Arrow-right Camera
The Spokesman-Review Newspaper

The Spokesman-Review Newspaper The Spokesman-Review

Spokane, Washington  Est. May 19, 1883
Partly Cloudy Night 60° Partly Cloudy
News >  Business

Motley Fool: An e-commerce growth story

Wix.com (NYSE: WIX) is a top e-commerce platform helping small businesses around the world unlock online capabilities such as ordering food for delivery, consulting with a professional service via chat or video, purchasing and consuming entertainment, and new product search and discovery.

Wix’s no-code website-building business has had a busy 2021 so far. Early in the year, it said it had surpassed 200 million registered users, a figure that’s still growing.

Wix is now turning its focus to premium features, its fastest-growing segment, which it reports as “Business Solutions.” In its first quarter, revenue generated by this unit accounted for only about one-quarter of the company’s total, but it grew 97% year over year.

A slew of new capabilities have been launched to further bolster this part of Wix’s platform. The company acquired a small gift card and customer reengagement company as well as a supplier marketplace and drop-shipping firm to round out its online selling and order fulfillment offerings. A new point of sale, or POS, system was also unveiled, giving Wix users the ability to accept payments in person. And a new mobile app helps restaurants build their own sites so patrons can browse menus and place orders on the go.

This is a promising tech business with great long-term potential from its hundreds of millions of small business users. (The Motley Fool owns shares of and has recommended Wix.com.)

Ask the Fool

Q: What are “SaaS” companies? – D.K., Fort Myers, Florida

A: The letters stand for “software as a service,” and SaaS companies are those that offer cloud-based software, often to businesses, via subscriptions. So instead of buying and downloading a software package, a customer will pay on an ongoing basis for on-demand access to it. This makes updating easy, and leaves vendors with the responsibility of storing customer data and keeping it safe.

Tax-prep software is an example of SaaS used by many consumers; while it used to be sold in a box, nowadays many people simply access it via a website. Office productivity software is another: Even Microsoft has shifted its dominant Office suite (featuring Word, Excel, Outlook and more) to a subscription model.

Another example is Axon Enterprise: It invites police departments to subscribe to its Evidence.com service, which collects and analyzes footage from body cameras. Veeva Systems, meanwhile, offers a range of cloud-based services to the pharmaceutical industry, such as clinical trial management and customer relationship management.

SaaS companies have a business model attractive to investors, as customers tend to get locked in to regular subscription payments, and it can be a costly hassle for them to switch to an alternate vendor.

Q: What do “bulls” and “bears” refer to in the financial world? – H.R., Sacramento, California

A: They refer to the optimists and pessimists among investors. A “bull” is someone who is “bullish” on an investment, expecting it to perform well, while bears see falling values ahead.

No one really knows how the market (or individual stocks) will perform over the short term, but over the long term, the stock market has always gone up. So we at The Motley Fool are long-term bulls.

My dumbest investment

My dumbest investment – so far! – was filling my portfolio with shares of my employer’s stock. I knew there was risk, since I’d be depending on the same company for not only my salary and benefits, but also my financial future. Still, I thought the stock would maintain its value or go up because I knew the business well.

As the price fell, I still thought the company was strong and it would bounce back. My inaction resulted in a 75% to 80% drop over a long period of time.

The Motley Fool has since provided me with confidence and a better plan for that money. And on a positive note, I have a nice carryforward loss to offset capital gains on my next tax return. – W.G., online

The Fool responds: It’s easy to see why people make this mistake: They know the company they work for better than other companies. Still, even seemingly solid companies can fail.

Consider that there were long periods when few would have expected companies such as Eastman Kodak, Toys R Us, Hertz, Sports Authority and J.C. Penney to struggle and file for bankruptcy protection, or to go out of business.

It’s risky to load up on your employer’s stock. If you buy any, keep it a modest portion of your overall portfolio – perhaps only 10% to 20%.

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Active Person

Subscribe now to get breaking news alerts in your email inbox

Get breaking news delivered to your inbox as it happens.