When you launch your digital storefront on Shopify, it's essential to estimate all the potential expenses. A key cost to take into account is the Shopify fee per sale. In this guide, we will explain how Shopify's transaction fees work and what percentage Shopify takes from sales.
In addition to managing Shopify fees, optimizing your enterprise’s performance is essential for long-term growth. Mipler is a powerful reporting app that empowers you to optimize your business performance with insightful reports on different business metrics such as sales, operations, inventory, etc.
Does Shopify Take a Percentage of Sales?
Yes, Shopify does take a cut, but it's not a flat fee. The exact Shopify percentage of sales varies on different plans. Shopify provides a tiered structure of pricing with four main plans: Basic, Shopify (standard), Advanced, and Plus. Each of them has a distinct Shopify payout fee, which is a combination of a % of the total sales price and a fixed fee per transaction.
Does Shopify Take a Cut of Sales?
Shopify operates on a subscription model, but there's another layer of expenses store owners need to pay attention to – Shopify transaction fees. Yes, Shopify takes a cut of your sales, but unlike a flat charge, it's a variable amount based on your chosen plan.
Think of it like a tiered system. Each Shopify plan has its own transaction fee structure. Shopify payment fees are a combination of a percentage of your total sales and a fixed fee per transaction.
Differences in Commissions Depending on the Shopify Package
Shopify has a flat monthly subscription cost, but a hidden pay lurks in the shadows: transaction fees. These fees, essentially a commission Shopify takes from each sale, are different in every plan. Let's explore the details and dissect the specific commission structures for each Shopify package:
Basic Plan and Shopify credit card processing fee
The Shopify Basic plan costs $19 USD per month. It is an attractive choice for solo entrepreneurs who are at the beginning of their e-commerce journey. Here's an overview of its key features:
- Cost-effective: It is the most affordable option, with a Shopify monthly payment of $19 USD. However, it's important to factor in the Shopify transaction fees, which act as a commission on each sale.
- Ideal for beginners: Plan is equipped with all the necessary tools to launch and operate your online store, making it manageable for those new to e-commerce.
- Supports multiple inventory spots: You can manage inventory across up to 10 locations, which is helpful if you operate out of multiple warehouses or fulfillment centers.
- 24/7 support: If you encounter an issue, you can contact Shopify's customer support team via chat.
- Sell internationally: This plan allows you to tap into new markets in up to 3 international regions.
- POS Lite: This feature allows to process in-person purchases through a Shopify POS system. Hardware might be required and sold separately.
Shopify credit card processing fees on the Basic Plan
- The Basic plan charges a Shopify merchant fee on every transaction. This fee is a combination of a percentage of your total sales price and a fixed fee per transaction.
- The Shopify sales fees are 2.9% of your sales price plus $0.30 per transaction.
Shopify Plan and payout fees
The Shopify plan, priced at $52 USD per month, caters to small businesses planning to scale their online store. Here's a closer look at its characteristics:
- Team Collaboration: You can add up to five accounts for your employees, enabling your team members to oversee different aspects of the store.
- Cost-Effective Growth: It offers a lower commission rate, potentially saving the budget on rapid turnover.
- Multi-Location Inventory: Operate stock across up to 10 warehouses or fulfillment centers for seamless inventory control.
- Shopify's 24/7 chat support. No matter what time of day or night, you can chat with a customer service representative to get assistance with your store.
- Foreign markets: Sell in up to 3 international regions, opening your products to a wider customer base.
- POS Lite: You can process in-person purchases through Shopify's POS system, perfect for markets, pop-up shops, or brick-and-mortar locations.
Shopify merchant fees:
- The Shopify plan has a more favorable commission structure compared to the Basic plan. Shopify charges per transaction based on a % of your total sales price and a fixed fee per transaction.
- The Shopify commission fee is 2.6% of your sales price plus $0.30 per transaction. This translates to slightly lower commission costs than the Basic Shopify plan's 2.9% rate.
The Advanced plan and Shopify credit card fees
For businesses experiencing significant growth, the Advanced plan with Shopify subscription costs $399 USD/month and provides premium features for managing your enterprise effectively. Let's delve into what is included in the Advanced plan:
- In-Depth Data Analysis: This plan goes beyond basic reporting and generates customizable reports and presiece analytics. You can tailor reports to get better insights into sales, customer journey, and product performance.
- Enhanced Team Management: The Shopify Advanced plan provides a significant improvement to your enterprise capabilities by offering 15 accounts for staff members.
- Scalable Checkout: This plan boasts a 10x increase in checkout capacity compared to lower tiers, so your store can process large volumes of traffic and transactions.
- Supports multiple warehouses: You can manage inventory across up to 10 locations.
- Premium 24/7 Chat Support: For critical situations, this plan grants priority access to Shopify's chat support team.
- Sell internationally: Test the international waters by launching in up to 3 new markets. Additionally, you can scale your reach further by adding more markets for an additional Shopify plan costs $59 USD per month each.
- POS Lite: Turn your digital storefront into a brick-and-mortar hybrid with POS Lite and process in-person purchases through Shopify's point-of-sale system.
Shopify payments fees on the Advanced Plan
- This plan has the lowest Shopify payment processing fee among all other plans.
- The Shopify percentage rate is 2.4% of your sales price and an extra $0.30 per transaction. This translates to the lowest commission cut compared to other plans, potentially leading to notable cost savings.
