Shopify Flow and Wholesale Poised to Accelerate Business

With the introduction of Shopify Flow and the Wholesale Channel, Shopify Plus will help accelerate and transform business. By reducing the barriers to commercialization and learning faced by niche producers and specialty retailers, Shopify Plus will increase the incentive and opportunity for merchants to continue to sharpen their market focus.
Those who learn how to use the increasingly sophisticated toolset offered by platforms such as Shopify Plus will thrive. Those who don’t will likely fail.
The sustainable advantage of niche producers is innovative product development. The advantage of specialty retailers is rapid and responsive marketing. With its new service and product offerings for larger and faster-growing merchants, Shopify Plus enables users of its platform to focus on their strengths. Those who learn how to use the increasingly sophisticated toolset offered by platforms such as Shopify Plus will thrive. Those who don’t will likely fail. This essay addresses the following:
  • The economic forces that are causing market fragmentation and the growth of niche producers and specialty retailers
  • The future for specialty retailers in the fallout from the current “retail apocalypse”
  • The new opportunities related to one-to-many wholesale for both niche producers and specialty retailers
  • How Shopify Plus is responding to—and reinforcing—these trends by further reducing barriers to entry, commercialization, and learning; and
  • The implications for human scale businesses

The Hero's Journey Through the Landscape of the Future

The Hero's Journey Through the Landscape of the FutureThis analysis builds upon many sources. In particular, my thinking over the last decade about the impact of technology on the structure of business has been heavily influenced by the writings of John Hagel and John Seely Brown. For a concise introduction to their work, see The Hero’s Journey Through the Landscape of the Future.

Conversation with David Moellenkamp

David Moellenkamp

David Moellenkamp, Director of Product for Shopify Plus

I recently had the opportunity to speak with David Moellenkamp, Director of Product for Shopify Plus. Since assuming that role a year ago, merchants using Shopify Plus have experienced an average growth rate of more than 120%. Within the last several months, David has shepherded the launch of the Wholesale Channel and Flow. He assures me that the Shopify Plus team is just getting started.

