The popular online store builder, Shopify, is a top choice for many looking to start an online business. It's more popular than other eCommerce platforms for a reason and offers various pricing plans for different business needs.
Whether you’re a seasoned seller, or completely new to all things Shopify, you’ll have a million and one questions about Shopify fees.
In today's blog post, we’re going to give you a comprehensive breakdown so you can quickly become a Shopify fee extraordinaire.
Key Takeaways from this Post
Understanding Shopify Fees
Shopify fees are the payments you'll be charged for using the platform. The charges can include a percentage of the products or services you sell, maintenance costs, and more.
So, how much does it cost to create a Shopify store?
The Shopify basic plan costs $29 per month plus 2.9% of the selling price plus 30¢. However, the prices depend on the Shopify subscription you choose.
There are different Shopify fees that you need to pay. These are:
- Subscriptions
- Design & Templates
- Transaction Fees
- Payment Fees
- Domain Fees
- App Fees
- eMail Fees
- Marketplace Connect Fees
- Integrated Shipping Fees
- Integrated Tax Solution Fees
- Point of Sale Fees
Shopify Fees for Subscriptions
Firstly, Shopify charges a subscription fee. These are paid monthly, yearly, or annually.
The monthly fees for Shopify plans are as follows (you can save 10% on all subscriptions by choosing to pay yearly):
- Basic plan: $19
- Shopify plan: $49
- Advanced plan: $299
In addition, there are two more plans for Shopify users:
- Starter Plan (allows selling through social and messaging apps): $5/month
- Shopify Plus Plan (suitable for high-volume business needs): $2,000/month
Which Shopify Subscription Plan Should You Choose?
Starter Plan - $5/month
Perfect for businesses that primarily sell through social media and messaging apps.
Benefits & Features
- Sell on Social Media: Seamlessly integrate your product listings on platforms like Facebook, Instagram, and more.
- Messaging Apps Integration: Engage and sell directly through popular messaging apps.
Basic Plan - $19/month
Ideal for individuals and small businesses just starting their eCommerce journey.
Benefits & Features
- Online Store: Build an online store with Shopify's robust eCommerce platform.
- Unlimited Products: Add as many products as you want without any restrictions.
- 2 Staff Accounts: Allow up to two staff members to manage your store.
- 24/7 Support: Round-the-clock email and live chat support.
- Sales Channels: Promote and sell on multiple platforms, including social media.
- Inventory Locations: Track inventory across up to 1,000 locations.
- Discount Codes: Offer discounts to attract more customers.
- Free SSL Certificate: Ensure your store's data is secure.
- Abandoned Cart Recovery: Retrieve lost sales by reaching out to customers who didn't complete their purchase.
- Basic Reports: Access essential reports to understand your store's performance.
Shopify Plan - $49/month
Suitable for growing businesses that need more advanced features.
Benefits & Features
- All features from the Basic Plan.
- Gift Cards: Offer gift cards to diversify your sales strategy.
- Professional Reports: Get in-depth insights into your store's performance.
- Customer Segmentation: Group customers based on specific criteria for targeted marketing.
- Marketing Automation: Engage customers automatically at different stages of their journey.
Advanced Plan - $299/month
Designed for well-established businesses looking for comprehensive eCommerce solutions.
Benefits & Features
- All features from the Shopify Plan.
- Advanced Report Builder: Customize your reports for a deeper understanding of your business.
- Third-party Calculated Shipping Rates: Integrate with third-party apps for accurate shipping calculations.
Shopify Plus Plan - $2,000/month
Tailored for high-volume businesses and enterprises.
Benefits & Features
- All features from the Advanced Plan.
- Enterprise-Level Tools: Access tools for Shopify, designed for scalability and complex operations.
- Dedicated Support: Get a dedicated account manager to assist with all your needs.
- Customizable Checkout: Personalize the checkout experience for your customers.
- API Support: Integrate with a wide range of third-party applications and systems.
Regardless of the plan you’re on, Link My Books can automate your Shopify bookkeeping and save you upwards of 6+ hours per month in doing so. Learn more here.
Designs and Templates Fees
There are 70 paid and 10 free templates in Shopify's theme store. Prices for the templates vary from $150 to $350.
When sold by third-party vendors like Pixel Union and Sandbox, the price can increase to as much as $500.
Shopify's Transaction Fees
When you sell an item, you need to pay a percentage of the selling price to Shopify. It's called the transaction fee.
Shopify charges 2.9% + 30¢ per transaction. However, the Shopify transaction fees depend on the plan you’re using.
For example, when you are on the Shopify pricing plan subscription, you will be charged 2.5% + 30¢ per transaction. It will be 2.4% + 30¢ per transaction for the Advanced Shopify plan. As you can see, the higher your Shopify plan, the lower your Shopify fees will be.
Shopify Payment Fees
Think of these as payment processing fees. When your customer pays via Shopify Payments, you’ll be charged a payment processing fee. (Different payment gateway providers like PayPal, Klarna, and Clearpay require different charges.)
