The recent Citron Research report and its claims that Shopify is nothing more than a pyramid selling scheme akin to Herbalife, contained some hard-hitting truths. People are being duped left, right and centre into believing that setting up an eCommerce store with Shopify is the simple way to untold riches.
It Isn't And The Reason Is Obvious:
Shopify is simply a tool to create an eCommerce website. A very good one at that, but it is not a business solution in a box. You can't sign up for a subscription and expect to start making money from day one, particularly if you don't have any business infrastructure to support you.
With its array of social media selling tools, buy buttons and integration with third-party Apps, Shopify is one of the best eCommerce platforms on the market. It provides a quick and easy way for people to set up shop on the internet and because of that, too many people get suckered into setting up a store without a better product, improved service or indeed anything else at all that marks them out as “different”.
Also, the current rush into drop shipping products using Oberlo directly from Aliexpress is an indication of how much greed drives Western business and not how good the business model is.
Encouraging the mass distribution of original products from Asia and China in tiny one-off “ePackets” all around the world will exacerbate the world's problems with global warming and find more plastic bags turning up in even unlikelier places. I couldn't imagine any Dragons Den investor sinking cash into a business model where you don't manufacture any product, own any intellectual property or have any market advantage apart from paying a small fee for using a technology that is widely available to any competitor.
Shortcuts Don't Work
It is one thing to have a platform that allows you to sell products with the minimum of coding ability required. But it is something completely different to have the skills to market those goods, gain links, do white hat SEO, write blogs consistently and generally promote your store so that you can make sales. All of these things require hard work and discipline, something that an eCommerce subscription by itself will not give you.
Many people use the standard Shopify product successfully to bring their products to market. I'm thinking of artists, photographers, cake makers, even local butchers and specialist cycle shops. What all these people have in common is a knowledge of their product or service that adds value to the proposition. If you are not adding value then what is the point? Everyone knows by now that competing on price alone is the quick way to empty your bank account.
The larger businesses that rely on Shopify Plus to power their eCommerce store are making a massive saving over using Magento or other open source software. But 2,500 stores out of the currently stated 500,000 user base is a tiny, tiny percentage.
As an eCommerce tool, Shopify is one of the best (for UK users EKM or Shopwired are equally good choices), but the aggressive marketing tactics and promises of making millionaires are more akin to promoting the National Lottery than assisting people in creating a serious eCommerce business.
Shopify is a great product, but like all other eCommerce platforms, it doesn't contain all the magic ingredients that will make you a success, those being hard work, discipline and a superior product or service.