Read the Transcript

The following transcript has been edited to make it easier to read. This is Dave Bayless for Human Scale Business. I’m speaking with David Moellenkamp, Director of Product for Shopify Plus. What are the key differences between Shopify Plus and the regular Shopify e-commerce platform? Shopify Plus focuses on our highest growth and highest complexity merchants. The offering is centered around providing the tools that merchants need to help accelerate growth. That comes in a few flavors. The first is an extended set of services. Our Merchant Success Managers work closely with customers to help accelerate their growth and uncover new areas for improvement. Launch Managers help merchants get their sites up and running when they’re migrating from a different platform or when they’ve decided to launch a new opportunity. Solutions Engineers go deep to understand how to architect the best way for a merchant to achieve its goals. Second is a number of features or products that are specifically targeted towards merchants in this segment. These include things like the ability to greatly customize checkout and increased API call rates for those merchants who are leveraging integrations with external systems. There is a whole set of products such as Launchpad which helps merchants execute, monitor, and analyze sales events. Scripts help with discounting and really complex logic during the checkout process. Shopify Flow, which is a new product, is e-commerce automation that allows you to plan and automate large-scale workflows. We also have a new wholesale offering, which allows merchants to take portions of their business-to-consumer (B2C) site and parcel them off into a wholesale-specific, business-to-business (B2B) portal that merchants can use to contract with their buyers. You say Shopify Plus is for the higher growth and higher complexity merchants. At what point in an e-commerce seller’s development should they consider making the move to Shopify Plus? What we see are merchants coming in at a number of different points. You have the merchants who are already successfully selling at scale, and they need help in continuing to accelerate their growth. You have a number of merchants who are planning a huge amount of growth in the coming year, and they realize they need a lot of dedicated support and the extra features that we provide. Then you have a group of merchants who are just really complex. Maybe their integrations with 3PLs or external systems create an additional layer of complexity that they want some help in managing. The additional products and features we have make things easy. So it’s not necessarily one specific segment of merchant. They’re already at scale; they’re planning for rapid growth; or they’re dealing with complexities in their environment today. When you think about the people that are making really good use of the Shopify Plus platform what are the kinds of capabilities and characteristics that define those users? They dovetail pretty well with what we just talked about: merchants who are experiencing high growth or scale. They’re about to ramp up or launch a product, or they’re already operating at scale. So they need help in finding ways to create efficiency through workflow automation or ways to use external systems better. It’s the merchants who are growing or are already at scale that we see putting Shopify Plus to great use. To build on that, you mentioned your automation tool, Shopify Flow. Are the merchants making use of these features people who already have a fair amount of sophistication when it comes to automation? Alternatively, do you help merchants understand how to apply automation and integrations with third party applications more effectively? There’s definitely a mix. One of the big things we’re trying to do with Shopify Flow is to make workflow automation accessible to non-experts. The whole premise of Shopify Flow is to present a really approachable way to use automation that is really easy to understand for somebody without any coding skills or a developer background. When we build products like Shopify Flow, we don’t measure impact based on how much adoption we’re getting. What we actually measure is how much time we’re saving for people. How much time are we giving back to merchants they can use to grow their business rather than managing their backend operations. What is the most common misconception that you run into regarding Shopify Plus? I think the most common thing we hear is a concern that Shopify or Shopify Plus can’t handle the customization that might be needed by a merchant today. That’s a really big misconception. Shopify and Shopify Plus have one of the largest ecosystems of partners in the e-commerce space—probably the largest. With an amazing API and integration set, pretty much anything you might dream of is possible on Shopify Plus. So, the biggest misconception is that Shopify Plus is meant for smaller, simpler businesses. However, given the complexity of businesses that we see and the amazing things that they’re doing, we know that to be completely untrue. You mentioned the recent addition of wholesale features to Shopify Plus. Tell me more about what those entail and what prompted your move to add them to your offering. As we’ve been talking to our merchants and prospects, we kept hearing a recurring theme. Many merchants were struggling with bringing some of the efficiencies that they had with their B2C business to the B2B side as well. We felt that it was really a great opportunity for us to bring some of the ease that we offer to the B2C world to the B2B market. In April, we launched the Wholesale Channel. It allows our Shopify Plus merchants to quickly and simply add a dedicated wholesale portal that incorporates customer-specific pricing lists behind a gated storefront with order approval workflows and inventory management. All the things that traditionally are provided to the B2C customer, merchants can now provide to B2B, wholesale customers. It’s our offering to allow merchants to grow into a different channel. Many of our merchants sell retail B2C, but wholesale B2B represents another amazing growth opportunity. The Shopify Plus Wholesale Channel is our take at helping merchants grow their business in the B2B channel. We’re really proud of how our merchants are adopting it. We’ll continue to invest in the Wholesale Channel to drive innovation and make things easy for those merchants who want to grow. I’m curious, do you see that the users of the wholesale channel are also utilizing Shopify Flow to automate or semiautomate some of the bespoke workflows that come hand-in-hand with B2B? One of the great things about running a B2C or B2B business on the same platform is the shared back office operations. You can leverage the same workflow and e-commerce automation that Shopify Flow provides. So, we do see our wholesale merchants leveraging Shopify Flow to use the same type of automation that we see our B2C retailers utilize. The amazing thing is the ones who are selling B2C and B2B on the platform get to leverage the exact same workflows. Whether an order is a wholesale order or a retail, B2C order, the merchant gets to leverage the same backend automation in both channels. It just adds a whole bunch of efficiency for the merchant’s business. When you think about your tenure at Shopify, is there a particular achievement or milestone that stands out as something in which you’re the proudest? For me, the thing that we focus on daily and that keeps us getting up every morning is working our hardest to make our merchants successful. We give them the tools they need to be great at what they do and to allow them to shine. You know, there’s a stat we have here that I’m probably the most proud of: Over the last year, Shopify Plus merchants have grown over 120%. I’m most proud of the amazing opportunities and the amazing products and businesses that our merchants have been able to grow. Having taken part in that and having played a role in those achievements to me is the thing that I’m probably the proudest of. What gets you excited about the future of Shopify Plus? They would definitely be some of the things we’ve talked about, specifically Shopify Flow. I think there’s massive potential to help our merchants be more efficient and free their time to do what they’re really good at, which is to make amazing products and market them to their customers. Shopify Flow is just getting out of the gates, and it is already providing an amazing amount of value to our merchants. What we have planned for Flow in the future is to start to integrate external systems with which you might be working to help take automation to the next level. That’s the thing I’m most excited about.