These charges also vary depending on the plan that you’re subscribed to. These fees are calculated as follows:
- Credit card processing fees for online transactions: 2.9% + $0.30 (Basic), 2.6% + $0.30 (Shopify), and 2.4% + $0.30 (Advanced)
- Processing fee for in-person debit/credit cards: 2.7% + $0.30 (Basic), 2.5% + $0.30 (Shopify), and 2.4% + $0.30 (Advanced)
Shopify Domain Fees
Though this fee is included with your plan, you can choose a custom domain name for your store. Depending on the specifics of your domain registration, this will cost you anywhere from $11 to $81.
Shopify App Fees
There are some Shopify apps that you can use to make your business more efficient. Some apps are free and some are paid. Apps are a great way to upgrade your stores marketing, reporting, accounting and general efficiency too.
Shopify Email Fees
Each plan includes 2,500 monthly free emails, with each additional email costing $0.001. The platform will give you a price estimate whenever you exceed your monthly allocation of free emails.
Shopify Marketplace Connect Fees
Shopify Marketplace Connect is a feature that allows merchants to seamlessly integrate their Shopify store with various marketplaces.
While the first 50 orders synced from these marketplaces to Shopify are free every month, any additional orders beyond this number incur a 1% transaction fee.
However, there's a cap to this – you won't be charged more than $99 per month, regardless of the number of orders.
Shopify Shipping Fees
One of the standout features of Shopify is its integrated shipping solution. Merchants can avail of competitive shipping rates from major carriers like DHL Express, UPS, and USPS, with discounts reaching up to 77%.
Additionally, Shopify has introduced a beta feature where merchants receive up to $200 coverage on each eligible Shopify Shipping label. This acts as a safety net, ensuring that both the seller and the buyer are protected against potential shipping mishaps.
Shopify Tax Fees
Tax calculations can be a headache for many online sellers. Shopify Tax aims to simplify this process.
It offers accurate sales tax calculations, ensuring that the correct amount is collected at checkout based on product-specific rates and the customer's precise address.
Merchants can also track their tax liabilities and get automatic updates on rate changes, regulation tweaks, and tax holidays. The first $100,000 in US online sales per calendar year is free.
Beyond this, a fee of 0.35% (capped at $0.99 per order and $5,000 per year) is applied for transactions where taxes are calculated.
Shopify & VAT
Additionally, for merchants selling to European customers, understanding and managing Shopify VAT (Value Added Tax) is crucial. Shopify assists in this aspect by automatically calculating VAT rates based on the customer's location and the type of product being sold. This ensures that merchants remain compliant with European tax regulations, reducing the risk of incurring penalties or facing legal issues.
Shopify Point of Sale (POS) Fees
Shopify's POS system integrates online and offline sales. The basic version, Shopify POS Lite, is suitable for businesses of all sizes.
For those needing advanced features, Shopify POS Pro offers faster workflows, enhanced staff permissions, and detailed inventory reporting tools for $89 USD/month per location.
Shopify Fees Breakdown
To give you a clearer picture, here's a breakdown of the various Shopify fees you might encounter:
Examples of Shopify Fees
Scenario 1: Newbie Entrepreneur Starting Small
John has just started his online t-shirt business and opts for the Basic Shopify plan. He also decides to buy a premium theme to make his store stand out.
- Subscription Fee: John pays $19/month for the Basic Shopify plan.
- Design & Templates: He spends $180 on a premium theme.
- Transaction Fees: John doesn't use Shopify Payments, so he incurs a 2.0% transaction fee on his sales.
- Payment Fees: Using a third-party payment provider, John pays an average of 2.9% + 30¢ for each online transaction.
Scenario 2: Growing Business Expanding Reach
Sarah's handmade jewelry business is booming. She upgrades to the Shopify plan and starts selling on other marketplaces, syncing more than 100 orders a month to Shopify.
- Subscription Fee: Sarah pays $49/month for the Shopify plan.
- Marketplace Connect Fees: After syncing her first 50 orders for free, Sarah pays a 1% fee for the next 50 orders, costing her $0.50/order.
- Integrated Shipping Fees: Sarah uses Shopify Shipping and gets a 50% discount on her shipping rates.
- App Fees: To enhance her store's functionality, Sarah spends $30/month on third-party apps.
Scenario 3: High-Volume Seller with Physical Store
Mike runs a successful electronics store and decides to sell online. He chooses the Advanced Shopify plan and also sets up a physical store using Shopify's POS system.
- Subscription Fee: Mike pays $299/month for the Advanced Shopify plan.
- Point of Sale Fees: For his brick-and-mortar store, Mike pays an additional $89/month for Shopify POS Pro.
- Payment Fees: Using Shopify Payments, Mike pays an average of 2.7% + 0¢ for in-person transactions and 2.9% + 30¢ for online transactions.
- Integrated Tax Solution Fees: After crossing $100,000 in sales, Mike pays a 0.35% fee for Shopify's tax calculation services.
Scenario 4: Enterprise-Level Business Going Global
Sophia's fashion brand is a hit worldwide. She opts for Shopify Plus and sells to international customers, handling duties and taxes at checkout.
- Subscription Fee: Sophia pays $2,000/month for Shopify Plus.
