Shopify Pricing Review
Picking the right ecommerce builder can be confusing, especially when it comes to figuring out how much it really costs.
A lot of people complain about Shopify pricing plans, specifically when it comes to transaction fees and credit card rates.
In this Shopify pricing review, we’ll investigate commonly misunderstood concept of transaction fees, how you can remove them, and how you can save on credit card fees.
Review by Jeremy
Last Updated on June 4, 2018
Shopify currently powers over 500,000 online stores in 175 different countries.
When it comes to their pricing plans, however, reviews are mixed. It really boils down to two separate camps.
Some say it’s well worth the investment and others say the fees are giant rip-offs.
So, what’s the truth? How much does Shopify really cost?
Well, in simple terms, Shopify’s Basic plan is $29 per month, the next plan up is $79 per month, and their Advanced plan is $299 per month.
But how come some people gladly throw money at Shopify and some cringe in disgust?
It’s really not that hard to distinguish these two major groups of people:
- Shopify users who are successfully leveraging off Shopify’s tools to grow their businesses.
- Non-Shopify users who are very price sensitive and enjoy nickel and diming when price shopping for the best (aka lowest) prices.
Let’s be honest, we all want a good deal by getting the most out of purchases while paying the least possible. It’s wise, and there’s nothing wrong with it.
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.
I know, times are tough and every dollar counts, but in addition to being obsessed with the price tag while shaking your head, you should also weigh up the rewards from achieving long-term success.
Ask yourself these questions:
- Why am I building an ecommerce store? To expand my business? To generate some side income? Maybe one day I can quit my full-time job and work from home?
- To best reach my goals, should I automatically use the cheapest tools available? Or should I use the best tools available, even if it costs more per month?
If you’re going to enter a car race where the prize is freedom (however you define it – financial freedom, lifestyle freedom, freedom from your nagging boss, etc.), would you enter the race with the cheapest car you can find on the lot? Or would you actually consider investing in a high-performance car to give yourself the best chance of winning?
I’m not recommending that you throw your entire life savings away here. You’re more sensible than that.
What I’m suggesting is to consider investing in the best tool (even if it costs more) to give yourself the best chance to succeed.
You can see our full review of Shopify here.
The fact is, Shopify is not the cheapest ecommerce builder in the market. It’s not. But in my view, it is one of the best and it’s getting better every year.
Check out our ecommerce comparison chart here to see how Shopify stacks up against its competitors.
So, if you want to improve your chances of building a successful online store, Shopify is one of the best tools you can invest in to help you achieve your goal.
In this article you’ll learn:
- What you actually get from each Shopify pricing plan.
- Credit card rates – using Shopify Payments versus PayPal.
- Which is price plan is the right choice for you.
- The truth about transaction fees (Q&A) – common misunderstanding.
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-years plans, you save 10% or 20%, respectively.
|Shopify Pricing Plans||Shopify Basic||Shopify||Advanced Shopify|
An interesting fact I dug up is that based on Shopify’s annual report (they are a publicly listed company), there are more users on the monthly plan than the 1-year or 2-year plans.
This is a broad statement, but unfortunately Shopify didn’t provide exact percentages. I’d imagine that the discounts you receive are not steep enough for users to commit to longer terms.
On that note, you should also know that Shopify’s merchant growth has progressed at a pace of 74 percent on average since 2012, and helped its merchants process over $40 billion in sales.
Shopify is on an accelerated growth path and their brand continues to receive more and more recognition each year as one of the best ecommerce builders available today.
In fact, uber-successful entrepreneurs such as Tony Robbins and Daymond John (Fubu, Shark Tank) all recommend and support Shopify’s mission and platform.
Of course there are solid alternatives to Shopify out there (see our comparison to BigCommerce here), but none come with quite the same industry recognition as Shopify.
Getting back to Shopify pricing plans though, here’s exactly what you get from each plan:
|Features||Basic Shopify||Shopify||Advanced Shopify|
|Credit Card Rates||2.9% + $0.30||2.6% + $0.30||2.4% + $0.30|
|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.
To get a quote for Shopify Plus (not listed on the table above), you have to speak to Shopify directly. This is because it’s an enterprise-level ecommerce plan targeted at big businesses.
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.
I’ll go over the Credit Card Rates and Transaction Fees in much more detail below.
On Shopify’s pricing table, the Credit Card Rates section 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.
What this means is that when a shopper purchases a product from you, the payment processor that helps you collect money, and deposit the money into your bank account, will charge you a fee for handling this monetary transfer process.
