Hmm... my company builds Shopify apps for large companies. We have had several in the app store that we maintain, that we're either moving to end-of-life or planning to.
Personally I believe the days of a solo engineer being able to build a viable Shopify app business are nearly over.
Shopify has instituted new process for assessment and approval of new apps in the app store, similar to Apple. We are finding the approvals can take weeks and sometimes require big rewrites to meet as-yet-undocumented business requirements.
Also Shopify stores can explode in bursts of traffic at a moments notice. And these apps sometimes are mission critical to the merchant's business. It is very challenging and expensive to scale an app rapidly when the folks who have installed it get large bursts of success without any forewarning. If a DTC brand launches their store with some cheap / free apps and their product goes viral, that means the indie solo app developer has to scale to meet the demand. These new DTC merchants often don't understand very much of the business of maintaining SaaS and aren't very forgiving when an app fails to keep up with the demand put on it.
The challenge is if an inexperienced developer offers the app for free or a nominal fee like $50/mo that means they have to scale up infrastructure and support and often re-write the app for a small number of merchants who are still only paying $50/mo. This happens to more Shopify app developers than I want to admit, and many many bootstrapped folks are operating at a substantial loss, looking for a way out without irking customers who depend on their app.
With that in mind, be very careful if you enter any type of SaaS marketplace. It seems tempting and low barrier to entry but you may be biting off much more than you can chew.
Any unofficial details on the business requirements Shopify looks for before approving apps? I'm working on an app and would like to avoid being blindsided.
If you’re operating at a loss and looking for a way out, just shut down and get blown out of business. Those merchants won’t hesitate to find a new product that does what you did.
> With that in mind, be very careful if you enter any type of SaaS marketplace. It seems tempting and low barrier to entry but you may be biting off much more than you can chew.
Ok, yes, I hear your gate-keeping, but counterpoint: bite anyway.
Before I quibble, let me first state that this is an excellent, well written and comprehensive guide that any aspiring Shopify app developer should read carefully.
Two Quibbles.
First, the API is very good but Shopify support will not answer developer questions about it and will push you to their developer forums. There if you are lucky you might get a useful answer within a day or two, if unlucky you won’t.
It’s shocking that a company whose entire business revolves around these APIs (its not just used by app developers but by merchants themselves) refuses to offer technical support.
Secondly, it’s a tiny market. The best data have found indicates about $50M a year total to App developers, so if you want to build that $1M MRR app, look elsewhere. Author, please correct me if this is wrong, as I’m working on a Shopify app as my side project and it would really help my motivation if my estimate is way low.
> The best data have found indicates about $50M a year total to App developers
The Shopify Developers homepage https://developers.shopify.com/ (scroll down one screen) claims $90M in 2018, unless you have some reason to doubt their claim?
The author suggested $2k/month gross revenues ~ $20k/year net, was a reasonable expectation for a niche app. So this presumes you have maybe 5 apps, developing a new one or redeveloping an existing one on a pretty regular basis. Or it presumes a side-gig. It doesn't really presume a startup company.
Very nice write up. I too am a Shopify app developer with 4 apps in the App Store, currently doing around $56k/mo and growing ~$2k/mo for the last 2 years.
Biggest thing is that the ramp up time is very slow. You're not going to get a bombastic number of installs starting off, no matter how much marketing you purchase. It's a slow climb up and the best time to launch your app is yesterday. Plan on one to two years to see decent revenue, and then hopefully continue to grow it for the next few years after that.
Shopify Plus customers and traffic spikes are definitely a big concern, especially when it comes to your pricing model. Everytime I've come up with a "worst case" scenario it has happened so you need to always have built-in contingencies around that. Whether that means reaching out to the store to create a unique plan/pricing for them and possibly adding more value services. For example, one of our apps gets between 25k to 100k webhooks per hour and the spikes are unpredictable. Our app also has a queue system to process jobs in the background which can mean there are anywhere from a thousand tasks in queue, or 500k. (Shopify API is slow and limiting for big, heavy tasks).
