Shopify Pricing Review
4.5 out of 5 stars
Picking the right ecommerce builder can be confusing, especially when trying to navigate hidden fees for transactions or credit card rates.
In this Shopify prices review, we’ll investigate commonly misunderstood concept of transaction fees, how you can remove them, and how you can save on credit card fees.
Last Updated on June 11, 2020
Let’s be honest, we all want a good deal by getting the most out of purchases while paying the least possible. Times are tough and every dollar counts.
But when it comes to picking a tool to build your business, pricing consideration is just one factor out of many, and I’d argue that this factor should not be the most important one. After all, what will help you reach your goals — automatically opting for the cheapest tools around, or selecting the best tools available, even if they cost more per month?
Shopify offers three pricing plans:
- Shopify Basic costs $29 per month, with 2.9% + 30¢ per online transaction.
- The main Shopify plan costs $79 per month, with 2.6% + 30¢ per transaction.
- Advanced Shopify costs $299 per month, with 2.4% + 30¢ per transaction.
The fully hosted Shopify Plus platform starts at $2,000 per month, and Shopify Lite costs $9 per month.
During our internal testing, Shopify earned a 3.5/5 stars in our “value for money” category. Granted, Shopify is not the cheapest ecommerce builder in the market. But in my view, it is one of the best and it’s getting better every year.
Shopify Updates: June 2020
Shopify recently announced some exciting updates — here are just five of the highlights we thought you might want to hear about:
- New tipping feature! Merchants can enable tipping during checkout, or customize the text to ask for donations to your business or favorite charity.
- Gift cards are now available on all plans (limited time only).
- Shopify POS Pro: free until October 2020.
- Shopify Email is free until October 2020. There’ll be a free plan after this offer finishes in October so you can continue using it.
- Shopify Balance (coming later this year). Shopify’s new account for small businesses — pay bills, track expenses, and apply for funding from your Shopify admin. You also get a Shopify card, which comes with a rewards program tailored to merchants’ needs.
There are three main Shopify pricing plans to choose from. You have Basic Shopify at $29 per month, Shopify at $79 per month, and Advanced Shopify at $299 per month.
Shopify Plans Comparison
The different plans bring with them different features and abilities. Here’s the rundown on exactly what each plan offers.
|Features||Basic Shopify||Shopify||Advanced Shopify|
|Online Credit Card Rates||2.9% + $0.30||2.6% + $0.30||2.4% + $0.30|
|In-Person Credit Card Rates||2.7% + $0||2.5% + $0||2.4% + $0|
|Transaction Fees||Shopify Payments = 0.0%|
Other Processors = 2.0%
|Shopify Payments = 0.0%|
Other Processors = 1.0%
|Shopify Payments = 0.0%|
Other Processors = 0.5%
|No. of Products||Unlimited||Unlimited||Unlimited|
|Abandoned Cart Recovery||No||Yes||Yes|
|Features||Basic Shopify||Shopify||Advanced Shopify|
You can click here to see the actual pricing table on Shopify’s website.
Basic Shopify ($29/month)
Starting a small business, or trying to build an online storefront for an existing one? If your store is tiny, and you just need a little ecommerce functionality, this is the plan for you. But if your products are expensive or you sell a lot of them, that pricey 2.9% + 30¢ transaction fee will add up fast.
If your small business is growing rapidly, you’ll need a robust website. This plan includes more granular reporting data and features like gift cards and abandoned cart recovery.
A small business might not miss these features, but the bigger you grow, the more revenue you’ll add. If your site currently returns around $5000 in monthly revenue, then this is the plan for you.
Advanced Shopify ($299/month)
A medium to large online business can always grow more. If your goal is to grow ten times larger, this plan comes with stellar shipping, rock-bottom transaction fees, and even more advanced reporting.
This option is designed for companies with monthly revenues in excess of $10,000. Sure, it’s pricey, but the businesses using this plan can recoup some or all of the monthly cost thanks to the additional features and lower fees.
Besides the obvious monthly pricing differences, here are a few other differences you should pay attention to as well:
- Credit Card Rates – decreases marginally for higher plans
- Transaction Fees – decreases significantly for higher plans
- Abandoned Cart Recovery – very useful tool to help you earn more profits automatically. Detailed discussion here.
Now that you’ve compared your options, feel free to click the button below and start testing out the plan that’s best for you!
One thing you should note is that on Shopify’s pricing page, the monthly price for each plan assumes you pay on a month-to-month plan.
What this means is that if you decide to cancel, you just stop paying. Period.
If you decide to go on the 1-year or 2-year plans, you save 10% or 20%, respectively.
Shopify Prices: Monthly vs Annual Costs
|Shopify Pricing Plans||Shopify Basic||Shopify||Advanced Shopify|
All too often, businesses fall into the trap of settling into a month-by-month plan, and not really giving it much thought. Granted, with a month-by-month plan, you’ve got a lot of flexibility. But when you consider that you can save up to $1,435.20 over two years by signing up in advance, it pays to be a little more forward-thinking.
