As great as ecommerce platforms can be, there are certainly some things you should be aware of before paying for one. Those things you need to be aware of can depend a bit on based on the platform you are going to use, and on this page we will focus specifically on things to know about Shopify.
1: Shopify Payments is not available for every country
“Shopify Payments” is Shopify’s own payment system. And in many ways it is the best system for accepting payments for purchases made on an online store built with Shopify. However, unfortunately it is not available for every country, and instead at the time of writing this it is available for less than 20 countries.
While that “20 countries” covers many of the world’s biggest countries, it does leave out major countries such as Brazil, China, France and India.
It is entirely possible to run a Shopify store using another payment system, but in many cases that will cost extra. So that should be something to be aware of before launching your store.
2: Running a Shopify store is not an easy way to make a lot of money
These days there are quite a lot of videos and articles giving the impression that you could launch a simple store with Shopify and instantly start pulling in loads of cash. Unfortunately, that is in almost all cases far from the truth. Instead you will very likely find out that it is initially hard to generate any type of significant profit through your online store. It is certainly not impossible, but getting into ecommerce should be seen as a long-term commitment and not as a “get-rich-quick” -scheme. Even Amazon wasn’t an overnight success.
3: Transaction fees can cost you a lot of money
It would be nice if you could just pay the monthly (or annual/biannual) fee for your Shopify plan and be done with the Shopify-related expenses. Unfortunately though it does not work like that. Instead you will be charged a smallish percentage of every purchase that takes place in your store. While the percentage taken is small, in terms of money the fees can stack up to huge amounts of cash.
You can find out more about the transaction fees, for example, from our Shopify review.
4: The P/E ratio for Shopify (and other ecommerce) stores is depressingly low
P/E ratio is a number that basically tells you how many years’ of earnings investors think a certain company is worth. E.g. if a company makes $100 per month and its value is $12,000 it would mean that company is seen to be worth 10 years of earnings. One might think that Shopify stores would carry a very high P/E ratio as they are in a fast growing industry.
Unfortunately though that appears to be false. That as on Shopify’s marketplace Shopify stores are usually listed for sale for just a couple of months’ or a couple of years’ worth of earnings. That is obviously disappointing if you are dreaming of starting a Shopify store, getting it to some profitability and then quickly cashing out for a nice paycheck.
Final note: Even though the 4 things mentioned above are not exactly encouraging for launching a Shopify store, it is good to note that there are a lot of people who are currently running a highly successful business build with Shopify. And who knows, maybe through hard and smart work your store will also become a success story?