If you are also an actual Shopify developer (theme or private app developer) there is a lot of opportunities for upsells depending on what your app does. It seems a lot of app developers in the App Store simply have apps out there to get leads for development (service) work.
Overall, developing on Shopify has been really good. There are some annoyances with their REST API vs. GraphQL API, their documentation, their support, etc... But generally it's been smooth sailing for the past few years. But we've had very, very slow growth and only in the past couple years have paid more attention on trying to maximize our business around Shopify apps.
One of the best points the author hits on is the benefit of platforms for MicroSaaS companies. Having a reliable source of highly qualified prospects makes it much easier to build out a profitable SaaS business because you can spend most of your time building while still closing customers.
The tough thing about this is that the ease of building into the platform also attracts a lot of competition (which the author mentions in the post too). Getting in on a fast growing platform early is really beneficial because you can arbitrage the opportunity before others get into the platform. My startup was probably one of the first 50 apps in the Slack app store when it launched in December 2015.
Since then, there's been about 5 dozen startups who are in the space now, but that early Slack platform momentum gave us enough of a lead to build a real business closing in on $1M ARR with 5 people.
This depends on good timing. As a small team or single developer you don't want to invest months into building a plugin or service for a platform that won't take off. And at the time the platform has great traction, chances are that someone already took the higher risk and implemented something close to your idea.
I would be interested in knowing more about the decision process that made you confident enough in 2015 to pour resources into a Slack plugin, if you would like to share that.
There seems to be quite a bit of shadiness going on in the Shopify App Store. A cursory review led to apps that give away the sun and the moon for free, which begs the question; how are they actually making money?
How exactly do you pay for the servers and dev costs? ML experts aren't cheap. They seemed to be backed by an app studio, https://www.innonic.com/en/ . Is this a loss leader? Are they harvesting datasets and selling them to PE? Is it part of some master plan? Or, is it simply an influx of cheap capital in the wrong hands?
What's going on here?
This example is one of several I've found that seem to be data harvesting operations. Could someone trick non-technical folks into introducing severe vulnerabilities for all their customers via this? Tracking them across the internet for fraud or scummy marketing?
> You’re likely to copy an existing app and make a slight improvement in terms of product, pricing, or both. Guess what, the next smart person with the same idea can do the same to you.
Yeah that's a game that personally I could never bother playing. It sounds to me like trying to be the alpha fish in a tiny aquarium... that is closely observed and experimented with.
Going indie is no small effort, so if I did it I'd try to play a bigger game, with more freedom, where I can give my best without fear of being outmarketed because someone beat my price by a couple dollars.
I reckon the same applies to most 'app store' ecosystems.
So Shopify charges 2.9% + $0.30 to retailers for purchases in the store, but they charge 20% for developers to sell those retailers an app...
Hard not to compare this against Apple, where the total revenue generated by the Shopify App Store is perhaps around $50 million versus the Apple App Store which is more than $50 billion in digital goods & services ($500 billion including physical goods & services).
That's what happens when you have a monopoly on your own app store.
I have nothing against Shopify (I've even built an app for a customer once like 8 years ago), but the only reason they charge 2.9% + $0.30 and not 20% for transactions is because Stripe, Square and PayPal all charge 2.9% + $0.30. What's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. If there were no price fixing surely one of them would drop to 2.8% + 30c to gain an edge in market share but they don't.
From experience, Shopify's app store is great for developers who want to build something and don't want to involve themselves into thinking about distribution. It was one of my first forays into building a SAAS, and I was able to scale to 5-figure ARR.
Churn is incredibly high, unfortunately. And merchant reviews are ruthless. There's some consensus amongst Shopify devs (at least in a particular Facebook group) that Shopify isn't doing enough in weeding out unreasonable reviews and fake reviews. So it's quite possible you launch your app and get killed in your first week. I've experienced it (as well as others) where merchants take you (the dev) hostage by threatening to write a poor review (which will affect your ranking) if you don't create a feature just for them.
I no longer need to develop for their app store anymore, but it's still a good start if you're just breaking into side projects and want to monetize them.
Does anyone know if there’s a need for better label printing integration? I noticed Shopify’s docs specifically mention DYMO printers and they discontinued Zebra printer support. That seems crazy to me.
