43 Pros & Cons Of Starting A Shopify App (2024)

Updated: January 18th, 2023
Create A Shopify App

Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.

Trying to understand the pros and cons of starting a shopify app?

Here are all of the pros and cons of selling shopify app online:

Learn more about starting a shopify app:

Where to start?

-> How to start a shopify app?
-> How much does it cost to start a shopify app?

Need inspiration?

-> Other shopify app success stories
-> Examples of established shopify app
-> Marketing ideas for a shopify app

Other resources

-> Shopify app tips

Pros Of A Shopify App

Pros Description

Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

Ability to start your business from home

It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!

Meaningful business connections

You never know who you will meet as a shopify app. This could be the start of an incredible business opportunity!

High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

Gain exposure and experience

This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you!

Unlimited income potential

With createing a shopify app there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.

Predictable income stream

Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!

Higher likelihood of getting referrals

This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.

More convenient user experience using an app

The smartphone market is continually growing, and many consumers prefer to use an app over a website. Bonus points if your app is accessible to users without WiFi!

You can generate revenue through your app!

Although it can be pricey to develop an app, there are various different ways to generate revenue. You can make it so that customers pay a small fee to download your app and you can generate revenue through ads + sponsors.

App store allows you to reach a wide audience

If your app is listed in the app store, you are easily accessible to users that frequently visit the app store. App store listings also show as separate entries on Google’s search rankings, which allows for more users to see your business!

Simple business model

A shopify app has the advantage of a simple business model, which makes launching and building the business more seamless.

Greater Income Potential

With this business, the sky is the limit in regards to your income potential.

You get to do something you truly love

With starting a shopify app, you get to put your energy into something you are truly passionate about! You'll find yourself devoting as much time and energy as possible into the business to make it successful.

You can work from anywhere!

Not only can you start your shopify app from home, you can also run your business from anywhere in the world. This is the entrepreneur dream.

Strong Demand & Relatively Recession Proof

The demand for shopify app is increasing year over year and the business is known to be relatively recession proof.

You get to inspire others

Your business is one that encourages and inspires others, which in itself, can be very fulfilling.

Ecommerce retail is growing fast

Ecommerce has been grown rapidly over the years and is expected to hit a total of 4.9 trillion dollars by 2021.

With running an ecommerce business, you provide your customers with alternative and more convenient shopping experience, which will ultimately drive sales.

You establish yourself as an expert

With createing a shopify app, you establish yourself as an expert in your niche, which builds your credibility. In return, customers are more likely to trust you and refer you to other friends and family.

Can build solid foundation of clients

It's unlikely you will have one-off customers as a shopify app. Typically, you have a solid foundation of clients that use your product and services regularly.

Make money while you sleep

The advantage of starting a shopify app is that you have the ability to have passive income and make money while you sleep. This is the dream for many entrepreneurs.

Low maintenance customers

In this industry, customers are known to be very appreciative and low maintenance. This can help with your stress levels and allow you to focus on growing your business.

Results and revenue happen quickly!

Unlike other businesses, it can be relatively quick to start seeing results and revenue. As long as you follow all the steps to validate your idea before launch, you are likely to see quick results and ROI.

Cons Of A Shopify App

Cons Description

Motivation of employees

If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.

Longer Sales Process

A shopify app can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.

Low margins

The gross margins for your shopify app are typically around 45%, which can make it more challenging to incur new expenses and maintain profitability.

High employee turnover

In the shopify app, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.

Taxes

As a shopify app, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

High overhead expenses

With createing a shopify app, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Churn

In this business, customers can cancel their membership or subscription for your services - which can make revenue forecasting challenging and unpredictable. It's important to focus on your churn rates and trends so that you can prevent this as much as possible.

Time commitment

With createing a shopify app, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.

Difficult to build trust with your customer

With createing a shopify app, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Complex development process.

The development process for a shopify app can be quite complex, which may cause delays and challenges when launching and growing your product.

Profit-sharing with the app store

If you are using your app to drive revenue, either through paid downloads or through purchases of your services through the app, then be aware that app stores get a substantial cut (around 30%) of revenue on top of sales tax!

Complex maintenance

Your shopify app will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times.

Impatient customers

You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.

You might struggle financially (at first)!

If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.

Difficult to scale

With a shopify app, it can be challenging to find ways to scale. Check out this article that discusses scaling your business and the challenges that come with it.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

Equipment Breakdowns

Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.

Technical issues can be frustrating

Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.

More challenging to earn passive income

It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.