Author Topic: SHOP - Shopify  (Read 13370 times)

jeffmori7

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SHOP - Shopify
« on: October 05, 2017, 06:45:03 AM »
I am surprise there is nothing on Shopify here. When everybody is looking at Amazon and how it is transforming the retail industry, and much more, there are probably other players benefitting from this transition to e-commerce.

Shopify is a good enabler, allowing anyone to build a platform to do e-commerce. Even Amazon are customers.

Like Amazon during a long time, or any other large tech "startup", we are talking about a company not yet profitable, but growing at a decent rate, and where it is obvious that the value will probably go up at a decent rate over time. But there are no easy ratio to price it with the usual suspect. They don't have a large debt, they are growing fast, they are quite dominant, and there is a strong tailwind in their sector.

Here is a little overview: https://www.fool.com/investing/2017/08/30/shopifys-draws-inspiration-from-amazon.aspx

And here is the last investor presentation: https://s2.q4cdn.com/024715446/files/doc_presentations/2017/09/Investor-Deck-Q2-2017-(1).pdf

What do you think?
« Last Edit: May 06, 2019, 11:10:44 PM by Parsad »


Liberty

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Re: SHOP- Shopify
« Reply #1 on: October 05, 2017, 07:15:19 AM »
And here's the Andrew Left short report that made it tank in the past few days:

http://www.citronresearch.com/citron-exposes-the-dark-side-of-shopify/
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KCLarkin

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Re: SHOP- Shopify
« Reply #2 on: October 05, 2017, 08:09:07 AM »
It's a very interesting business. As Amazon hollows out the retail industry, especially department stores, there are many niche brands that will need to find a new channel. In many cases, I think a direct-to-consumer model can be powerful if the brand is strong enough.

The alternative is selling on Amazon. But the issues with counterfeiting and brand dilution should discourage many brands from selling on Amazon.

It seems like SHOP is a winner. But obviously, it is hard to say how much is already priced into the stock. I'm tempted to take a speculative bet on this, just because I don't think Left is that bright.

Disclosure: I know some people who work at Shopify's Toronto office. They are smart people, so this may bias my opinion in favour of Shopify.

DooDiligence

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Re: SHOP- Shopify
« Reply #3 on: October 05, 2017, 08:41:43 AM »
I just browsed the sight for 5 minutes & didn't see any of the stuff he talked about.

The 50K vs 500K argument seems like BS (80/20 & all that.)

At 1st glance they appear to offer a nice set of tools for medium, small & micro sized operators.

Gerber's E-Myth, living & breathing if a shop operator is successful & puts their business up for sale (and really has supply chain, etc., to back it up - caveat emptor...)

Does look expensive & the market lopped over $1B off (maybe he can talk it down a bunch more?)

Might sharpen management on potential regulatory actions against any kind of whiffy DRM.

Then Left covers & goes long?
Healthcare 23.9% - CVS EW NVO // BRK.B - 23.0% // Auto's & Oil 14.5% - CLB GPC VDE

Entertainment 4.5% - DIS // Banking 9.8% - WFC // Drinkers & Smokers 6.0% - MO

%'s held @ MV 11/15/2019 minus 18.4% investable cash

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DCG

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Re: SHOP- Shopify
« Reply #4 on: October 05, 2017, 01:33:58 PM »
It's a good company, and I've looked at it as an investment before, but I generally don't invest in companies that are not profitable.


It seems like it should be easier for them to turn a profit. How much are they spending on things like marketing?

MikeTheCannon

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Re: SHOP- Shopify
« Reply #5 on: October 05, 2017, 01:43:41 PM »
I just browsed the sight for 5 minutes & didn't see any of the stuff he talked about.

Resignation letter: https://www.shopify.ca/blog/75848773-ready-to-become-a-full-time-entrepreneur-heres-how-to-quit-your-job

Affiliate Program: https://www.shopify.ca/affiliates

"Online store for someday millionaires": https://www.shopify.ca/facebook/millionaire

"2700 people become millionaires each day": https://www.facebook.com/shopify/posts/10153167684546881

Find products to sell: https://www.shopify.ca/oberlo

4 Tips to help you create a profitable affiliate blog post: https://www.shopify.com/partners/blog/creating-a-profitable-affiliate-blog-post



gjangal

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Re: SHOP- Shopify
« Reply #6 on: October 05, 2017, 04:38:16 PM »
if you believe in Amazon's or any other ecommerce platforms 3rd party seller story, SHOP is enabling them in a big way. Drop shipping, company stores etc. 500k across the world sounds like a low number for the core order processing platform they have

DooDiligence

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Re: SHOP- Shopify
« Reply #7 on: October 05, 2017, 04:44:11 PM »
I just browsed the sight for 5 minutes & didn't see any of the stuff he talked about.

Resignation letter: https://www.shopify.ca/blog/75848773-ready-to-become-a-full-time-entrepreneur-heres-how-to-quit-your-job

Affiliate Program: https://www.shopify.ca/affiliates

"Online store for someday millionaires": https://www.shopify.ca/facebook/millionaire

"2700 people become millionaires each day": https://www.facebook.com/shopify/posts/10153167684546881

Find products to sell: https://www.shopify.ca/oberlo

4 Tips to help you create a profitable affiliate blog post: https://www.shopify.com/partners/blog/creating-a-profitable-affiliate-blog-post

Thanks; so they promote DRM thru affiliates (with extremely aggressive & some may say dubious copy) in order to open more stores & get more affiliates & they train the affiliates to keep them on message.

When you say it like that it kinda does sound like Herbalife (all that & still not turning a profit, unlike Herbalife.)

Any evidence of channel stuffing?

Are e-commerce operators actually making money or are they just building pretty stores & selling them to naive buyers?
Healthcare 23.9% - CVS EW NVO // BRK.B - 23.0% // Auto's & Oil 14.5% - CLB GPC VDE

Entertainment 4.5% - DIS // Banking 9.8% - WFC // Drinkers & Smokers 6.0% - MO

%'s held @ MV 11/15/2019 minus 18.4% investable cash

i trumpet my ignorance

https://twitter.com/tunawish


Pelagic

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Re: SHOP- Shopify
« Reply #9 on: October 09, 2017, 09:50:35 AM »
Anyone taken a look at the Shopify Store Marketplace where store owners can sell their stores?

https://exchange.shopify.com/shops?category_ids=&sortBy=trending_value_high_to_low&total_revenue=50000%2C500000

I realize there are other sites available to market Shopify stores but some first impressions from Shopify's own store marketplace.

Most of the higher revenue stores appear to have been created to sell. Revenue has a distinct inverted V shape where a year ago it was almost nothing then it spikes up quickly and then falls off as the seller moves to "pursue other ventures". Very few stores for sale have multiple months of high earnings, there isn't the plateau in an earnings graph you'd see in more mature businesses. Since stores are mainly priced off total sales and traffic, there's an incentive to source a hot product, dump money into ads to drive traffic, sell large volumes at low cost (low margins) to inflate total sales, and then sell the store citing its potential revenue and repeat the process.

I'd be interested in seeing what % of Shopify's millionaires came through the stores they run versus through selling the stores themselves.