Shopify Takes On Amazon: Is Now the Time to Buy? – The Motley Fool

Shopify Takes On Amazon: Is Now the Time to Buy? – The Motley Fool

E-commerce platform Shopify (NYSE:SHOP) has showcased the strength of online retail with its rapid growth and tremendous performance throughout the pandemic. Now, with the launch of the Shopify Fulfillment Network under its belt and designs on two-day U.S. shipping, is Shopify set to be Amazon‘s (NASDAQ:AMZN) newest upstart challenger?

Warehouse fulfillment is a plus

The coronavirus pandemic accelerated the consumer shift to online shopping, and Shopify has benefited greatly from the wave of entrepreneurs rushing to set up digital storefronts. The company’s third-quarter results reaffirmed this trend as total revenue grew 96.5% year over year and 7.4% from the previous quarter. Subscription solutions revenue, which comes largely from monthly subscriptions to Shopify plans, increased 24.9% quarter on quarter as free trials converted to paying accounts. What makes this year notable beyond new shop creation, however, is how Shopify is rolling out features that support its merchants for long-term growth. 

Two women chatting while loading a box onto a trolley in a warehouse.

Image source: Getty Images.

The company’s current, sky-high growth rate is highly dependent on factors like unemployment, the length and severity of the pandemic, and consumer spending. New shops could open and fold quickly, never producing significant revenue for Shopify. But management has been proactive in situating the company for a strategically sound future, and the launch of Shopify Fulfillment Network is a huge step forward. 

The company has continued to build its fulfillment foundation since 2019,