Shopify rolled back a lifeline it extended to app developers during the pandemic

Shopify changed a part of its revenue share agreement that it had introduced in 2021.Bennett Raglin/Getty ImagesShopify made a change to its revenue share agreement for app developers.Developers lamented the change as it affects their budgets for next year.Shopify's App Store has more than 16,000 apps geared towards e-commerce merchants.Shopify will sunset a revenue share exemption it has offered to upstart developers in its app ecosystem since 2021. App developers said the sudden change would force them to re-evaluate their budgets for 2026.Previously, the first $1 million that app developers earned each year was exempt from Shopify's revenue share. After that initial $1 million, Shopify would take a 15% cut of developers' revenue.But as of June 16, the $1 million threshold applies on a lifetime basis and does not reset each year. Any revenue earned before January 1, 2025, will not count toward the $1 million lifetime total. Shopify's take of developer revenue will remain at 15%.Shopify announced the change Wednesday in an email to developers and in a post on its developer changelog."During the pandemic, we lowered our revshare to help small developers and introduced an exemption on the first $1M earned each year," it said in the announcement. "Our ecosystem is stronger than ever—merchants have more than 16,000 apps to choose from, and we paid out more than $1B to developers last year."The company added that the additional revenue it will collect due to the change would go to "fund tools, infrastructure, and innovation that benefit developers at every stage." It listed a series of technical updates it has already made to improve the developer experience over the last two years.A Shopify representative declined to comment further to Business Insider.Andy Cloyd, cofounder and CEO of influencer marketing startup Superfiliate, told BI that the previous revenue share agreement meant that developers who were earning more than $1 million a year essentially had an extra $150,000 in their budgets. He said his company would have to adjust some of its plans for 2026."It'll have to be accounted for somewhere, so first things to be cut will be team travel, events, and sponsorships as it's the most discretionary of our spend," Cloyd said.Superfiliate works primarily with Shopify merchants, but it has a new offering that allows it to work with Meta advertisers and TikTok Shop sellers as well."This change doesn't necessarily make us divert resources towards those ecosystems, but it definitely takes away flexibility in that 'exploratory' budget to go try different things," Cloyd said.Developers posting on LinkedIn and X lamented the policy change, especially given that many merchants are looking to cut costs amid tariffs and ongoing economic uncertainty.Jeremiah Prummer is the CEO of two software companies building in the Shopify ecosystem: KnoCommerce and Stamped. He told BI the change won't hurt his businesses too much, but the timing could have been better."Anybody who's building on the Shopify ecosystem is struggling with losing business because of tariffs — or if not losing business, actively cutting costs for our customers," Prummer said. "Ultimately, our customers are the ones that are affected by tariffs, and it's Shopify's customers too."It's unclear whether developers will have to raise the prices of their apps and services to account for the change. However, most said they would continue to build for the Shopify platform."When you're in the position Shopify is in, there's a lot of leeway because they've built so much value in this ecosystem over time that they can make moves like this and you still want to be a part of it," Prummer said.Shopify's App Store is populated with thousands of apps helping merchants with functions like marketing, order fulfillment, customer support, and more. The Canadian e-commerce giant has made itself an appealing platform for developers to build on. Its revenue share is relatively low compared to other platforms like Apple, which charges developers 15-30% of revenue. Shopify has even invested in many leading apps in its App Store. The number of Shopify-focused apps grew enormously as e-commerce sales exploded during the pandemic.Have a tip? Contact this reporter via email at [email protected] or Signal at @mlstone.04. Use a personal email address and a nonwork device; here's our guide to sharing information securely.Read the original article on Business Insider

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