Understand any stock in simple English
Enter a ticker to learn what the company does and how it makes money.
Shopify sells software that lets anyone set up and run an online store, and it takes a cut of many of the sales that flow through its platform.
Shopify gives people and businesses the tools to sell things online without building a website from scratch. A merchant signs up, picks a template, lists products, and within hours has a working store that can take payments and track orders. That software is the core product, but Shopify also sells extra tools on top: payment processing, point-of-sale hardware for physical shops, and shipping and capital services.
The money comes from two places. Merchants pay a subscription fee every month to use the platform, and Shopify takes a small slice of each sale that runs through its payment system. The subscription side is steady and predictable, but the payments side grows with the merchants' success, so it is the bigger long-term engine. Customers choose Shopify because it handles the messy plumbing of online commerce—payments, taxes, inventory, shipping—so a small shop owner can focus on selling. The honest tension is that Shopify's growth is tied to the health of small and medium businesses, which are fragile in tough economies. It also faces competition from Amazon, which offers its own selling tools, and from website builders like Wix. But Shopify has pushed hard into physical retail with its point-of-sale system and into business-to-business selling, opening new doors beyond the classic online store. It spends heavily on product development and has made big acquisitions to strengthen its software, though it has largely avoided the giant, debt-funded deals that weigh down some peers.
One detail worth knowing: Shopify was founded in Ottawa in 2006 by Tobias Lütke and Scott Lake after they struggled to build an online snowboard shop themselves. That frustration shaped the product—the software was built by people who had personally fought with the plumbing of e-commerce, which is a big reason merchants find it unusually practical.
Saved answer · last researched 21 Oct 2026