Fragmenting Consumer Markets are the New Normal

The barriers to forming and pursuing a business venture are falling at a breathtaking pace. What not long ago took weeks or months can sometimes be compressed into days. The cost of launching a new business has fallen by an order of magnitude or more. Not surprisingly, the number of niche producers and merchants is growing. As a consequence, markets are fragmenting. Competition is intensifying. Consumers of beer, leather goods, kitchen gadgets, and skin creams are inundated by choice. In fact, we continuously discover new needs and product dimensions. We’ve come to expect offerings that immediately and precisely fit our lifestyles, needs, and whims. “Good enough” rarely is.
Cycle of Fragmentation

Access to markets and diminishing barriers drive specialization. Consumer preferences fuel a reinforcing cycle of fragmentation.

The impetus to specialize is reinforced by an entire ecosystem of technologies that allow niche producers to reach a global market. For example, I recently purchased some skin cream from Fern Koh, founder of Fernberry. Fern is based in Hong Kong. Her product range is currently limited to just four items, which are manufactured to her specifications in Japan. I placed the order via Fernberry’s website. The product was delivered to my home in Bozeman, Montana, within days by a collaboration between Hong Kong Post and the USPS. That’s global reach. Interview of Fern Koh More than 200 years ago, Adam Smith wrote about the compelling economic logic of the division of labor—of specialization. He noted, “The division of labor is limited by the scope of the market.” Small markets inhibit specialization, while expansive markets demand specialization. Much has changed in 200 years. This truth has not. Smith would not be surprised to learn of Fernberry in today’s economy. Division of Labor It’s conceivable that the fragmentation we’re experiencing today will subside. After all, many industries have lived through periods of fragmentation followed by consolidation and relative stability. What’s changed, though, is the clock speed of business. The life cycle of products has shortened. Consequently, it’s reasonable to expect that the fragmentation cycle will proceed without apparent pause. Churn and fragmentation are likely to be the new normal. Twenty years ago, Charles Fine explored the “genetics of business,” in his book, Clockspeed. He noted, “the bureaucratic and organizational rigidities that often settle upon large, established companies.” Fine observed how the “fruit flies” of business have an adaptive advantage over the “elephants” of business in tumultuous times. The dissipation of advantage when a company grows is called a diseconomy of scale. Diseconomies of scale are another reason why market fragmentation may be the rule rather than the exception. Clockspeed

