Are you looking for a small business idea that entails low startup costs? You should consider creating a Shopify store!
There is a great opportunity to make money with an online store business without a huge capital investment. But still, there is some investment involved as you expand and grow your business.
You must familiarize yourself with the Shopify costs and transaction fees to maximize your ecommerce store’s profitability.
When I started my online business, I did not have a lot of capital to work with. Therefore, I spent time researching the best ecommerce platforms that allowed me to set up a simple online store to sell online.
As I scaled my business, I expanded my existing website to cater to my online business’s growing needs and demands.
Before you can think about expanding your business, though, knowing the basics of the expenses involved when running Shopify stores is crucial.
This guide will help you determine how much does it cost to sell on Shopify!
Key Takeaways
- The most basic Shopify cost is the Shopify plan, which varies according to the tier of your chosen subscription plan, starting at $29 per month and going up to $2,300 per month.
- Transaction fees for each sale and additional payment processing fees are a part of your costs for running an online store in Shopify.
- Setting up your Shopify store involves costs, such as buying a custom domain, premium themes, and third-party app integration.
- Consider the tax and currency conversion fees when selling in the US or internationally.
How Much Does it Cost to Sell on Shopify?
To answer the question above, we need to break down the various aspects of running a Shopify store that involve payment. The initial fee to consider when starting an online store with Shopify is based on Shopify’s pricing plans.
Use the guide below to pick the best Shopify plans for your online store.
Shopify Plans & Pricing
Remember that Shopify pricing plans might vary or change at any time. However, as of 2024, you could enjoy a free trial before committing to any paid Shopify plans.
You only need to provide an email address to start the free trial before choosing any of the paid Shopify pricing plans. After your free trial, you can use the Shopify ecommerce platform for $1 in your first month.
Shopify pricing offers four options to suit your business needs and size. You may change plans after signing up, which is essential for Shopify store owners who want to scale their business.
Basic Plan
The basic plan is ideal for small businesses run by solo entrepreneurs or those new to selling online. It’s among the most popular Shopify plans because it is ideal for newcomers to build an online store.
This Shopify plan lets you set up a full-featured online store with checkout functionality, multiple sales channels, collaborator accounts, 10 inventory locations, live chat support, manual order creation, standard app integrations, and standard analytics.
The transaction fee for the Basic plan is 2% per transaction and a 2% fee for third party payment providers.
Shopify Basic plan rates: $25 per month or $19 per month (paid annually)
Shopify Plan
The next level in the Shopify pricing plans is ideal for small teams or businesses.
It offers the same features as the basic Shopify plan but has five additional staff accounts (whereas the Basic plan has none). API access is included in this plan, making it easier to integrate third-party apps into your online store.
There is a transaction fee of 1% per sale and a 1% payment processing fee for third party payment providers.
Shopify plan rates: $65 per month or $49 per month (paid annually)
Advanced Plan
The Shopify Advanced plan is ideal for scaling your online store.
It has advanced features, such as custom reporting and analytics, up to 15 additional staff accounts, and 10x checkout capacity. When using third-party payment processors, the transaction fee is 0.6% per sale.
Advanced Plan users also have access to enhanced live chat support.
Advanced plan rates: $399 per month or $299 per month (paid annually)
Shopify Plus Plan
If you’re a high-volume merchant, the Shopify Plus plan is recommended for Shopify pricing plans. It offers competitive rates and advanced features to meet your online store’s growing demands.
The advanced features available to Shopify Plus plan holders include 200 inventory locations, custom reporting and analytics, 200 POS Pro locations, up to 50 markets for localized global selling, and a fully customizable checkout.
It is also ideal for selling wholesale or B2B businesses. The transaction fee for Shopify Plus sellers is 0.2%.
Shopify Plus plan rates: Starting at $2,300 per month on a 3-year term
Different Shopify Fees
You pay Shopify fees to use the e-commerce platform and its features. These Shopify costs are used toward hosting, maintaining ecommerce features, and other functionalities you can utilize in your online store to sell online.
Aside from the Shopify plans and their corresponding fees, you must pay other Shopify fees. Knowing about these Shopify costs is crucial to determine if you can afford to sell with a Shopify store.
Transaction Fees
Aside from your subscription fees, Shopify’s transaction fees will account for most of your costs for running an e-commerce store on this platform. A transaction fee is a percentage of your online sales in your Shopify store.
The standard Shopify transaction fee is 2.9% + 30 cents for each online transaction. However, the transaction fee charged per sale will vary depending on your Shopify pricing plans.
Choosing a high-tier Shopify plan entails a lower transaction fee per sale.
Here is an overview of the Shopify transaction fees according to your Shopify plan:
- Basic Plan – 2%
- Shopify Plan – 1%
- Advanced Plan – 0.5%
- Shopify Plus – 0.15-0.30%
If you accept payments using a third-party payment processor instead of Shopify Payments, you must consider additional transaction fees on Shopify.
Like the Shopify pricing plans, the charges will vary depending on the subscription level.
Download this eBook to jump start your dream Shopify business today!Shopify Tax Fees
Shopify Tax is another cost that online store owners must consider when using Shopify as an ecommerce platform. It is available to all merchants within the US.
You will see it on your bill along with your monthly subscription plan if all of these apply to you:
- If your online store is in the US and you sell to US customers.
- If you collect tax in states where you owe a tax liability.
- If you choose Shopify Tax to collect your taxes in your online business,
- If you have online sales valued at $100,000 or more within one calendar year.
