It all started with the purchase of eggs, cornflakes and margarine… now it's a multi-trillion-dollar industry.

It was 1984 and Jane Snowball, crippled by a broken hip, needed to buy these staples for her pantry, but hampered by her bum hip it made it difficult to get to and from the grocery store. So instead of making the roundtrip, she sat in her living room and with a few clicks on a television remote, aimed at a device called Videotex, she was able to connect to her local Tesco supermarket and order the items, which were then delivered to her doorstep.

Little did she know that she made history by becoming the first online shopper, kicking off a revolution that's become the norm today. An industry that's in the midst of explosive growth, and showing no signs of slowing down…

Online shopping in the United States, alone, as increased from $5 billion in 1998 to more than $340 billion today. That doesn't even scratch the surface when looking at the industry on a global scale.

It's estimated that retail e-commerce sales around the world will double between 2018 and 2023, surpassing $6.5 trillion in 2023. Ecommerce sales account for nearly 14% of retail sales worldwide and expected to account for nearly 18% of global retail sales by 2021.

This massive shift in the way people buy things has created enormous wealth for millions of people.

Of course, everybody knows that Amazon (Nasdaq: AMZN) has benefited greatly -- and captured -- much of this market. Often at the expense of big box stores like Borders and Circuit City.

Amazon has grown into an ecommerce behemoth, and longtime shareholders have been handsomely rewarded over the years.
In fact, Amazon has become so wealthy, innovative and effective that companies shudder at any rumor of Amazon entering their industry. It's happened to auto parts companies and, more recently, pharmaceutical companies like CVS Health (NYSE: CVS).

Despite its dominance, there's one company that Amazon surrendered to.

A firm that provides entrepreneurs an easy platform to build out their brands and begin selling their products online. Amazon went as far as closing its division that competed with this firm, and instead simply referred folks to this new platform.

Some of you might remember the Amazon Webstore that launched in 2010. The purpose was to make it simple for retailers and manufacturers to build and operate a world-class e-commerce business tailored to their brand and customers. They could leverage Amazon's technology and infrastructure.

But the Amazon Webstore never took off like management expected, and they stopped accepting new vendors in 2015. Instead, Amazon referred prospects to a new platform built by two avid snowboarders called Shopify, Inc. (Nasdaq: SHOP).

Shopify makes it easy to start an online business. Its cloud-based, multi-channel commerce platform allows small and medium-sized businesses to easily set up an online storefront with retail functionality.

The company builds websites for businesses to attract customers, process orders, ship products, collect credit-card payments and track and manage inventory. It also enables sales from other channels like physical storefronts, smartphones and tablets, as well as social media sites like Facebook and Pinterest. Its software gives merchants a single view of their business and customers across all these channels in one integrated product.

Since its founding in 2006, Shopify has been on a tear… in all facets of its business.

Sales topped $1 billion in 2018, a stark contrast to the $50 million it pulled in just five years ago. That means SHOP has grown sales at a compounded average growth rate of 85% over the last five years. And it's showing no signs of slowing down. It's on track to top $1.5 billion in sales this year, which would represent a year-over-year increase of roughly 44%.

To help support this hypergrowth, the company has invested heavily into their business. Hiring employees at a rapid pace and making large investments in Europe and China. Those investments are already paying dividends, as it continues to attract more and more customers.

At the end of 2018, it had more than 820,000 merchants from roughly 175 countries using its platform. One Baird analyst estimates that the company could top one million merchants by year end.

When companies are in growth mode, like Shopify is, the focus in on top-line growth, not net income. Think back to Amazon, it took them 14 years to turn a profit!

Despite posting an accounting loss of about $65 million last year, it managed to generate $9.3 million in cash profits -- a figure that more closely identifies whether the company is profitable and healthy.

More impressive is that in the first six months of this year, it has already churned out more than $47 million in cash profits. Meanwhile, it's kept a pristine balance sheet. In its most recent quarter, the company reported that it had more than $2 billion in cash on hand and only $115 million in total debt. In other words, the company is in strong financial shape to fuel its rapid growth.

There's a lot to like about this company.

Its business model allows it to be easily scalable, which means that its astronomical revenue growth rate will eventually filter down to the bottom line, making this a highly profitable business. Plus, it's not seeing the fallout from the trade war with China like many other companies are.

As Shopify continues to acquire new merchants it will likely pass eBay (Nasdaq: EBAY) to become the second largest e-commerce platform in the United State in terms of sales volume (second only to Amazon).

Shopify has carved out a niche by providing a premium service in the trillion-dollar ecommerce industry… and it's here to stay. Don't be surprised if it extends its streak of 14 consecutive earnings beats in the upcoming earnings season.

As you can imagine, a tech company growing at neck-break speeds like SHOP has seen a massive upside move in shares. But recently, we had a pullback the pullback I had been waiting for…

This is the first time this year we’ve had the opportunity to scoop up shares near its 100-day moving average. Now is the time to strike…

Roger Scott