Niche Producers and Markets Face Diseconomies of Scale

Most of us are familiar with economies of scale and scope. A manufacturing company tends to become more efficient when it makes a lot of the same thing. As scale increases, a manufacturer can offer its product profitably at a lower price. A retailer who can offer a range of products will often have an advantage over that which has but a single product. The cost of sales related to the first product in the shopping cart is much higher than the incremental cost of additional products. For example, Amazon enjoys massive economies of scale from its technology, logistics, and fulfillment infrastructure. As a marketplace, it enjoys remarkable economies of scope. Given the success of the Amazon juggernaut, it’s difficult to conceive that there can be diseconomies of scale in business. To see how diseconomies might exist, consider the fundamentals of marketing. Value is personal, relative, and time-sensitive. Niche producers can be more attuned to the shifting needs of their customers and act upon them more quickly than can larger companies. For instance, P&G is one of a handful of companies that have been among the world’s largest for at least 100 years. It’s safe to assume that P&G knows a lot about sustaining a high level of business success in consumer markets. I once heard an executive at P&G say, “In order to meet the revenue expectations of Wall Street, we need to identify $70 million of new revenue every week. What week do you want?” When $70 million dollars of instantaneous revenue barely moves the needle, it’s understandable that P&G can’t respond to every twitch in fashion it perceives among its global customer base. P&G can’t, but Fernberry can. Of course, perceiving opportunity is one thing; acting upon it through new product development and commercialization requires creative talent. Such talent very often seeks the autonomy and market intimacy offered by smaller businesses. Silicon Valley is dominated by technology giants. However, those giants often turn to small design boutiques such as Astro Studios for product design help. Astro Studios The implications of diseconomies of scale for niche producers are profound. Niche players that grow too large may have difficulty retaining talent. Furthermore, they may find it increasingly difficult to stay connected with and respond to their customers.
Cultivating a dynamic portfolio of relatively small opportunities may become more common than pursuing a single, relatively large opportunity.
Given the preceding, our notion of what constitutes addressable revenue opportunity may need to be recalibrated. Cultivating a dynamic portfolio of relatively small opportunities may become more common than pursuing a single, relatively large opportunity.

Operational Complexity Grows Explosively

Notwithstanding the ultimate market potential of a product, demand very often follows an S-shaped growth curve. That’s due to the reinforcing effects of gradual accumulations of market awareness, customers, product offerings, distribution channels, and market reach. Eventually, growth slows due to market saturation, competition, and shifting consumer tastes, desires, and needs.
Demand Grows Nonlinearly

Demand over time often reflects the familiar S-shaped growth curve.

Even before demand starts to ramp up, operational complexity tends to explode. The permutations of product offerings, marketing and distribution channels, pricing, technology platform integrations, and sheer volume combine in a mind-boggling fashion. In the best of circumstances, it’s a struggle to scale operational capacity in-step with demand.
The permutations of product offerings, marketing and distribution channels, pricing, technology platform integrations, and sheer volume combine in a mind-boggling fashion.
As noted above, the core strength of most niche players is in product development and marketing. They tend not to have the expertise, capital, or time to develop operational capacity in a propitious fashion. Consequently, it should come as no surprise that platform companies such as Shopify have experienced tremendous growth. Their value proposition is compelling. Shopify Plus offers scalable infrastructure on-demand at a tiny fraction of the cost of building your own capacity.

Market Fragmentation Drives Infrastructure Concentration

Somewhat ironically, the fragmentation of product development and marketing is happening concurrently with the concentration of related infrastructure management. In fact, these are reinforcing trends. Fragmentation drives the demand for the services provided by large-scale infrastructure providers, and the economies of scale and scope enjoyed by infrastructure providers lower barriers to entry, learning, and commercialization–that encourages additional fragmentation.
Reinforcing Cycle of Fragmentation and Concentration

Market fragmentation and infrastructure concentration reinforce each other.

  For instance, Ryan Barr at Whipping Post has an eye for design and a great feel for his market. Whipping Post epitomizes a successful niche producer and merchant.
Whipping Post Screenshot

Whipping Post epitomizes a successful niche producer and merchant.

Ryan rents operational capacity from Shopify to allow him to manage the complexity that has arisen from the success of his products. As a result, Ryan can focus more of his time on developing new products rather than getting mired in the management of an expensive back office. Learning and the Disadvantages of a Conventional Business Education Infrastructure providers such as Shopify Plus deliver reliable, high-volume, routine process services. They benefit enormously from economies of scale and scope. As Shopify Plus grows, it shares the benefits of such economies with its customers in the form of relatively low costs, improved services, and access to tools and technologies in which a tremendous amount of knowledge is embedded. That further drives down barriers to entry and learning, which encourages the proliferation of new niches.