The Plus plan and fees of Shopify
This plan caters to complex, high-growth enterprises with intricate needs. Shopify fees start at $2,300 USD per month on a 3-year term. Plan has a comprehensive suite of features designed to empower you to scale and manage your operations efficiently. Here's a closer look at what sets Shopify Plus apart:
- Unmatched Data Insights: Move past basic metrics with the Advanced plan. Build custom reports and leverage advanced analytics to get the insights you crave.
- Massive Inventory Management: Manage stock across a vast grid of up to 200 inventory locations and a complex supply chain.
- Priority Phone Support: Receive the ultimate level of support with 24/7 priority access to Shopify's phone support team.
- Global Sales: This plan lets you tap into a large international audience by unlocking up to 50 different markets.
- Unlimited Team Collaboration: Build a powerhouse team with no limit on the accounts for your team members.
- Highly Customizable Checkout: Take complete control of the checkout experience with a fully customizable checkout process. The Advanced plan offers a whopping 40 times more capacity than lower plans, keeping your sales flowing smoothly.
- Advanced POS Integration: Manage in-person sales seamlessly with 200 POS Pro locations included. This plan integrates seamlessly with Shopify Payments, offering a unified platform for operating both online and offline transactions.
- Wholesale and B2B Functionality: Expand your reach beyond direct-to-consumer sales with the opportunity to sell wholesale and cater to B2B clients.
Transaction fees on Shopify Plus
Shopify payment transaction fees depend on your specific enterprise and operational scale. They guarantee competitive rates for large-quantity sales, potentially leading to significant cost savings compared to lower tiers.
How to Choose a Profitable Plan for My Business on Shopify?
Opting for the right plan and Shopify transaction charges hinges on maximizing your company's profits. Here's a cheat sheet to navigate the selection:
Know the stage of your business:
- The basic Plan with a Shopify fee of $19/month offers an affordable launchpad.
- The standard plan with Shopify monthly payments of $52/month balances affordability with features like lower transaction fees (2.6%) and extra employee accounts for your expanding team.
- The Advanced plan with a Shopify payment rate of $399/month empowers bigger enterprises with extra features and a competitive Shopify commission rate (2.4%).
- For the Plus plan, Shopify charges start at $2,300/month on a 3-year term. It offers the ultimate solution with superior support and custom Shopify processing fees for large amounts of orders.
Consider Shopify’s cut:
Shopify transaction fees significantly impact your profits. Here's a simplified breakdown:
- Basic Shopify: 2.9% + $0.30/transaction fee on Shopify,
- Shopify: 2.6% + $0.30/transaction fees of Shopify,
- Shopify Advanced: 2.4% + $0.30/transaction of Shopify charge,
- Shopify Plus: Custom fees. It means there is no strict limit on how much percentage does Shopify take (generally competitive for high-volume sales).
Essential features:
Don't get fixated on Shopify subscription price alone. Consider the following attributes:
- Members account,
- Inventory management,
- International sales,
- Advanced analytics.
Scale Up Seamlessly:
You can change your plan anytime to match your growing operational needs. Start small and opt for higher Shopify payment plans as needed.
Bonus Tip: Integrate Mipler with your Shopify enterprise to get data-driven insights and potentially reduce costs by optimizing your pricing strategy.
By understanding your enterprise level, Shopify processing fees, and feature needs, you can select the correct plan to fuel your profitability.
Frequently Asked Questions About Shopify's Percentage of Sales
What percentage does Shopify take from sales?
Shopify does charge a transaction fee, a combination of a % of your total sales price and a fixed fee per transaction. The specific percentage differs based on your pricing tier:
- Basic Shopify: 2.9% + $0.30 per transaction,
- Shopify: 2.6% + $0.30 per transaction,
- Shopify Advanced: 2.4% + $0.30 per transaction,
- Shopify Plus: Custom fees.
How does Shopify make money from you and how much?
To count how much of a cut does Shopify take you need to combine two types of charges:
- Monthly Fees: $19-$2300/month depending on your chosen plan and its features.
- Transaction Fees: Shopify commission of 2.4%-2.9% + $0.30 on each sale you make.
Larger enterprises can benefit from upgrading to a plan with a lower commission rate to gain profit. They also earn from app and theme sales within their store.
Is it profitable to use Shopify for an online store with such payments?
Profitability depends on various factors, including your operational scale, product margins, and chosen plan. Here's what you need to consider:
- Monthly Fees: Shopify plan costs from $19/month to $2300/month.
- Transaction Fees: The percentage cut Shopify takes can impact profits, especially with large turnover.
- Additional Fees: Factor in potential costs for extra apps, themes, and payment processing fees outside of Shopify Payments.
Is it possible to bypass Shopify commissions?
Unfortunately, no. commissions are integral to Shopify's revenue model, but you can minimize their impact by:
- Selecting the Right Plan: Choose a plan with a lower commission rate if your operational scale justifies it.
- Optimizing Your Pricing Strategy: Use data and analytics to set competitive prices that factor in Shopify fees while maintaining profitability. Consider using Mipler for valuable insights.
- Negotiating Payment Processing Fees: If you use an external payment processor, explore negotiating lower fees.
How can Mippler help you achieve efficiency?
Mipler seamlessly integrates with Shopify, generating powerful reporting and analytics, so you can:
- Gain sales insights: Track key metrics and identify areas for improvement to refine your pricing strategy and potentially lower expenses.
- Reduce waste: Mipler's inventory reports help you avoid stockouts and overstocking, so you have the right products available and minimize dead stock.
- Get better customer satisfaction: Mipler's analysis helps you learn your customer base, tailor your marketing efforts, and improve customer experience.
By understanding Shopify's fees, picking the right plan, and leveraging tools like Mipler, you can maximize your company’s profitability on the Shopify platform.
