Using Open-Source Software to Disrupt Marketplaces

UPDATE: Openship is going closed-source. I will be considering open-sourcing it once the product has matured. Openship will also be incorporating open-source ethos in other ways.

“Disruption innovation,” a term coined in the mid-90’s, is used to describe a phenomenon where small business owners can build simpler, lower-priced products to take on less agile, established companies who have begun to focus on enterprise sales.

We have been seeing this for decades, but one that intrigues the most is the rise of Shopify against Amazon.

Amazon was one of the earliest places to sell items online in the early 2000s. It provided a dashboard for sellers to handle inventory, returns, customer service, etc. As Amazon grew, they increased seller fees and even started to private label items that 3rd party sellers had established.

Actions like these allowed Shopify to attract users who wanted to own their actionable data and not be locked-in to a single platform. Additionally, Shopify and other startups like Deliverr are building fulfillment systems in hopes to rival Amazon’s FBA program.

This is having a very profound effect: It’s shifting power back to the individual sellers.

Marketplace

As sellers are getting access to a seller dashboard and fulfillment systems, the next step is the marketplace.

The best way to build a seller-focused marketplace would be a system that allowed users to bring their own dashboard, fulfillment system, payment processor, etc. The marketplace would simply push orders to their existing system. It would adapt to you, not the other way around.

That is the goal of Openship.

Openship

Openship is an open-source Shopify application that allows you to connect and manage all your shops’ operations from one dashboard. It allows you to dropship items from AliExpress and Amazon, but also route your orders to your own inventory stores like FBA, ShipBob, or a custom 3PL solution. Dropshipping is a good way to test items before buying in bulk; however, the model is not sustainable in the long-run.

Building a brand and differentiating are the next steps and Openship allows that transition smoothly without being locked-in to any fulfillment service or platform.

Within this platform, we are building a tightly integrated marketplace where users can list their products for others using the platform to source from. This will include one-time orders as well as bulk buying and private labelling.

Since users are bringing their own backends, the marketplace has an industry low seller fee of 4%.

Open-source

If the platform is truly seller-focused, it needs to be extendable and built with the seller in mind. That’s why being open-source made complete sense. Users can integrate their current and future operations, not be locked-in, and run their own instance using their own server or serverless architecture.

Openship will operate as an open core model. It provides a platform and the marketplace is the monetization. This will align our goals with those of our users. Their success will be linked with ours.

You can check out the Github repo:

openshiporg/openship
Operations dashboard for Shopify stores

And docs:

Openship
Openship.org documentation

Future

We believe this business model can be used to disrupt more marketplaces like Airbnb, DoorDash, Uber, Upwork, HotelTonight, etc.

Great open source software will provide users with great UI and functionality while the marketplace will allow them to tap into outside sales.