Shopify fees - which plan is best for your business?
If you’re thinking of using Shopify to sell goods online, you’ll know that there are several different pricing plans to choose from…and you may be wondering which one is the right one for your business. So in this post we’re going to look at Shopify fees in depth, going through each of the available plans and highlighting the aspects that might make one plan better than another - or more suited to your business.
Shopify fees: an overview
There are five Shopify plans available:
- 'Shopify Lite' - $9 per month
- 'Basic Shopify' - $29 per month
- 'Shopify' - $79 per month
- 'Advanced Shopify' - $299 per month
- 'Shopify Plus' - negotiable
You can reduce your Shopify fees by paying upfront: 10% and 20% discounts are available if you pay for one year or two years of service respectively, instead of paying on a monthly basis.
At $9 per month 'Shopify Lite' represents one of the cheapest ways into selling products online - but technically it doesn’t provide you with a standalone, fully-functional online store. Rather, it allows you to
- showcase your products on an existing website
- sell on Facebook
- use Shopify as a back-end system for selling products in physical locations (market stalls, gigs, events etc.)
Embedding your products on another website
With 'Shopify Lite', you get a ‘buy button’ - this works in a similar (and arguably better) way to Paypal, in that you add a snippet of code to your website and your product’s details (photo, price, description etc.) along with an option to buy that product, appear on your website. This is ideal for anyone with a Wordpress or Squarespace site that wants to add simple e-commerce functionality (Squarespace provides e-commerce functionality but it doesn’t work with Paypal - this is a good workaround).
Selling on Facebook with Shopify Lite
If you are only interested in selling on Facebook, and aren’t bothered with creating a standalone store, then 'Shopify Lite' is a potentially good option - with a couple of clicks of a mouse you can publish all your products to your Facebook page, on a dedicated ‘Shop’ page.
I say ‘potentially’ however because I’ve found Shopify’s Facebook integration a bit frustrating. As things stand it seems that users browsing your store can only buy one item at a time. For most businesses, this is annoying - but for some businesses it will render the Facebook store pretty useless.
An example of such a business is my cousin’s Dublin wedding invitation store, which I built in Shopify - all her sales involve people buying large quantities of wedding invitations at once. She tried the Facebook integration, but it was of no use, because customers could only buy one invitation at a time with it - a tortuous process if you’ve got 100 guests coming to your wedding.
The Facebook integration is currently of more use to the likes of bands who wish to sell the occasional album to their fans without them having to leave the Facebook environment, or businesses with customers that are unlikely to make multiple purchases at once (I’m thinking the likes of florists; jewellery stores etc.).
Using Shopify as a backend system for a physical store
'Shopify Lite' is a good option for those who sell in physical locations and need a solution for processing payments and manage their inventory. It allows you to accept credit card payments in person using a card reader; and you can also avail of other useful point-of-sale hardware items such as receipt printers, cash drawers and barcode scanners.
Every time you make a sale, Shopify will take a note of this and update your inventory accordingly, meaning you’re unlikely to run out of stock when you need it most. This syncing of real-world sales to an online selling platform also makes bookkeeping / accounting a bit easier.
Transaction fees and credit card fees
It’s important with all Shopify plans to be aware of the difference between transaction fees and credit card fees.
Transaction fees are charged by the company providing your online store, and credit card fees are charged by your payment gateway provider (a payment gateway is basically the software used to process credit card payments).
There are no transaction fees to worry about with 'Shopify Lite', so long as you are prepared to use Shopify Payments (powered by Stripe) as the payment gateway. If you use a third party payment gateway, you can expect to pay a 2.0% transaction fee on each sale, plus whatever your credit card fees your payment gateway provider charges.
Using Shopify Payments, credit card fees are 2.2% + 30c if a purchase is made online (for example, using a Shopify Buy button) and 2.7% + 0c if a purchase is made using the Shopify point of sale card reader and a mobile device.
Is 'Shopify Lite' for me?
Shopify Lite is best suited to merchants who
- want to add e-commerce functionality to an existing website
- wish to sell on Facebook (and have very simple requirements on that front)
- want a platform to process payments and manage inventory when selling at markets or events
‘Basic Shopify’, at $29 per month, is the cheapest option that Shopify provides which enables you to create a fully functional, standalone online store. You get all the ‘embeddable’ and ‘sell-in-person’ functionality that comes with Shopify Lite, but importantly, you get a website too.
In addition to providing you with a fully functional online store / site, the main additions that a 'Basic Shopify' plan brings to the party by comparison to the ‘Lite’ offering are templates, phone support and a blog.
With 'Basic Shopify', you can choose from a wide range of templates for your online store - there are several free ones, and over 130 paid themes. I’ve always found the free themes to be perfectly usable (and you can tweak them quite extensively by adding CSS and HTML), but if you fancy a paid theme, they cost between $100 and $130.
Although support is included with Shopify Lite, it is limited to email and chat only. ‘Basic Shopify’ provides you with phone support too.
If you’re serious about selling products online, you really need to blog; it’s a core part of any decent inbound marketing strategy. 'Basic Shopify' provides you with a blog that you can use to attract traffic to your store by publishing relevant keyword-rich content.
