So you're thinking of starting an E-commerce store on Shopify or you're wanting to switch your store from something like WooCommerce to Shopify? Which plan should you sign up for?
Shopify has three main pricing tiers, Basic, Shopify and Advanced. Priced at $29, $79 and $299 per month respectively. There's also Shopify Plus at $2000/month and a Lite $9/month version if you're just starting out.
|Shopify Plan||Monthly Fee||Shopify Payments Fees|
|Basic||$29/month||2.9% +30c per transaction|
|Shopify||$79/month||2.6% +30c per transaction|
|Advanced||$299/month||2.4% +30c per transaction|
|Plus||$2000/month+||1.6% +35c per transaction|
Whilst these are the headline price points there's actually a lot more to consider when choosing the right account for your business.
This article aims to point you in the right direction, so you can start with the right plan.
Which is Cheaper, Shopify or WooCommerce?
Let's tackle the elephant in the room first. That age old question of Shopify vs WooCommerce.
Which is cheaper?
Well that's easy. On the face of it WooCommerce is considerably cheaper. You essentially need to pay for a domain and hosting account, install WordPress and the WooCommerce plugin and away you go.
However, you'll have to battle with the ongoing maintenance and building of your wordpress website, hosting and store, which if you're not particularly tech savvy… your better option is definitely Shopify.
Despite the extra expense, I switched from WooCommerce a number of years ago, and can now sleep at night knowing my store will be working in the morning, unlike my WooCommerce store which was temperamental at best.
How much do you really pay for Shopify?
Shopify charges not only a flat monthly fee, but also a transaction fee. And this can be an important consideration, especially if you choose to not use the Shopify Payments gateway.
Shopify Payments is shopify's own credit card processing facility. It's actually a Stripe account rebadged as Shopify Payments for use exclusively through your Shopify store.
If you're just starting out and your monthly revenue is below approximately $17K/month, it certainly makes sense to just use the Basic Shopify account.
When you're using Shopify Payments for all your payment processing, each tier of plan has different credit card rates.
- Basic Shopify – 2.9% +30c per transaction
- Shopify – 2.6% +30c per transaction
- Advanced Shopify – 2.4% +30c per transaction
Problem is it's likely you'll also be using other payment providers, for example Paypal Express Checkout. For my own store, I normally expect to see about 50% of my transactions being paid via Paypal.
Paypal fees vary from country to country, but starting out it's around 3.4% +30c transaction fee. But you also have to consider the transaction fee from Shopify for using a 3rd party payment provider.
- Basic Shopify – +2.0% per transaction in addition to your paypal fee
- Shopify – +1.0% per transaction
- Advanced Shopify – +0.5% per transaction
So you could be looking at a 5%+ payment fee.
Now there's a few ways to reduce these fees once you start processing higher monthly revenues ($50K/month), a lot payment providers will offer considerably better rates. For example I have a 3rd party Stripe account where I pay just 1.1% +20p transaction fee. And 1.4% Paypal fees.
How did I get this?
Simple, I asked 🙂
Payment providers are a competitive space, and know that many of us have options which we can switch to in a matter of days. So if you're processing enough payments each month, it pays to have an ongoing dialogue with your merchant account sales team.
What Features Do You Need On Shopify?
There's actually not too many differences between the different tiers on Shopify. The only one you might need to consider is the number of staff accounts.
- Basic Shopify – 2 staff accounts (in addition to the primary admin account)
- Shopify – 5 staff accounts
- Advanced Shopify – 15 staff accounts
So long as you keep a tight control off your accounts, the 5 staff accounts is normally enough for most e-commerce businesses below the $100K/month level.
The only other major feature to consider is the reporting. The professional reporting available in the middle Shopify pricing tier is well worth the upgrade. However there's a great reporting app you can get called Data Export for just $10/month which will enable you to create custom reports that rival that from the $2000k/month Plus account.
So really it comes down to revenue and deciding which account to go for.
I've calculated roughly the amount of revenue your store should be bringing in each month before considering the next pricing tier up.
Basic Shopify stores below $17,000/month in sales.
Shopify stores below $110,000/month in sales.
Advanced Shopify stores below $680,000/month in sales
Consider that your merchant fees are going to eclipse the Shopify tier pricing by a long margin. A $50,000/month revenue store will be paying about $1,500+ in merchant/transaction fees.
My pick for MOST stores would be the standard Shopify account at $79/month. However to save a couple of bucks more per month, definitely worth looking at the annual account, where you pay 12 months up front for a 10% discount. Personally I pay 24 months up front for a 20% discount.
3rd Party Applications On Shopify
Most people starting out with their new E-commerce business will probably not really need to get any add-on applications for Shopify. But there's a whole host of extra functionality available in the app store, which does come at a cost.
To give you an idea of the apps I use and their cost here's my list of recommended apps for a more established store.
- Zipify Pages – $97/month – Page/blog builder for Shopify
- Zipify One Click Upsell – $47/month + 1.5% transaction fee for upsell transactions
- ReCharge Subscription billing $29.99/month + 1% transaction fee
- Stamped.io Review App – $99.99/month
- Refersion – affiliate platform – $79/month
- Klaviyo – CRM – $20/month + dependent on number of contacts
- Conjured Referrals – refer-a-friend app – $25/month
As you can see these app costs can add up pretty quick so generally I only add apps if I can genuinely see an ROI for having them. I discuss all these and more in depth on my Shopify Dream Build post.
So hopefully that helps give you a clear idea of the pricing tiers and which Shopify Plan you should be selecting. Next step is to dive in and grab yourself a new account with Shopify.