Shopify Plus Poised to Accelerate the Cycle of Fragmentation and Concentration

The market shares of e-commerce platform providers are characterized by a “long tail” distribution. The market leaders—WooCommerce, Shopify, and Magento—represent a disproportionate share of the market. That is, they represent the “head” of the distribution. The other 399 providers populate the long tail.
The Long Tail

Source: Chris Anderson

There is no apparent reason why this distribution won’t become even more skewed in the coming years in favor of the “big three.” Given the evolution of Shopify Plus, I expect that Shopify may experience the fastest growth and exert the greatest influence on the pace of change in the industry.
Given the evolution of Shopify Plus, I expect that Shopify may experience the fastest growth and exert the greatest influence on the pace of change in the industry.
WooCommerce is a tremendously flexible and powerful set of modular tools. It powers this website. However, the learning curve related to the management of a WooCommerce site is relatively steep. All that potential flexibility requires constant management. That’s not a disqualifier for us here at Human Scale Business. However, we don’t face the same degree of operational complexity with which Ryan Barr grapples. Time and attention are scarce resources. To be successful, Ryan must be choiceful how he devotes his time. On paper, Shopify Plus may not offer the same degree of customization as WooCommerce. In practice, however, Shopify Plus offers more than enough customization for the vast majority of niche producers and specialty retailers. Like WooCommerce, Shopify Plus benefits from a flexible, modular architecture, an expanding ecosystem of extensions and third party services, and the option to create custom code. So, the relative degree of potential customization is a distinction without a difference for most users. Where Shopify Plus really sets itself apart is how it reduces barriers to learning. It’s easier for non-specialists to take advantage of the growing set of advanced capabilities of Shopify Plus compared to other platforms. It’s by lowering the barriers to learning that Shopify Plus will continue to influence market dynamics.
It’s by lowering the barriers to learning that Shopify Plus will continue to influence market dynamics.
If it’s true that the access to operational capacity represented by Shopify Plus is likely to encourage an increase in the supply of niche producers and specialty retailers, Will there be a commensurate demand for specialty retailers? In other words, is there a sustainable role for them in the evolving market?

The Future for Specialty Retailers

The retail industry is in disarray. Many large, brick-and-mortar retailers who have thus far avoided bankruptcy are closing stores at a record pace. Pundits proclaim that Amazon is “eating retail.”
  • Given this retail apocalypse, is there a role for specialty retailers?
  • Will large e-commerce merchants enabled by apparently inexhaustible economies of scope dominate the new retail landscape to the exclusion of others?
  • What does this portend for niche producers who wish to cultivate a viable wholesale channel?
The Great Retail Apocalypse

The Lilliput Effect

Paleontologists have noticed that many species shrink in size after mass extinctions…though some get bigger. It’s called the Lilliput Effect, after the fictional island in Jonathan Swift’s book, Gulliver’s Travels, which is inhabited by tiny people. An ecology marked by a few large species and many small species can last for a long time. The same might hold true for our economy after the current wave of retail business extinction. The Lilliput Effect There’s reason to believe this is more than a fanciful analogy. Consider the membership of eCommerceFuel, a community of specialty e-commerce merchants, run by Andrew Youderian. eCF consists of founders of niche sites who have achieved revenue of $1 million or more. Some manage multiple stores of that magnitude. What binds them is their laser-sharp market focus and sophisticated use of outsourced fulfillment and technology platforms. eCommerceFuel Additional anecdotal evidence is given by Mark Hill, President of the Association for Creative industries. The majority of his trade organization’s members are small, independent retailers. In recent years, independent craft and creative products retailers have been buffeted by successive waves of competition from big box category killers such as Michaels and Jo-Ann Stores, dedicated aisles in Walmart and Target, and e-commerce sellers such as Amazon. Nevertheless, he notes, “We’re starting to see a significant number of brand new businesses forming.” In fact, Mark goes on to elaborate, “Our fastest-growing membership segment consists of start-up businesses.” Specialty retailers succeeding in the current environment are, “providing differentiated product assortments, unique relationships, and exciting experiences.” Life After Disruption: A Conversation with Mark Hill at AFCI The emergence of a new wave of specialty retailers is a manifestation of the unbundling of the wholesale marketing channel. AFCI and eCF members are especially adept at market segmentation.

