Shopify online store and Shopify Plus – a new trend in eCommerce
Shopify (including Shopify Plus) is an eCommerce platform whose popularity is constantly growing, gaining masses of new customers. It seems that in a short time it will be the most used eCommerce platform in the global market. At the moment, Shopify may describe the following points:
- 1.75 million sellers trade on Shopify, and 1.59 million live websites use Shopify;
- 17,683 domains are currently supported by Shopify Plus – note that sellers can run stores across multiple domains (11,788 different sellers currently run Shopify Plus);
- Shopify stores now run businesses in 175 different countries;
- Shopify served 20 percent of all e-commerce sites in 2020.
Shopify, an eCommerce platform in the SaaS model for micro and SME
Shopify is subscription-based (SaaS) software that allows anyone to set up an online store and sell their products. Shopify store owners can sell in physical locations at the same time using Shopify POS, Shopify’s point-of-sale app and accompanying hardware. If the seller is active both online and physically, his inventory and inventory are synchronized, so he can manage the store (including physical stores) from one account on any device.
Shopify Plus is an enterprise level software for larger-scale businesses
Shopify Plus is in fact the highest possible package of Shopify services, which is dedicated to larger entities with a turnover of several million annually. Shopify Plus was launched in 2014 to provide fast-growing businesses with a customizable corporate solution without the high cost of time, money, and development. Shopify Plus is an alternative to other enterprise-class solutions, such as: Magento 2, BigCommerce or Shopware. Shopify Plus significantly enriches the functions of the standard Shopify, at the same time giving the possibility of virtually unlimited scaling of the eCommerce business, also in terms of technology and design.
Shopify pricing – How much does Shopify and Shopify Plus cost?
Shopify offers five different plans, each with their own features and price:
- Shopify Lite: Add products to any website or blog and accept credit card payments.
- Basic Shopify: All the basics to starting a new business.
- Shopify: Everything you need for a growing business.
- Advanced Shopify: Advanced scaling capabilities for your business.
- Shopify Plus: Enterprise solutions for large resellers and large companies.
Shopify’s pricing includes many items. Subscription costs, payment fees, and transaction fees are involved. The table below provides an overview for all options (based on data from the official Shopify and Shopify Plus websites):
|Basic Shopify||Shopify||Advanced Shopify||Shopify Plus|
|Monthy payments||$29||$79||$299||$2000 +|
|Inventory locations||up to 4||up to 5||up to 8||up to 20|
|Free SSL Certificate||✔||✔||✔||✔|
|Abandoned Cart Recovery||✔||✔||✔||✔|
|Advanced reports generator||–||–||✔||✔|
|Third-party calculated shipping rates||–||–||✔||✔|
|Shopify POS Lite||✔||✔||✔||✔|
|International market management||✔||✔||✔||✔|
|Market domains and subfolders||✔||✔||✔||✔|
|Local payment methods||✔||✔||✔||✔|
|Duties and import taxes||–||–||✔||✔|
|Custom pricing by market||–||–||✔||✔|
Monthly and yearly Shopify subscription costs
As a SaaS-based software, Shopify charges customers for the ability to use the software based on the plan / bundle the merchant purchases. By default, you are billed on a monthly basis, but you can choose from an annual, two-year, or three-year option to save on a Shopify subscription. See the table below for the monthly, upfront monthly, annual, two-year and three-year subscription costs.
|Monthy||Annual (10% discount)||Two-year (20% discount)||Three-year (25% discount)|
Shopify payments, transaction fees, and commissions.
Additional payments for using the Shopify platform depend on the payment gateway used. In the largest markets, Shopify is currently offering its dedicated payment processor for the online store operating through the Shopify platform. The dedicated payment processor is called Shopify Payments, and the list of countries where it can be used is available here. Shopify Payments allows merchants to accept several types of payment methods, including major credit cards and Apple Pay. It’s also fairly easy to set up in your Shopify store, and Shopify doesn’t charge extra as you would when using other payment gateways in Shopify. The transaction fees (similar to most payment gateways) for Shopify Payments are shown in the table below.
|Fees||Shopify Lite||Basic Shopify||Shopify||Advanced Shopify||Shopify Plus|
|Online credit card rates||2.9% + 30¢||2.9% + 30¢||2.6% + 30¢||2.4% + 30¢||Variable|
|In-person credit/debit card rates||2.7% + 0¢*||2.7% + 0¢||2.5% + 0¢||2.4% + 0¢||Variable|
If a merchant isn’t using Shopify Payments, they’re forced to use third-party payment gateways for which Shopify charges additional transaction fees. Fees vary depending on the package, they are charged as a specific% of the online store’s turnover. The exact amount of fees for Shopify is presented in the table below:
|Additional fees||Shopify Lite||Basic Shopify||Shopify||Advanced Shopify||Shopify Plus|
|Third-party payment gateways||2.00%||2.00%||1.00%||0.50%||0.15%|
Despite the additional fees associated with the use of third-party payment gateways, in many cases, using a third-party payment gateway may prove to be more advantageous than using Shopify Payments.
Shopify Plus fees pricing
The basis of the license fees model in Shopify Plus is the use of the platform (the use is equal to the monthly sales volume in Shopify Plus). It is all based on the principle that the higher your turnover as a seller, the more support and server resources you need.
The minimum start-up fee for using Shopify Plus is $ 2,000. Most sellers operate within this amount. At the moment when the company’s turnover exceeds 800k USD per month, the fixed fee is additionally increased by 0.25% of the turnover value up to the specified limit amount. The maximum license fee is $ 40,000 per month.
For example, according to the Shopify Plus price list, a company that generates a turnover of $ 1 million per month will pay $ 2,500 in monthly license fees. For the same vendor to pay the maximum monthly license fee of $ 40,000, they would need to reach $ 16 million in monthly sales.
Shopify Plus and Shopify pricing, what should you pay attention to?
It goes without saying that choosing the right Shopify package is not limited to the licensing and additional fees pricing. However, this is quite an important point that sellers take into account when deciding to operate an online store in the Shopify environment. As the information presented in this article shows, many factors affect the final cost of your Shopify and Shopify Plus license fees.
The theoretical examples presented in the article show that the final cost of license fees varies depending on the turnover generated by the online store. The appropriate volume of the online store’s turnover, even the initially most expensive Shopify Plus package fares the best.
As Blue Owl, we are at your disposal and we will be happy to advise you if and when it is worth changing from traditional eCommerce to the one based on Headless Commerce Shopify Plus. Contact us for a free quote or consultation.