It’s something you can’t avoid, unless you physically go to each shopper, collect the cash, and depositing it into your own bank account.
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 Powered by Stripe
Shopify Payments is actually powered by a very reputable payment processor called Stripe.
They’re known to be reliable, easy to work with, and for their transparent pricing structure.
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 vs PayPal
In this section, I’ll compare Shopify Payments (essentially Stripe) with PayPal – the most popular payment processor in the world.
PayPal is rock solid. It’s reputable, easy to use, but they’re more expensive than using Shopify Payments:
|Monthly Fees||$0||$30 *|
|Transaction Fees||2.9% + $0.30
2.6% + $0.30
2.4% + $0.30
|2.9% + $0.30|
|Amex Fees||Same as above||3.5% + $0.30|
|International Fees||Same as above||3.9% + Fixed Fee **|
|Accepts Apple Pay||Yes||No|
|Payout Schedule||2-Days: US, Australia
7-Days: Canada, Ireland, UK
Source: PayPal Merchant fee schedule
* If you want your customers to remain on your website throughout the entire checkout process, you’ll need to upgrade to PayPal Payments Pro ($30 per month). If you don’t, your customer will be redirected away from your website to PayPal’s secure payment page, then be brought back to your website after payment. Stripe keeps your customer on your website the entire time.
** If your customer is not based in your country, PayPal will charge you a higher percentage plus a fixed fee. The fixed fee depends on where your customer is located:
A lot of ecommerce businesses choose to use Stripe because their pricing structure is simple and transparent, and the funds are automatically deposited into your bank account a lot faster than PayPal.
In fact, 85% of Shopify users use Shopify Payments when it is available in their country (we’ll get into more details in the next section).
While PayPal is also reliable, their pricing structures are often confusing as there are a lot of “depends on…”, so it’s challenging to work out exactly how much they’re going to charge you per transaction.
It can be really frustrating sometimes, especially if you’re a very detailed type of person and want to know exactly how they calculated the fees.
At the end of the day, it’s cheaper to use Stripe / Shopify Payments if it is available in your country.
Keep in mind that the processing fee also decreases (though marginally) if you subscribe to a higher Shopify plan.
Shopify’s Basic Plan is great for anyone who wants all the standard functionality of an online store but isn’t bothered about all the fancy features that can come on top.
It costs $29 a month and can really help kick-start your journey into the world of ecommerce. It also is a fantastic way of creating a fully-fledged online store if you’ve had some initial success with the Lite Plan and want to make the step up.
Shopify’s Professional Plan is a smart choice for those who are really invested in growing their business. If your site currently returns around $5000 in monthly revenue, then this is the plan for you.
This plan costs $79 a month but gives you added features such as an abandoned cart recovery tool, which is proven to increase sales without adding to your workload.
Shopify’s Advanced Plan is designed for companies with monthly revenues in excess of $10,000 and costs $299 a month.
Shipping is handled by a third party and the plan also allows you to create advanced reports. This is an excellent feature for those looking for more accuracy when testing and projecting.
Shopify Lite allows you to add ecommerce functionality to an existing site (like a personal blog or even selling through Facebook). Whereas Shopify Plus caters for massive companies and takes care of managing your orders, giving you and your team more time to focus on marketing products.
Shopify Lite costs $9 per month and is for those just want to sell things on the side. It won’t allow you to create a separate online store and is really more of an added extra to your site rather than the main attraction.
If you want Shopify Plus however, you’ll need to get a quote from Shopify themselves. As a safe bet, though, you’ll be looking at around $2000 per month.
I see complaints about Shopify’s transaction fees quite often, usually from merchants who are concerned about how transaction fees can add up quickly and eat into their profits.
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, is it unique to Shopify (or if they’re just a bunch of greedy people), and what you can do.
Q: How do transaction fees work?
A: 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.
Q: What are transaction fees for?
A: 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).
Q: Doesn’t the monthly plan fee cover this already?
A: 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.
Q: What about other similar ecommerce builders? Do they charge transaction fees?
A: 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.
Q: Is there any way to remove Shopify’s transaction fees?
A: Yes. If you use Shopify Payments, they’ll remove all transaction fees.
Q: What’s the catch? Assuming if I use Shopify Payments and Shopify removes all transaction fees, how can they keep my ecommerce website powered?
A: 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).
Q: Will using Shopify Payments cost me anything more?
A: 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.
Q: Is using Shopify Payments going to save me more money compared to using other similar ecommerce builders?
A: 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.
Q: Are a lot of Shopify users using Shopify Payments?
A: 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.
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.
Now, imagine if you grew 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.