The Functions of a Marketing Channel

Any marketing channel—B2C or B2B, direct or indirect—must perform the same basic functions. What varies are the players in the channel who perform each function.
The Functions of a Marketing Channel

All marketing channels must perform these functions.

Consider Sears. For the better part of a century, it did everything from developing exclusive products (e.g. hardware, appliances, musical instruments, and houses) to logistics to merchandising. It even owned product service centers, insurance companies, and consumer credit companies. It epitomized vertical integration in consumer products. E-commerce, third party logistics, and ubiquitous payment processing have more recently encouraged a modular approach. Today, retailers tend to focus on marketing. Logistical and transactional functions are increasingly outsourced to others. These mix-and-match combinations are known by a variety of names, including drop-ship reselling, direct-to-consumer e-commerce, and the catch-all, “wholesale.” Functions of a Marketing Channel

Specialty Retailers Focus on Market Intelligence and Segmentation

Zoom in on the marketing column and we can see how different retailers emphasize different functions:
Retailers by Market Size and Segmentation

Different retailers emphasize market size and segmentation.

  • Marketplaces such as Amazon and major retailers such as Walmart leverage the scope of their offerings to maximize aggregate demand. They’ll sell almost anything to nearly everybody.
  • More specialized retailers such as The Natural Baby Company limit the breadth of their product lists in order to understand their market more deeply and segment their customers more effectively.
  • Niche producers who sell direct such as Fernberry and Whipping Post have an even more personal connection with their customers. However, niche producers forfeit the demand-generating benefits of product scope. In addition, their understanding of their customer may be one-dimensional as a consequence.
While the Lilliput Effect may open the door to more specialty retailers, niche producers have historically found it difficult to work with a large number of small retailers as wholesale customers. Instead, manufacturers have preferred to sell to a handful of larger retailers. That, too, may change.

The Norm Was One-to-Several Wholesale Relationships

Historically, indirect wholesale channels were characterized by a one-to-several relationship between a producer and its retailer-customers. If a niche producer wanted to sell its products outside of its hometown, it cultivated relationships with a handful of distributors and regional or national retailers. Such relationships were codified in a set of bespoke order, shipping, and payment processes and terms that were dictated by the (usually much larger) customer. One-to-several wholesale relationships offer a mix of advantages and disadvantages:
  • Although costly to establish, customer relationship management is reasonably straightforward once established.
  • The growth potential represented by a wholesale relationship with a major retailer like Walmart and Target continues to entrance niche producers. Having one’s product on the shelf at Target is validating and the top line growth is scintillating. Nevertheless, large retailers’ need for scale works at cross-purposes to those niche producers who face diseconomies of scale.
  • Having a handful of large customers is operationally expedient but it exposes the niche producer to customer concentration risk. What Amazon gives, Amazon can take away.
  • Large customers are aware of their market power, and they use it to drive costs down. Nobody should be surprised when Walmart demands a price cut on a successful product.
  • Although large retailers have access to a tremendous amount of data that can fuel consumer insight, they are loath to share it. In fact, they are notoriously jealous of their customer relationships. Consequently, old school wholesale distribution through a small set of major customers can have the effect of isolating a manufacturer from the ultimate user of the product even as it broadens the base of customers.
Despite the considerable disadvantages, a one-to-several relationships approach has been viewed by many niche producers as the only viable wholesale strategy.

