Dollars & Sense

Simplicity ⚪️

When Apple launched its new iPhones this month, one of its most noteworthy updates was replacing its Lightning charging cable with a USB-C. This was not a voluntary move or extension of Steve Jobs’s love of simplicity. Apple changed it because the European Union required them to, according to Ben Cohen in The Wall St. Journal. Now, just about every mobile phone in the world (forget just little ol’ Europe) will have one charging solution (USB-C).

While this may seem logical, it didn’t come easy. Back in 2008, there were more than 30 different charging cable options in Europe. (Don’t we all have a drawer with myriad charging cables at home?) In 2009, the E.U. passed a regulation to winnow this down to three: MicroUSB, USB-C, and Lightning. It took us another fifteen years to simplify those three down to one cable.

“The simple solutions are often the best and most practical,” said Alex Agius Saliba, the E.U. legislator responsible for getting Apple to adopt USB-C. At Shop Local, we agree. Our job is to make running a website simple for our nation’s indie stores. Our nation’s indie retailers are short on labor and tech know-how, and damned if they don’t offer a great website with lots of product selection. We have to make selling online easy for them. Online sales have increased every year for the last 20 years by double digits, and Amazon is gobbling up much of this growth. (More than 50% of U.S. homes subscribe to Amazon Prime.)

Retailers, like Mobile Phone Users, Want Simplicity
Indie retailers want a simple solution to run their in-store and online businesses. Recently, Shopify, which is a publicly traded company founded in 2007, has become a popular choice for retailers.

For example, a retailer may choose Shopify to simplify their operations. According to Shopify’s marketing message, the store can put its POS and website under one umbrella. The Shopify POS and website sync products and orders with each other. The store owner never has to worry about what is on its website since that is what is in its POS. The sales pitch is, “Why update two systems when you can have just one?”

A POS is Not a Website
I believe this message is misleading. A retailer’s interest in this simplicity can hurt the store. What starts as a theoretically good idea to simply combine a POS and website into a single system soon becomes a painful nightmare. Bare bone products are put into the POS and output on the website, filling the website with products that have no picture, no dimension, no description, and no organization. While 10k products can exist in an internal, private POS and not be a problem, they look like a junkyard on a public website. It’s like hanging your laundry on your front lawn. 10k times. 

I believe more wasted time and more pricing errors are not the increased simplicity the store owner expected when they started Shopify. Shopify actually increases complexity.

One System is Actually Several Different, Non-compatible, Mini-sub-contractors
While Shopify is perceived as one entity, it’s an amalgam of thousands of third-party app developers. When one uses Shopify, they are often not using one company but rather thousands of disconnected ones. When one thinks they are combining their POS and website into one system, they are actually using a system with thousands of different developers. Each app developer charges you a different amount each month. Due to reliance on third parties, a store’s monthly bill often snowballs.

I feel Shopify’s business model often produces complexity. Shopify gives retailers a store made by many disconnected developers and a bill that is the sum of charges from many of them. (Have a billing Q? You have to call one of the numerous app developers.)

Shop Local Offers Simplicity
I believe Shop Local’s approach is much simpler. Shop Local gives retailers one platform made and coded by us and one bill from one company (us). If you have a billing Q, there’s just one person to call (us).

Shop Local vs. Shopify: Shopify Costs More in Labor
A retailer may think they would simplify their operations with Shopify, only to spend more time and money. They spend more time on website maintenance and updating products than if the brands maintained it for them (which our Syncing service provides). It’s simpler for Laura May at The Ivy House to have her brands update her products than to do it herself. After all, she sells 180 brands, offering tens of thousands of products, with just three staff members and no dedicated tech person.

Shopify Wastes Labor and Displays Incorrect Prices
Due to the increased labor needed to run a Shopify store, I’ve calculated an indie store spends 11% more by using Shopify vs. Shop Local. In other words, they lose 11% on each sale. Plus, a Shopify store is more likely to display inaccurate prices online—costing the store even more in losses.


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Homework: 
Imagine you're going to build your website on a platform. How much will it cost?
On top of the service provider's flat fee, you'll wish to calculate the the labor one needs to update the site. If you have a retail website, please imagine you wish to offer online 50,000 products. (That's what it takes to compete online.) What labor will that require, and what would the cost of that labor be?
Then please add the flat monthly fee and the labor costs to find the total monthly fee.

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Read The Wall St. Journal article about the new Apple iPhone with USB-C:
https://www.wsj.com/tech/apple-iphone-15-usb-c-eu-malta-4240a5b3?st=ajj2t2qw1nawco2&reflink=mobilewebshare_permalink

Tags:
Iphone wsj European union

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