If your online store’s sales reach or go beyond the fee threshold ($100,000 annually or more), then you are charged the Shopify Tax fee for each transaction on your store that has tax calculated.
For the Shopify pricing plans subscriptions under the Basic to Advanced Shopify plans, including the Shopify Starter and Shopify Lite accounts, you will be charged a 0.35% tax calculation fee.
Meanwhile, Shopify Plus merchants are charged a 0.25% tax calculation fee for every transaction that requires a tax calculation.
Payment Processing Fees
If you use Shopify Payments to receive payments on your online store, you won’t have to worry about paying any Shopify fees. However, you can expect to handle payment processing fees using a third-party payment provider, such as credit or debit cards.
The processing fee that Shopify charges is used for Shopify to integrate that external payment provider into your store, which makes it easier for sellers to receive customer payments.
The credit card fees when selling on Shopify vary depending on your subscription plan. It ranges from 2.9% + 30 cents for online transactions for the Basic Plan to 2.4% + 30 cents for the Shopify Advanced plan merchants.
However, Shopify Plus merchants can enjoy the advantage of waiting for credit card fees or other fees from third-party payment processors.
Shopify POS
Using point of sales services for receiving payments in your Shopify store also entails fees. The fee for using point of sales services varies according to the specific type of POS: Lite or PRO.
For POS lite users, you can accept in-person credit card payments, create customer profiles, and manage orders. With the Shopify POS Pro plan, you will pay $89 per month and location.
All other credit card fees still apply per transaction. It is a great tool for store owners who sell locally and want to receive in-person payments, which are more secure.
Domain Fees
When signing up to Shopify to build an online store, you will enjoy hosting and domain through the website (if you don’t already have an existing domain).
While Shopify assigns a default domain to your store, purchasing a custom domain that will serve as your online store address on the web is recommended. Buying a custom domain is also vital to improve your store’s branding.
If you don’t have an existing domain, you can purchase through Shopify, and the cost will depend on the top-level domain extension (such as .com or .net).
Buying a domain starts as low as $13 and can cost up to $37, depending on the domain’s popularity and its extension. The Shopify pricing plans can support up to 20 subdomains, except for the Shopify Plus plan, which can support up to 1,000 subdomains.
Design or Template Fees
Building a Shopify store requires you to customize your storefront to make it visually attractive for potential customers. Choosing a template and theme for your online store is also critical for branding.
The Shopify theme store offers a wide selection of free and premium themes, so online store owners can pick a design that fits their branding or niche. The premium themes cost between $300 and $500, so you can decide which theme to use based on your budget and business needs.
Third-Party Apps
Integrating Shopify apps is crucial to building a fully customizable online store.
While a simple online store will do, integrating apps increases the functionality and features of your ecommerce store to deliver an improved shopping experience.
The Shopify App Store offers an extensive selection of Shopify apps, ranging from free to paid third-party apps. Currently, there are over 8,000 apps on the Shopify App Store, allowing you to find an app that fits your needs.
These Shopify apps can charge a one-time fee or a monthly subscription fee.
Apps can also improve how you manage your online business. For example, you can message and respond to customer inquiries, improve the checkout experience, or access detailed reporting and analytics.
Other Shopify Store Fees
In addition to the monthly fee, you will also pay a conversion rate fee when using Shopify. This fee applies to international Shopify sellers who receive payments in other currencies.
This transaction prompts a currency conversion, and a conversion rate fee applies.
The currency conversion rate differs according to the existing market rate at the time of the transaction. It is not a fee, nor is it paid to Shopify. Shopify charges you the currency conversion fee to your online store to initiate the currency conversion when you receive payments.
Note that the currency conversion fee is non-refundable, especially when the customer seeks a refund for their order. Shopify charges a 1.5% conversion fee in the US or 2% for international transactions (for merchants using Shopify Payments).
Conclusion: How Much Does it Cost to Sell on Shopify?
Understanding the different Shopify costs involved will help determine if this ecommerce platform will bring enough profitability for your business.
Most online store owners choose Shopify as a platform for online selling because of its excellent tools and features. Still, you must also consider the various Shopify fees and how they impact your profit margin.
Using the information mentioned here, you can decide how the Shopify fees will help your small businesses hit the sales target.
Remember that Shopify is only one of the many ecommerce platforms, and finding the right one for your online store requires you to consider the pros and cons of each.
Good luck in building a profitable online store! Hopefully, this information was able to help you choose the right ecommerce platform.
FAQs
Is it worth to sell in Shopify?
The Shopify costs might seem daunting, especially if you are new to online selling.
However, given the ease with which you can set up your ecommerce business online and manage your online store through its vast suite of tools and features, you can compensate for these fees if you can build a profitable store.
How much money do I need to start selling on Shopify?
It depends on your business goals and the chosen pricing plans. The most basic plan costs $29 per month and is charged 2% of online sales.
You can start with the lowest plan and gradually upgrade to a higher one as your business needs change.
Is Shopify $1 dollar for 3 months?
The Shopify pricing plans have been revised, so you can get a free trial account for 3 days and enjoy your first month for $1. After the first month, you must upgrade to the Shopify pricing plans that fit your needs.
What is cheaper, Etsy or Shopify?
Etsy is cheaper than Shopify, and there are no monthly subscription fees. However, in the long term, Shopify’s costs will be worthwhile, especially if you want to grow your business and become a high-volume merchant.
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