SHOPPING WITH AMAZON

Canadian tech start-up Shopify saw its stocks spike after a deal with the online giant,

Shares of the Canadian tech start-up Shopify Inc. soared in value on Thursday, following news that it has been chosen to take over providing e-commerce services to businesses on Amazon.com.

Shopify’s stock rose $9.16 to close at $47.25, an increase of 24 per cent. It debuted as a public company in May at $17 (U.S.) a share.

“In terms of them selecting Shopify we think that’s a huge endorsement of how great our product is and that’s kind of why this thing is so exciting for us,” said Harley Finkelstein, Shopify’s chief platform officer.

“We’re really excited to work with them. They’re a company that really cares about small businesses, like we are.”

The Ottawa-based firm sells software that allows small businesses to operate easily and economically on e-commerce platforms. Founded in 2006, it has more than 175,000 clients.

The majority of Shopify’s merchants are small- and medium-sized businesses, but it also provides services for larger businesses including the Los Angeles Lakers, the New York Stock Exchange and Budweiser.

Amazon is closing its own, similar, Webstore service and is offering businesses who switch to Shopify a one-month free trial.

Shopify’s existing merchants will be able to use Amazon’s payment system and warehouses. They will eventually have access to the Amazon marketplace.

Shopify already has similar arrangements with Pinterest, Facebook and Twitter.

“We believe the future of retail is retail everywhere. We want to be the place for merchants to sell wherever they want,” Finkelstein said.

Toronto-based retailer Zane Aburaneh says he could not have afforded the kind of e-commerce presence his store has if it weren’t for Shopify.

His online venture was so successful that he has since opened two bricks-and-mortar locations, on Queen St. W. and in Yorkville.

“My concern, if the power of Amazon becomes so huge that they keep eating up digital spaces — will they get lost and will I have to pay a higher commission,” Aburaneh said.

“Not now, but five years down the line, 10 years, does everything become available on Amazon? Where does it become unique and special? I am really curious to see how this translates.”