I’m a solo dev that’s built a desktop label printing app. I’d love to integrate it with Shopify. Read more at https://label.live
Anyone want to help me better understand the need for product labels, shelf tags, or fulfillment labels? Also thinking a FSBA integration would be important, too.
An app that would be installed on a merchant's shop to provide some benefit for them (usually in exchange for money). They can be custom apps for a single shop or a public app on the Shopify App Store.
Yeah I’m confused too, I thought Shopify was a platform like Wix where you could only customize the UI. Are these apps for hosted installations where you can run arbitrary code?
Do I understand it correctly? Basically, a developer would create new functionalities for the Shopify platform and Shopify will take 10/20% commission depending on the store plan from the developer?
I personally would suggest to start a business creating WooCommerce websites. At least you'll be owning the whole profit and would not depend from the whishes and decisions of a wannabe BigCorp. As an additional plus you help spreading open source software.
This is a silly and doomed to failure mindset for an aspiring entrepreneur. The question should be, how large is my addressable market and how much gross profit can I generate to cover my overhead.
Shopify Merchants are selling roughly $80B a year, at least 5x WooCommerce merchants. Paying Shopify 20% means you net at least three times higher monthly revenues over paying WooCommerce zero commission.
Apple charges devs 30%, but in return you get access to the worlds highest volume App Store paying developers $35B a year. You can also make iOS apps using an enterprise certificate, and distribute to tens of thousands with zero commission, but no one will ever find you on the store search, or give you public App Store ratings, you’ll never appear in a top category list or get featured by Apple, and any potential customers you reach will be leery of using your custom payments or subscription system, leading to lower paid conversions.
The true problem I see with these kind of integrations is that a company like Shopify can very easily figure out which third-party extensions are turning around the most revenue and then re-build those in house, only better since they have direct access to the folks building the platform.
Your customers don't want to host WooCommerce sites. Or pay a small software shop to do it for them. They want to SaaS that for a few bucks a month, which is what Shopify gives them.
User acquisition is very hard. If you can outsource that to a marketplace the commission is probably worth it, especially if your goal is to be a very lean micro-SaaS.
You are paying Shopify for discovery and the usage of certain APIs (such as payment APIs etc).
Otherwise it’s possible for someone to integrate your stuff into their store even outside of the Shopify store (by integrating JS snippets for example).
[+] [-] rwhitman|5 years ago|reply
Personally I believe the days of a solo engineer being able to build a viable Shopify app business are nearly over.
Shopify has instituted new process for assessment and approval of new apps in the app store, similar to Apple. We are finding the approvals can take weeks and sometimes require big rewrites to meet as-yet-undocumented business requirements.
Also Shopify stores can explode in bursts of traffic at a moments notice. And these apps sometimes are mission critical to the merchant's business. It is very challenging and expensive to scale an app rapidly when the folks who have installed it get large bursts of success without any forewarning. If a DTC brand launches their store with some cheap / free apps and their product goes viral, that means the indie solo app developer has to scale to meet the demand. These new DTC merchants often don't understand very much of the business of maintaining SaaS and aren't very forgiving when an app fails to keep up with the demand put on it.
The challenge is if an inexperienced developer offers the app for free or a nominal fee like $50/mo that means they have to scale up infrastructure and support and often re-write the app for a small number of merchants who are still only paying $50/mo. This happens to more Shopify app developers than I want to admit, and many many bootstrapped folks are operating at a substantial loss, looking for a way out without irking customers who depend on their app.
With that in mind, be very careful if you enter any type of SaaS marketplace. It seems tempting and low barrier to entry but you may be biting off much more than you can chew.
[+] [-] DevX101|5 years ago|reply
[+] [-] jmknoll|5 years ago|reply
[+] [-] klausjensen|5 years ago|reply
[+] [-] xwdv|5 years ago|reply
[+] [-] encoderer|5 years ago|reply
Ok, yes, I hear your gate-keeping, but counterpoint: bite anyway.
It leads to growth. Maybe in more ways than one.
[+] [-] valuearb|5 years ago|reply
Two Quibbles.
