Shopify is best use case for $0 to $1M ish, depending on product line, how many transactions that makes up, and if their are some custom things that are not possible on Shopify that realistically lead to huge gains that would cover more costs of a custom solution with something like magento.
I recommend Shopify to everyone starting out. That's what we used at Diamond Candles up until about a $5M run rate. We were/are growing quickly so we hit a point where payoff of customizing checkout flow, add of social sign on, etc. that could not be done because of Shopify, would cover and surpass costs of a more custom option.
Best to think about this simplistic example.
View the ecom platform market in about 3 buckets.
1. Starting out: $0-$1M ish
2. Wow looks like you have a business: $1M-$20 or 50ish
3. You are/could be publicly traded: $50M+
Take a look at usage #'s for market share size from independent third party analytics tools from Builtwith:
Just because something is found on the web more isn't the full picture. Ie. I could make a blogging platform and have a bunch of scripts and bots install it on millions of domains and I would have majority of the market for blogging platforms (ya that would take a while and isn't a realistic scenario but you can get the point).
Providers dominating the different categories by companies in those areas actually doing volume and being succsessful?
1. Shopify, BigCommerce, Volusion, Magento GO,
2. Magento (varying editions), Yahoo Stores, Symphony Commerce
3. Demand Ware, GSI Commerce, Magento (varying editions)
At the end of the day a good illustration goes like this.
A truck and a moped are two different things. A truck is not trying to out 'moped' a moped and a moped not trying to out 'truck' a truck. They are both perfectly suited to different applications, situations, needs, and circumstances. The same goes with who you choose to handle your ecom platform.
For 2-3 search for internet retailers first 500 and second 500 lists. Pull off all ecommerce companies doing between $10-$50M as an example. Use the builtwith.com chrome toolbar to tell you what platform they are using. Hire someone for $2 an hour via odesk to make a spreadsheet of everything and the make a pretty little pie chart. Now you know what each revenue volume level chooses as 1, 2, 3 preferred platforms.
Option 3 as a side note but very important one, is primarily a platform and commerce as a service model with companies like Demand Ware and GSI Commerce leading the market with platform and services including but not limited to customer service for the brand, fulfillment, marketing services, website product photography etc. Their pricing models are based on gross revenue share. ie. SportsAuthority.com does $100M online this year, GSI takes 30% of that to cover everything.
(I am not sure who Sports Authority uses, just an example)
You can almost pick any traditional brick and mortar retailer and if they have a website where they sell things, they all do, GSI or DW are the people behind the scenes running the call centers, shipping etc.
Diamond Candles, my company, who started on Shopify decided to not go with a the market dominating option of Magento for a few reasons. One of which being upfront cost for an agency or on staff magento CTO type. We decided to partner with a newer entrant, Symphony Commerce, which blends the 3rd category model of platform plus service.
Rev. cut is significantly smaller than providers in category 3, but still get benefits of volume savings on shipping volume, scalable customer support that can handle rapid growth and occasional spikes without us having to worry about scaling or implementing best practices, and a fully customizable platform as a service so to speak that doesn't require us to have in house tech but where we are essentially renting part time ecommerce engineers from with resumes that list Google, FB, Twitter, Magento, Amazon, etc.
So in summary. If you are <$1M in revenue just roll with Shopify. Greater than that but less than $50M ish then I would recommend looking into Symphony.
If Symphony is interested in letting you in then you won't have to incur the upfront costs of an agency or implementation and you will have an ongoing partner equally incentivized i your long term success financially which I prefer as opposed to an agency model which economically is incentivized to offer a one time finished product and their revenue is not tied to my financial success.
It is the closest thing to an equity partner while returning our full equity.
Honestly depends on where you want to be in the next 5 years and if you want to keep paying monthly for a system along with how much customization you want.
Hosted solutions you are limited to the features and plugins they offer you. When I say hosted solutions I mean Shopify, bigcommerce, magento go, Volusion.
Personally for all of our e-commerce clients we use Magento Community or Enterprise edition. The advantages of this are they own the site once it's down. The hosted solutions you're paying for space on their server but if you every want to leave you have to start all over on a new system. Magento is a very popular system and is owned by Ebay. http://www.x.com/
This is part of a blog post that I wrote but have not punished yet because it still needs some editing.
What about the hosted solutions Volusion, Big Commerce, Magento Go, etc?
While can build sites for Magento Go and Big Commerce we still like using Magento Community and Enterprise editions over any hosted solution. Main reason is with those platforms you don't have access to the code and you cannot make custom modifications. Also, their extensions, plugins, mods community is not as large. Here is a real life example...Most of my customers want their product SKU number to be displayed on the product and category pages. Since it is just PHP code I can just place the code where it needs to go and it will display. I have not found a way to do this on Magneto Go or Big Commerce. The bottom line is those systems are hosted solutions and you physically do not own the site just the content on it. With Magento CE or EE you own the site. The site is 100% yours and you can do whatever or move it to whomever you want. There are no limitations (except Magento does own the code to their software).
It comes down to what you want to do and where you want to be in 5 years. Do you want to own your site or pay a monthly fee along with do you want custom add-ons. Magento has a huge list of addons you can add to your site simple stuff like social media logins for facebook and twitter. Possibilities are pretty endless with Magento unlike the hosted solutions that give you what they want to give you.
I honestly have tried both and have to say both of them are equally as good. It boils down to personal preference. In the past few months I have helped a few friends set up their shopping carts and went with Shopify because their Affiliate commission.
If you do decide to go with Shopify be sure to check out their 4th Build a business competition http://www.youtube.com/watch?v=zZciwQ6ZlsY
I've been using Shopify for four years, and love it. I tried a few others systems, and all had their shortcomings.
After 4 years of running an ecommerce business, I would say the platform is one of the easier decisions you will make. Be focused on traffic and building a page that converts.