Shopify Plus Enables One-to-Many Wholesale

Cultivating a distribution network consisting of a relatively large number of smaller, specialist retailers offers several potential benefits to niche producers:
  • Specialist retailers are more likely to be attuned to the needs of your shared customer base. It’s possible that they might be more willing to share their market insights for mutual benefit.
  • Their market focus may be more consistent with the brand image you wish to project.
  • Selling to a large number of specialist retailers is less risky than selling an equal volume to a smaller set of large, wholesale customers.
  • Specialist retailers have less market power than large retailers. Sure, the little guys, too, want favorable pricing to maximize their profits. Nevertheless, they won’t be able to demand favorable terms in the same way a Hobby Lobby can.
The hitch, though, is that creating highly personalized pricing, ordering, and payment systems for scores of specialist retailers is untenable for a niche producer. The phone calls, emails, and ad hoc pricing and procedures soon become overwhelming and unprofitable. With the launch of its Wholesale Channel, Shopify Plus is helping to rewrite the rules of the game. By leveraging technology and standardized workflows, a niche producer can realistically contemplate a one-to-many wholesale relationship structure.
By leveraging technology and standardized workflows, a niche producer can realistically contemplate a one-to-many wholesale relationship structure.
Instead of one, tentative wholesale relationship with Target, imagine having customer relationships with many specialty retailers. Given a new set of online tools, specialty retailers start to look more like highly motivated brand advocates compared to large retailers who are risky, operationally demanding, and comparatively unfocused.
Niche Producers and Specialty Retailers

Niche producers and specialty retailers have highly complementary needs.

Potentially, there is another reinforcing dynamic at play here. As a group, specialty retailers may be an ideal fit for a niche producer seeking to reach a specific target market. In turn, specialty retailers desire access to differentiated products. By reducing operational friction, Shopify Plus can help get this flywheel spinning, too.

Shopify Plus Positioned to Drive Change

Shopify Plus offers scalable e-commerce operations capacity on-demand to rapidly growing and other merchants who face a high degree of complexity. By taming operations, scarce resources can be devoted to innovation and marketing. As David Moellenkamp puts it, ” We give merchants the tools they need to be great at what they do.” In addition to offering technology products in which a tremendous amount of knowledge is embedded, Shopify Plus offers niche producers and specialty retailers a growing portfolio of services:
  • Launch Managers assist with platform migration and new initiatives.
  • Merchant Success Managers are on-hand to help merchants fine-tune their operations and make effective use of workflows and e-commerce automation.
  • Solutions Engineers can help merchants extend the Shopify platform.
The new Wholesale Channel extends the familiar Shopify B2C platform with a focused set of B2B capabilities including price lists, inventory management, ordering and fulfillment workflows, payment processing, and customer service functions. It promises to make the cultivation of many B2B relationships plausible for niche producers to a degree that simply wasn’t possible until recently.
Shopify Plus is positioned to help accelerate the transformation of business by continuing to lower the barriers to entry, commercialization, and, maybe most importantly, learning.
Shopify Flow offers the prospect of sophisticated e-commerce workflow automation for non-experts. I’ve not seen its inner workings yet but I’m anticipating an easy-to-use trigger → action structure reminiscent of Zapier. However, I expect Flow to be optimized for high-transaction volume e-commerce. If so, Shopify Flow has the potential to significantly reduce the operational friction that inhibits rapid growth. Read More About Shopify's E-commerce Automation Solutions A focus on customer success combined with services and products attuned to the complex needs of rapidly growing merchants is a promising mix. Shopify Plus is positioned to help accelerate the transformation of business by continuing to lower the barriers to entry, commercialization, and, maybe most importantly, learning.

Implications for Human Scale Businesses

Laura Black and I work with founders of niche producers who sell to consumers online. These “human scale businesses” tend to fall into one of two categories:
  • Creative entrepreneurs have aspirations that don’t necessarily include rapid growth. The purpose of their businesses is to achieve personal, creative, and social goals while generating sufficient profit.
  • Growth-oriented entrepreneurs often start as creative entrepreneurs. Over time, they embrace the challenge and rewards of growing a business with revenues in the millions of dollars.
Growth-oriented entrepreneurs face the steepest operational learning curve. Those who avail themselves of tools such as Shopify Plus and apply them effectively will have an enormous advantage over founders of niche producers and specialty retailers who fail to do so. By reducing the friction and overhead associated with commercialization and operational scale, skillful niche producers will be able to innovate and adapt faster than their competition. Rapidly growing niche producers and specialty retailers alike face complex, challenging—even daunting—hurdles. Even so, it’s an incredibly exciting time to be part of a human scale business. Hold on…Shopify Plus is turning up the gain.