First, the API is very good but Shopify support will not answer developer questions about it and will push you to their developer forums. There if you are lucky you might get a useful answer within a day or two, if unlucky you won’t.
It’s shocking that a company whose entire business revolves around these APIs (its not just used by app developers but by merchants themselves) refuses to offer technical support.
Secondly, it’s a tiny market. The best data have found indicates about $50M a year total to App developers, so if you want to build that $1M MRR app, look elsewhere. Author, please correct me if this is wrong, as I’m working on a Shopify app as my side project and it would really help my motivation if my estimate is way low.
[+] [-] lxxvii|5 years ago|reply
The Shopify Developers homepage https://developers.shopify.com/ (scroll down one screen) claims $90M in 2018, unless you have some reason to doubt their claim?
[+] [-] jacobr1|5 years ago|reply
The author suggested $2k/month gross revenues ~ $20k/year net, was a reasonable expectation for a niche app. So this presumes you have maybe 5 apps, developing a new one or redeveloping an existing one on a pretty regular basis. Or it presumes a side-gig. It doesn't really presume a startup company.
[+] [-] donutdan4114|5 years ago|reply
Biggest thing is that the ramp up time is very slow. You're not going to get a bombastic number of installs starting off, no matter how much marketing you purchase. It's a slow climb up and the best time to launch your app is yesterday. Plan on one to two years to see decent revenue, and then hopefully continue to grow it for the next few years after that.
Shopify Plus customers and traffic spikes are definitely a big concern, especially when it comes to your pricing model. Everytime I've come up with a "worst case" scenario it has happened so you need to always have built-in contingencies around that. Whether that means reaching out to the store to create a unique plan/pricing for them and possibly adding more value services. For example, one of our apps gets between 25k to 100k webhooks per hour and the spikes are unpredictable. Our app also has a queue system to process jobs in the background which can mean there are anywhere from a thousand tasks in queue, or 500k. (Shopify API is slow and limiting for big, heavy tasks).
If you are also an actual Shopify developer (theme or private app developer) there is a lot of opportunities for upsells depending on what your app does. It seems a lot of app developers in the App Store simply have apps out there to get leads for development (service) work.
Overall, developing on Shopify has been really good. There are some annoyances with their REST API vs. GraphQL API, their documentation, their support, etc... But generally it's been smooth sailing for the past few years. But we've had very, very slow growth and only in the past couple years have paid more attention on trying to maximize our business around Shopify apps.
[+] [-] apollo1213|5 years ago|reply
[+] [-] stocktech|5 years ago|reply
[+] [-] andygcook|5 years ago|reply
The tough thing about this is that the ease of building into the platform also attracts a lot of competition (which the author mentions in the post too). Getting in on a fast growing platform early is really beneficial because you can arbitrage the opportunity before others get into the platform. My startup was probably one of the first 50 apps in the Slack app store when it launched in December 2015.
Since then, there's been about 5 dozen startups who are in the space now, but that early Slack platform momentum gave us enough of a lead to build a real business closing in on $1M ARR with 5 people.
[+] [-] dakna|5 years ago|reply
This depends on good timing. As a small team or single developer you don't want to invest months into building a plugin or service for a platform that won't take off. And at the time the platform has great traction, chances are that someone already took the higher risk and implemented something close to your idea.
I would be interested in knowing more about the decision process that made you confident enough in 2015 to pour resources into a Slack plugin, if you would like to share that.
[+] [-] areoform|5 years ago|reply
For example, this recommendation engine is "100% free", https://apps.shopify.com/orcinus-product-recommendation
Company page: https://autocommerce.io , and there isn't a pricing plan in sight.
How exactly do you pay for the servers and dev costs? ML experts aren't cheap. They seemed to be backed by an app studio, https://www.innonic.com/en/ . Is this a loss leader? Are they harvesting datasets and selling them to PE? Is it part of some master plan? Or, is it simply an influx of cheap capital in the wrong hands?
What's going on here?
This example is one of several I've found that seem to be data harvesting operations. Could someone trick non-technical folks into introducing severe vulnerabilities for all their customers via this? Tracking them across the internet for fraud or scummy marketing?
