Shopify Announces 0% Commission for Developers on First Million Dollar Revenue

UTC by Bhushan Akolkar · 3 min read
Shopify Announces 0% Commission for Developers on First Million Dollar Revenue
Photo: Depositphotos

In a major move that helps the developer community, Shopify has introduced less commission on developer revenue for both the App Store and the Theme Store. Check out some other updates announced at the Shopify Unite 2021 Conference.

In a major announcement on Tuesday, June 29, e-commerce multinational Shopify Inc (NYSE: SHOP) announced lowering its revenue share from developers who publish applications on the app store. Thus, developers publishing apps at the Shopify App Store can keep 100% of their first $1 million in revenue. The announcement came during the Shopify Unite 2021 Conference, the e-commerce company also revealed that the 0% commission on revenue will come into effect by August 1.

This move comes as other tech giants like Apple Inc (NASDAQ: AAPL), Google LLC (NASDAQ: GOOGL), and Inc (NASDAQ: AMZN) adopted similar measures.

Developers have been objecting to a steep surge in the commission fees for a while. This has also led to lawsuits and antitrust investigations against the tech giants. Commenting on the recent development, Tobi Lütke, CEO of Shopify said:

“The internet is the world’s largest city, and Shopify is building its commerce infrastructure. Especially over the past year, we saw independent businesses succeed by showing up creatively and uniquely in this city. 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 possible.”

Shopify Cutting Down on Commission for Higher Revenue

Speaking at the Unite 2021 Conference, Shopify President Harley Finkelstein also noted that the company is willing to cut down the fees for developer revenue above $1 million. For higher revenue, Shopify will charge a 15% commission instead of the existing 20% commission.

That’s “half of what other popular app stores cost,” Finkelstein said. “We are making it easier for you to change the direction of the future of commerce and make a living doing it,” he added.

Shopify also stated that last year in 2020, its app developer partners earned $233 million in revenue. This was more than the combined revenue of the previous two years 2018 and 2019.

Shopify also announced that the same commission model will be applicable to the Shopify Theme Store. Since both the store are separate entities, the $1 million revenue share applies to each store individually. Of course, the recent change in the commission structure means a drop in Shopify’s revenue. But the e-commerce giant adds that these changes are crucial as they will encourage more innovation and development.

Key Updates Announced at the Unite 2021 Conference

Apart from the developer fee, there have been a host of other announcements Shopify made at the Unite 2021 Conference. This includes developer tooling and framework, APIs, Checkout, etc. Some of the key updates from Shopify include:

  • Shopify Online 2.0: a flexible and customizable update to the Shopify Liquid Platform
  • A new React framework for building custom storefronts called Hydrogen
  • Hosting the Hydrogen storefront on Shopify via Oxygen
  • More metafields for products and product variants along with custom content built atop it.
  • A Payments Platform for integrating third-party payment gateways into Checkout
  • Faster checkouts and checkout extensions

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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