When it comes to transaction fees, they are the same as 'Shopify Lite'.
Is Basic Shopify for me?
'Basic Shopify' is good for merchants who
- have a fairly limited budget but need a well-specced standalone online store
- do not need advanced selling or reporting functionality (more on that below)
- want to use blogging as a means of attracting inbound traffic.
The next plan to consider is simply called ‘Shopify’ and the fee for this is $79 per month. The key additions that the Shopify plan brings over Shopify Basic are:
Gift cards allow your customers to purchase a gift for someone from your store, whilst leaving the actual product selection up to the recipient.
With 'Basic Shopify', you’re more or less limited to being able to view quite simple sales reports. Upgrading to the 'Shopify' plan however gives you access to a wider range of detailed summaries, including
Abandoned cart recovery
The inclusion of abandoned cart recovery in the 'Shopify' plan is possibly the strongest incentive for choosing it over 'Basic Shopify'.
Abandoned cart recovery allows you to automatically send an email to site visitors who add a product to their cart, get to the checkout and then leave your store without completing the purchase. This can significantly increase your revenue with little effort – other than the 'one-off' time investment in setting up the automated messages – being involved.
Lower transaction fees
The ‘Shopify’ plan brings with it lower transaction fees than both the ‘Basic Shopify’ and ‘Shopify Lite’ plans, along with lower fees for using an external payment gateway.
Using Shopify Payments, you will avoid transaction fees - and in terms of credit card fees can expect to pay 1.9%+30c for online transactions and 2.2%+0c for point-of-sale transactions. If using an external payment gateway, the fee applied by Shopify is 1%.
Is ‘Shopify’ for me?
The 'Shopify' plan is good for merchants who
- have a high volume of online sales (or expect them): if the sales levels are high enough, the lower transaction fees will offset the higher monthly cost
- require more in-depth reporting
- want to make the most of abandoned checkout recovery
- sell products for which there is often a demand for gift cards
With ‘Advanced Shopify’, you get two additional features that are not included with the plans discussed above - advanced report building and real time carrier shipping.
Advanced report building
The ‘Advanced Shopify’ plan effectively allows you to manipulate your Shopify data more easily, and create your own reports. You can select various dimensions and metrics and use them to create bespoke reports which you can save and refer to in future. You can also apply a multitude of filters to your data to get a view that suits your business activities. (Users of Google Analytics will be familiar with this sort of thing)
In short, this functionality is for vendors who really want to drill down into their sales data with a view to tweaking their sales processes / operations to the nth degree. As such, it’s most useful for merchants who are selling a lot of products (as doing so will provide a significant enough amount of data to make the advanced report options worth using.
Real-time carrier shipping
If you intend to use Shopify with a carrier to ship your products (Fedex, UPS etc.), then you are effectively going to have to use the Shopify Advanced plan (or Shopify Plus, more on which below).
With Shopify’s real-time carrier shipping option, shipping costs are calculated automatically by a carrier at the exact time an order is placed. You can edit Shopify’s settings to mark these up (i.e., add a handling fee) or down (to compensate for a shipping rate which you feel may dissuade customers from completing a purchase).
Of the four Shopify plans aimed at SMEs, Advanced Shopify offers the lowest transaction fees: using Shopify Payments, there are no transaction fees, and the credit card fee is 1.6% + 30c for online transactions, and 1.6% + 0c for point of sale ones. Using an external payment gateway costs 0.5% in transaction fees, plus whatever the payment gateway charges you.
Is ‘Advanced Shopify’ for me?
The 'Advanced Shopify' plan is good for merchants who
- have a very high volume of online sales (or expect them): as with the ‘Shopify’ plan, if your sales levels are high enough, the lower transaction fees will offset the higher monthly cost
- require advanced reporting features
- intend to make use of carriers to ship their products.
Finally, there’s the 'Shopify Plus' plan to consider. Unlike the plans discussed above, this is aimed not at SMEs, but at big businesses.
'Shopify Plus' is an enterprise grade solution, offering advanced features involving security, APIs and fulfilment - and it comes with ‘white glove’ account management (dedicated account management and support).
Pricing is negotiable - as the solution that Shopify will offer you is usually tailor-made to your requirements - but generally runs into thousands of dollars per month.
Is Shopify Plus for me?
'Shopify Plus' is for (large) businesses who have
- an extremely high volume of sales
- a need to create very bespoke connections between Shopify and internal systems (CRM tools etc.)
- very particular requirements regarding security and uptime
- a big budget to spend on creating an online store!
More Shopify resources from Style Factory
I hope this breakdown of Shopify fees has helped you get a greater sense of which Shopify plan is most appropriate for your business. There are a range of other Shopify related articles on the Style Factory site - you may find the below links helpful:
For a complete list of our online store builder articles, please see our e-commerce platform reviews section.
Got any thoughts on Shopify fees?
If you’ve got any queries or thoughts on Shopify’s fees, or the product in general, we’d love to hear them. Feel free to add a comment below!