Edit: More examples,
https://apps.shopify.com/zoorix
https://apps.shopify.com/upsell-funnel-engine-upsells
Further cursory research shows that this isn't the only category with an impossible value : price ratio. What in the name of Baphomet is going on?
[+] [-] apollo1213|5 years ago|reply
[+] [-] vemv|5 years ago|reply
Yeah that's a game that personally I could never bother playing. It sounds to me like trying to be the alpha fish in a tiny aquarium... that is closely observed and experimented with.
Going indie is no small effort, so if I did it I'd try to play a bigger game, with more freedom, where I can give my best without fear of being outmarketed because someone beat my price by a couple dollars.
I reckon the same applies to most 'app store' ecosystems.
[+] [-] zaroth|5 years ago|reply
Hard not to compare this against Apple, where the total revenue generated by the Shopify App Store is perhaps around $50 million versus the Apple App Store which is more than $50 billion in digital goods & services ($500 billion including physical goods & services).
[+] [-] nickjj|5 years ago|reply
I have nothing against Shopify (I've even built an app for a customer once like 8 years ago), but the only reason they charge 2.9% + $0.30 and not 20% for transactions is because Stripe, Square and PayPal all charge 2.9% + $0.30. What's really interesting is I wonder how much price collusion is involved with the 2.9% + 30c price for payment merchants. If there were no price fixing surely one of them would drop to 2.8% + 30c to gain an edge in market share but they don't.
[+] [-] pikelet|5 years ago|reply
[+] [-] drchiu|5 years ago|reply
Churn is incredibly high, unfortunately. And merchant reviews are ruthless. There's some consensus amongst Shopify devs (at least in a particular Facebook group) that Shopify isn't doing enough in weeding out unreasonable reviews and fake reviews. So it's quite possible you launch your app and get killed in your first week. I've experienced it (as well as others) where merchants take you (the dev) hostage by threatening to write a poor review (which will affect your ranking) if you don't create a feature just for them.
I no longer need to develop for their app store anymore, but it's still a good start if you're just breaking into side projects and want to monetize them.
[+] [-] semireg|5 years ago|reply
I’m a solo dev that’s built a desktop label printing app. I’d love to integrate it with Shopify. Read more at https://label.live
Anyone want to help me better understand the need for product labels, shelf tags, or fulfillment labels? Also thinking a FSBA integration would be important, too.
[+] [-] theatrus2|5 years ago|reply
Shipping is real, and the more carriers you can support seamlessly the better.
[+] [-] edge17|5 years ago|reply
[+] [-] lreeves|5 years ago|reply
[+] [-] tarsinge|5 years ago|reply
[+] [-] pw6hv|5 years ago|reply
I personally would suggest to start a business creating WooCommerce websites. At least you'll be owning the whole profit and would not depend from the whishes and decisions of a wannabe BigCorp. As an additional plus you help spreading open source software.
[+] [-] valuearb|5 years ago|reply
Shopify Merchants are selling roughly $80B a year, at least 5x WooCommerce merchants. Paying Shopify 20% means you net at least three times higher monthly revenues over paying WooCommerce zero commission.
Apple charges devs 30%, but in return you get access to the worlds highest volume App Store paying developers $35B a year. You can also make iOS apps using an enterprise certificate, and distribute to tens of thousands with zero commission, but no one will ever find you on the store search, or give you public App Store ratings, you’ll never appear in a top category list or get featured by Apple, and any potential customers you reach will be leery of using your custom payments or subscription system, leading to lower paid conversions.
[+] [-] heipei|5 years ago|reply
[+] [-] flir|5 years ago|reply
[+] [-] zhobbs|5 years ago|reply
[+] [-] jariel|5 years ago|reply
[+] [-] fiftyacorn|5 years ago|reply
[+] [-] addicted|5 years ago|reply
Otherwise it’s possible for someone to integrate your stuff into their store even outside of the Shopify store (by integrating JS snippets for example).
[+] [-] martin_bech|5 years ago|reply
[+] [-] lumberjack|5 years ago|reply