Shopify had the highest customer score of any ecommerce platform in our user testing. And remember, you’ve still got a 14-day free trial to test it out first.
If the pricing for Shopify’s three plans won’t work for you, don’t despair. Shopify has a super inexpensive option and an enterprise-level one — even if neither one gives you a website, exactly. Here’s what these plans offer.
The Shopify Lite plan won’t give you a complete online store. Instead, it integrates with a pre-existing website or social media page, letting you chat with customers, accept credit cards, and create invoices.
This option is great for a hobbiest who already has an established corner of the internet, and no plans to expand. It costs just $9/month.
The plan is aimed at operations with $1 million or more in annual revenue, and costs $2,000 or more per month. To get a custom quote for Shopify Plus (not listed on the table above), you have to speak to Shopify directly.
On Shopify’s pricing table, the Credit Card Rates sections relate to the rates you get charged if you decide to use Shopify Payments to handle your payment processing.
When you use a credit card to purchase online or offline, there is a fee that you will pay no matter what – a payment processing fee.
When you go to your local grocery store to purchase something with your credit card, the grocery store pays a processing fee to their payment processor to collect payment from your bank and deposit it into their bank. That’s just how the world of commerce works. All merchants pay this fee.
That said, the only thing you can control are the credit card rates and that is determined by which payment processor you choose to use.
With Shopify Payments, their credit card rates / payment processing rates for online transactions are as follows:
These fees are on a per transaction basis, not on a per-item sold basis. So if someone buys 10 widgets from you in one single transaction, the 30 cents is charged only once and not on each item.
(Note: If you sell products in-person using Shopify’s Point-of-Sale system, the credit card rates are lower)
Shopify Payments is currently available to stores in the United States, Puerto Rico, Canada, the United Kingdom, Ireland, Australia, New Zealand, Hong Kong, and Singapore.
If you’re not located in these countries, Shopify is fully integrated with over 70 different payment processors to accept credit cards from all over the world. You can see their list of payment processors here.
Shopify Payments Guide – If you’re looking for more information about Shopify payments, check out our further discussion.
I see complaints about Shopify’s transaction fees quite often, usually from merchants concerned about the impact on their profits.
Basic Shopify charges 2.9% + $0.30 per transaction, while Advanced Shopify drops just half a percentage point to 2.4% + $0.30.
But Shopify’s transaction fees aren’t your only option, and this Q&A should throw some light on the alternatives.
Of course, nobody likes to pay more fees especially if you don’t think it’s necessary. However, I feel that the concept of Shopify’s transaction fee is commonly misunderstood.
Let’s spend a few minutes investigating why transaction fees exist on top of monthly plan fees, if it’s unique to Shopify (or if they’re just a bunch of greedy people), and what you can do.
How do transaction fees work?
Each time a customer purchases from you (a transaction), depending on which Shopify plan you subscribed to, a transaction fee will be charged. The fees are 2% for the Basic Shopify plan, 1% for the Shopify plan, and 0.5% for the Advanced Shopify plan.
What are transaction fees for?
When shoppers visit your online store, they browse around before making a decision to purchase. It takes resources for Shopify to power your ecommerce website to ensure that it stays up and doesn’t crash on you.
So the idea is that the transaction fees help Shopify keep your store open and operating at optimal levels, no matter how many visitors you have on your website at one given time (10 visitors or a million visitors).
Doesn’t the monthly plan fee cover this already?
Yes and no. The monthly fee mainly gives you access to the Shopify platform and selling tools to get your online store published and working. The transaction fees exist to continually keep your store powered, and is only charged when someone purchases your product.
What about other similar ecommerce builders? Do they charge transaction fees?
Yes, but in different forms.
- For BigCommerce (Shopify’s closest competitor), even though they don’t charge transaction fees for each sale you make, if you generate more than a certain sales dollars per 12 months, they automatically bump you to up to a higher plan so you’ll end up paying more per month. Shopify doesn’t “force” you to upgrade to a higher plan, no matter how much sales you generate per month.
- For Wix (an ideal ecommerce builder for newcomers), you won’t have to pay any transaction charges. However to sell products on Wix, you need to be on either the eCommerce or VIP plan, which are a little bit more expensive per month. Be aware that you will need to pay a percentage per transaction to your payment gateway provider, who each charge their own rate (all payment gateway providers charge this fees).
- For Volusion, they limit the amount of bandwidth you have per month (think of bandwidth also as “power” that keeps your website running. The more shoppers visit your store, the more bandwidth it uses), whereas Shopify gives you unlimited bandwidth. Once you exceed the bandwidth limit with Volusion, you’ll have to purchase additional bandwidth from them (which they don’t list how much it costs, so it’s going to be a nice surprise.)
So transaction fees appear in different forms for ecommerce platforms similar to Shopify.
Is there any way to remove Shopify’s transaction fees?
Yes. If you use Shopify Payments, they’ll remove all transaction fees.
What’s the catch? Assuming if I use Shopify Payments and Shopify removes all transaction fees, how can they keep my ecommerce website powered?
