.

    “The markets have become addicted to stimulus. That is the key factor that is going to continue to drive risk appetite, just like it did in the last cycle,” said David Spika, president of GuideStone Capital Management, which has about $12.5 billion in assets under management. “Going back to the last cycle, the Fed stayed involved for several years even though we returned to previous employment levels and we returned to previous earnings levels — and the Fed continued to buy bonds.”

  3. Shopify is experiencing a surge in sales and users during these unprecedented times. Last week, Shopify reported that its sales grew by 47% to $470 million in the first quarter and continued to accelerate in April, while new stores created on the platform grew 62% in a six-week period during the pandemic.

    “We are working as fast as we can to support our merchants by re-tooling our products to help them adapt to this new reality,” Shopify CEO Tobi Lutke said in a statement last week. “Our goal is that, because Shopify exists, more entrepreneurs and small businesses will get through this.”

    One of the appeals for using Shopify is that companies can sell products on their own website, instead of listing items on an Amazon-style marketplace. This month, Shopify also announced a partnership with Pinterest, which allows merchants to share their products to about 350 million users.

  4. Shopify’s subscription solutions revenue rose 34% year over year to reach $187.6 million last quarter, and its merchant solutions revenue climbed 57% year over year to reach $282.4 million. Overall revenue for the quarter came in 46.6% higher compared to the prior-year period. The company announced that new accounts created on its platform increased 62% between March 13, 2020, and April 24, 2020, compared to the prior six weeks, and investor enthusiasm for online retail amid growth trends accelerated by the novel coronavirus continued to benefit the stock last month.

    Shares also got a boost following new products announced at the company’s Shopify Reunite virtual event on May 20. The e-commerce services provider announced Shopify Balance (a suite of software products for merchants to monitor finances and orchestrate transactions, enable advantage of faster in-store spending, and take advantage of a new rewards program) and Shopify Installments — a new service allowing for installment payments on the platform. The company also announced updates for its Shopify Capital financing service and new gift card, tipping, and international sales features.

  5. Shopify integrates with each of the major payment processors, as well as the third-party shipping companies, helping merchants handle all aspects of the checkout and delivery procedure. The company also has monthly subscription plans to meet any budget, from small mom-and-pop shops all the way to formidable enterprise-level businesses. Merchants have access to email, digital advertising, point-of-sale hardware, and even working capital loans, nearly everything they might need to succeed.

    For the first quarter, Shopify’s revenue grew to $470 million, up 47% year over year, while subscription revenue grew 34% to $188 million. Monthly recurring revenue, which helps level out some of the peaks and valleys of its business, grew 25% and now accounts for about 12% of the company’s total revenue.

    Shopify now empowers more than one million merchants in 175 countries worldwide to manage their online sales platforms, and its platform is now available in 20 languages. The majority of its business, however, still comes from North America, giving the company a long runway for international expansion. The number of sellers on Shopify’s platform could double or even triple in the years to come.

    E-commerce adoption has accelerated as the result of the pandemic, and Shopify is perfectly positioned to help even more merchants make the move and become digital retailers.

  6. The ECB said it would buy up to €1.35 trillion of eurozone government and corporate debt through June 2021, expanding and extending an existing €750 billion bond-buying program. In an unexpected move, the ECB said it would roll over maturing bonds bought under its new bond-buying program, known as the Pandemic Emergency Purchase Program or PEPP, through the end of 2022. The bank left its key interest rate unchanged at minus 0.5%.

    The size and scope of the economic downturn sparked by the coronavirus pandemic have raised concerns that even stronger members such as Germany won’t be spared and pressure on weaker members such as Spain and Italy could be so great as to threaten the currency union itself. Squabbling among member states and tensions within the ECB meant the bloc was slow to react to an economic collapse that could be the worst since World War II.

    But recent decisions have been more encouraging.

    The European Union last week set out a $2 trillion coronavirus response plan that, if approved, would mark an unprecedented deepening of the bloc’s economic union. Meanwhile, Germany on Wednesday unveiled a rare €130 billion package of tax cuts and budgetary handouts, aiming to kick-start consumer and business spending in Europe’s largest economy.

    Still, analysts suggested even those forceful measures might not be enough given the depth of the downturn. The ECB will likely need to scale up its bond purchases by another €500 billion as soon as September if it is to continue buying eurozone debt at its current pace through the middle of next year, said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva.

    The borrowing costs of Italy and other Southern European countries have jumped in recent weeks as investors worried about the ability of highly indebted governments to handle the rising costs of the crisis. The ECB’s bond-buying helps keep a lid on those costs.

    Major central banks such as the Fed and the Bank of Japan have pledged to buy debt in almost unlimited quantities to support a new wave of government spending. Unlike those central banks, the ECB is legally prohibited from financing governments.

  7. Other E-commerce Stocks: Etsy Stock, Shopify Stock, Wayfair Stock
    Etsy stock, Shopify stock and Wayfair stock began consolidating in May, cooling off after a sprint higher that began in March. The relative strength lines of those e-commerce stocks have also slipped recently.

    Etsy’s Composite Rating stands at 87. But the EPS Rating for the platform, which allows people who make custom gifts of all kinds to sell them online, is a weak 13. Etsy stock fell 2% on Friday.

    Shopify, whose online tools help people manage their businesses, fell 1% on Friday. Shopify stock has a 98 Composite Rating.

    Wayfair, the online home furnishings retailer, fell 3.8%. Wayfair stock has an 80 Composite Rating and a 6 EPS Rating.

  8. The European Central Bank reached another trillion-euro milestone in its fight to bolster economies that are seeing years of growth wiped out in months by the coronavirus pandemic.

    An offer for its ultra-cheap, three-year loans was taken up by 742 banks for a total of 1.31 trillion euros ($1.5 trillion) on Thursday. That’s in line with predictions of 1.2 trillion to 1.5 trillion euros.

    The loans are intended to ensure banks keep providing credit to companies and households to bolster the economic recovery from the pandemic. They carry an interest rate below zero that means the ECB is paying lenders to lend.

    The fresh wave of stimulus comes at a time when fear about a potential second wave of Covid-19 infections is stalking investor sentiment.

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