“The internet is the world’s largest city, and Shopify is building its commerce infrastructure. The future of commerce on the internet relies on creative expression at every touchpoint. Together with developers, we are building the infrastructure to make this be.” - Tobi Lutke, Founder and CEO of Shopify
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This week, Shopify held its annual Unite conference and seized upon market momentum and heightened interest in custom commerce experiences to roll out a rich new set of storefront development tools and services. In this post, we’ll highlight the most significant changes Shopify announced and explore their expected impact on the Shopify developer community.
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Revenue Share Agreement 
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The Shopify Unite announcement grabbing the most headlines is the company’s new revenue-sharing policy featuring a lower commission structure. Until now, Shopify partners paid a flat percentage to sell on their platform, ranging from 20 to 30% of gross sales. 
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In a strategy one would expect from Jeff Bezos —“your margin is my opportunity” — Shopify partners will now pay zero commission on their first million in annual revenue on Shopify's App Store or Theme Store. After the first million, developers will pay just 15% of the gross sales. With this change, Shopify is clearly signaling to the developer community that it’s time to build (for ecommerce). 
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This new commission structure should result in lower prices and stronger margins for partners in the Shopify partner ecosystem. Until recently, this ecosystem has been overlooked by many companies, investors and developers. WeCommerce has been building, investing in and acquiring companies in this ecosystem for many years. Pixel Union, one of our portfolio companies, was among the first Shopify partners over a decade ago. A decade later, we’re still in the early innings of this ecosystem. 
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Merchant-Friendly Developments

Shopify continues to invest in its merchants’ digital experience.  One of Shopify’s central strategies is to get merchants up and running fast, and as part of that strategy, make storefronts intuitive, beautiful and extensible. Their new “Online Store 2.0” platform features sections and blocks, which enable personalization in every Shopify theme and changes the atomic unit from pages to sections. Content can be managed (added, rearranged, or removed) without coding. 
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Developer Tools for Headless Commerce 
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Shopify also introduced Hydrogen, a “quick start environment” for developers aimed at reducing the complexities of building custom storefronts. This is accompanied by Oxygen, a hosting platform that uses Shopify’s content delivery network that’s optimized for speed and reliability. Lastly, Custom Content will serve as Shopify’s Content Management platform, enabling merchants to store content in various formats within Shopify. This trio of tools are Shopify’s answer to the growing trend of headless commerce. Right now, headless is complex, expensive and thus generally only available to sophisticated merchants with in-house development teams. This first-party offering is a positive development for both agencies and enterprise merchants. 
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Opportunities for Development in the App Ecosystem
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Shopify continues to innovate on ways to allow developers to build on its platform. At Unite, Shopify introduced a series of changes to its Storefront API and Shopify Checkout, including:  

- New cart functionality that estimates the cost of products with taxes and discounts
- Selling plans that enable merchants to set up direct integrations with Shopify’s native checkout
- International pricing according to the buyer’s location
- Local pickup so buyers can purchase online and pick up in person
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Until recently, merchant developers could not directly access the checkout functionality within Shopify and were unable to optimize or customize the bottom-of-the-funnel customer experience as a result. With the introduction of Checkout Extensions, developers can now securely build apps into Shopify Checkout. We’re excited to see innovation in this critical part of the customer journey. 
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We believe these changes will drive increased app development within the Shopify partner ecosystem. When Shopify opened up its subscription API six months ago, we saw dozens of subscription apps enter the market. Similarly, we will keep a close eye on these new categories as we continue to partner with best-in-class entrepreneurs and lookout for innovators in these categories.

Just the Beginning

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‍This week's announcement makes it clear: Shopify is investing even more in its partner community and is focused on their success. Shopify’s investment in its ecosystem over the past decade have enabled developers and partners to thrive. 
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We view these recent changes as a continued clear, positive signal for the Shopify partner ecosystem. The Shopify App Store has approximately 6,600 listed Apps today, compared to over 1.8 million in the Apple App Store. We are still incredibly early in ecommerce, and we look forward to continuing to partner with wonderful technology businesses in the Shopify partner ecosystem. 

If you have a business that you think would be a good fit, please contact hello@wecommerce.co.