Shopify Payments help you process payments from your customers (collect money from your customer and deposit it into your bank account). This is the credit card fee as discussed in detail above.
If you use Shopify Payments, then Shopify will earn the credit card fees.
This allows them to waive the transaction fees. So instead of paying transaction fees plus credit card fees, you just have to pay credit card fees if you use Shopify Payments. You’d have to pay this regardless even if you use another payment processor (such as PayPal).
Will using Shopify Payments cost me anything more?
No. Shopify will waive transaction fees (saving you money), and the credit card rates are actually lower than payment processors such as PayPal (saving you money). The fee per transaction is fixed, there are no international fees (if you sell to customers outside of your country) and there are no monthly fees.
Is using Shopify Payments going to save me more money compared to using other similar ecommerce builders?
Yes. As discussed, if you use BigCommerce, they force you to upgrade to a higher plan if you exceed certain sales levels. Shopify doesn’t require you to upgrade at all. So theoretically, you can sell $1 million worth of products and you can remain subscribed to Shopify’s lowest plan at $29 per month.
With BigCommerce, you’ll have to upgrade to a higher plan and pay more. If you use Volusion, they limit the amount of bandwidth and if you exceed the limit, you’ll have to purchase more from them.
Shopify gives you unlimited bandwidth.
Are a lot of Shopify users using Shopify Payments?
Yes. According to Shopify, 85% of their users are using Shopify Payments when it is available (for users located in the US, Puerto Rico, Canada, the UK, Ireland, Australia, New Zealand, Hong Kong, and Singapore) as at the end of 2017.
This shouldn’t be surprising at all as users get to save transaction fees, have lower credit card processing fees, and can start receiving funds after 2-days.
When it comes to fees per sales transaction, it’s best to use Shopify Payments. Not only will Shopify waive all transaction fees, the credit card processing fees are also lower than PayPal (and most other payment processors).
It doesn’t cost you anything more to use Shopify Payments as you’ll need a payment processor to handle payments anyway.
Running an ecommerce business comes with a few extra costs beyond the basic website plan. Here are the extra add-ons and charges you might need to consider.
A variety of third-party providers offer apps designed to work with Shopify websites in the online Shopify app store, home to more than over 1,400 apps.
The prices and the functions can vary wildly: One free app lets customers chat with a business directly though the Apple messages app, while another app offers enterprise level product sourcing and supply chain management and charges $299 per month.
Shopify doesn’t offer email hosting itself, but If you own a Shopify domain, you’ll be able to set up free and unlimited email forwarding to the domain from a third-party email hosting service. The extra cost kicks in when you’re paying for that hosting service: typical email hosting charges range from $1 to $5 per month.
You don’t need to pay for those add-ons in order to try the 14-day Shopify free trial! Feel free to click through the link below.
I hope this discussion addresses the more commonly misunderstood aspects of what it costs you per month to use Shopify.
Shopify is one of the best hosted ecommerce builders available in the market today (see our full review here). They’re not the cheapest, but they do offer the best value for money.
They have a very broad range of ecommerce tools, offer you access to their App Store (over 1,400 apps), and an ecosystem of theme designers and experts. Shopify is a very strong and fast-growing online store builder.
If you’re looking for a low-cost ecommerce builder, then Shopify is not the right platform for you (see our ecommerce comparison chart for alternatives).
But, if you’re serious about building a successful online store, Shopify is an excellent platform to help you achieve your goals.
Their plans are not outrageously expensive and are actually quite affordable, giving you the tools and infrastructure to get started. Imagine if you were able to earn $1,000 per month from your business, the $29 per month plan is quite manageable.
Then, if you were to grow your sales to $5,000 per month over time, the monthly cost starts to become negligible.
So, while $29 or $79 per month sounds expensive when you first get started, keep in mind what your business sales goals are over the medium to long-term. If you only want to generate $200 per month, then Shopify is probably not for you.
But if you want to generate thousands of dollars per month over time, Shopify is a strong platform to help you do just that.
You might need a business license for a business operated on a Shopify website, but it depends on your state or city’s policy. If your state uses sales tax, however, you’ll likely need to get a resellers sales tax certificate, which typically requires an application and a nominal fee.
No, Shopify does not charge a transaction fee for a fully refunded transaction. Shopify automatically removes the charge or, if it has already billed you, will issue you a credit on your next invoice.
However, if a purchase has only been partially refunded, Shopify does still allow the original transaction fee to remain.
Shopify doesn’t have any hidden fees: You’ll pay for your specific plan, and then you’ll pay an additional transaction fee for every transaction made on your store. While you can also buy any additional apps or domain names you want, you shouldn’t be surprised by anything on your invoice.
Yes. You can either purchase a domain name within Shopify, or use your own existing domain. Shopify does provide a free myshopify.com domain name to each online store when you sign up, but that doesn’t look too professional.
Yes, Shopify offers a 10% discount when you sign up for one year, and a 20% discount when you sign up for two years. Both subscriptions need to be paid up front, too.
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