- International Commerce: Sophia uses Shopify's features to estimate and collect duties and import taxes at checkout, providing clarity to her international customers.
- App Fees: To manage her vast inventory and offer personalized shopping experiences, Sophia spends $200/month on advanced third-party apps.
- eMail Fees: Sophia runs regular email marketing campaigns using Shopify Email, incurring additional costs based on the number of emails sent.
How to Calculate Shopify Fees
Paying annual Shopify fees can be complicated. When you're running a store, many expenses need to be taken into account. There is a fee for opening a store, selling products, and shipping them.
You also have to consider the cost of credit cards and other costs involved in managing your business, such as office supplies, insurance, etc.
Use Shopify's Custom Price Calculator to determine the fees for customised products. This calculator is designed to help you estimate your fees based on your specific needs. However, it costs $14.99/month.
Previously on the blog we’ve suggested a few free methods for calculating all these Shopify complicated fees. These tools will help you set up proper pricing structures to match your business requirements and get the most out of your online store.
How to Reduce Shopify Seller Fees: 5 Tips
Pair Automation Tools like Link My Books with Quality Software
Link My Books is an automation tool that integrates with Shopify and helps in automating the accounting process.
By streamlining your accounting, you can save on accounting fees and reduce the chances of errors that might lead to overpayments.
Link My Books' true power can be unlocked when paired with Shopify accounting software like Xero or Quickbooks, so if you're not using powerfull software to aid your bookkeeping for Shopify then this is definitely something you should consider.
Xero
Xero is a cloud-based accounting software designed for small to medium-sized businesses. It offers a user-friendly interface with real-time financial insights, helping businesses manage their finances efficiently.
Features
- Real-time bank feeds and reconciliation
- Invoicing and quote management
- Comprehensive financial reporting and analysis
Integrating Shopify to Xero can streamline the accounting process for e-commerce businesses. With Shopify to Xero integration, merchants can automatically sync sales, expenses, and customer data. This ensures accurate financial records, reduces manual data entry, and allows businesses to focus more on growth and less on bookkeeping.
QuickBooks
QuickBooks is a widely-used accounting software tailored for small businesses and freelancers. It provides tools for managing invoices, tracking expenses, and generating detailed financial reports.
Features
- Easy invoice creation and customization
- Expense tracking and categorization
- Payroll and employee management
Connecting Shopify to QuickBooks enhances the e-commerce accounting experience. The integration allows for automatic transfer of sales data, inventory levels, and customer information from Shopify to QuickBooks. This seamless connection ensures up-to-date financial insights and reduces the chances of errors in accounting records.
Make sure to consider Link My Books for one of the best Shopify to QuickBooks integrations
Opt for Annual Billing
Shopify offers a 10% discount if you choose to pay for your subscription annually. This can lead to significant savings over the year, especially if you're on one of the higher-tier plans.
Use Shopify Payments
By using Shopify Payments as your primary payment gateway, you can avoid the additional 2.0% transaction fees that Shopify charges for using third-party payment providers.
Monitor and Limit App Usage
While third-party apps can enhance your store's functionality, they often come with monthly fees. Regularly review the apps you're using and remove any that aren't essential to your operations.
Leverage Free Themes and Templates
Shopify offers a range of free themes that are both professional and mobile-responsive. Instead of purchasing a premium theme, consider starting with a free one and customizing it to fit your brand.
How Often are Shopify Fees Updated or Changed?
Shopify fees, like most platform fees, can change based on market conditions, platform enhancements, or shifts in strategy.
Historically, significant fee changes have been infrequent, but it's always a good idea for merchants to regularly check Shopify's official pricing page or subscribe to their updates for any announcements.
In Sum, How Much Does Shopify Make on a Sale?
The amount Shopify makes on a sale varies depending on the seller's chosen plan, payment gateway, and any additional services or apps they use.
Typically, Shopify earns from the monthly subscription fee, a percentage of the transaction (if not using Shopify Payments), and any other additional fees like those from apps or special features.
Overall Financial Pros to Selling on Shopify
Transparent Pricing
Shopify's pricing structure is straightforward, with clear distinctions between different plans and associated fees. This transparency allows merchants to easily calculate their potential costs.
No Additional Fees with Shopify Payments
Merchants using Shopify Payments can avoid extra transaction fees, leading to more profits from their sales.
Scalability
With a range of plans from Basic to Shopify Plus, the platform caters to businesses of all sizes, allowing merchants to upgrade as their sales volume increases.
Overall Financial Cons to Selling on Shopify
Additional Fees with Third-Party Payment Providers
Merchants not using Shopify Payments are subject to an additional transaction fee, which can add up over time.
Costs Associated with Apps
While apps can enhance a store's functionality, they often come with additional monthly fees. These costs can accumulate, especially if a merchant uses multiple paid apps.
Premium Themes and Features
While Shopify offers free themes, many merchants opt for premium themes or custom designs, which come with added costs. Additionally, some advanced features are only available on higher-tier plans, necessitating a more expensive subscription.
Do You Need a Business Accountant for Shopify?
You’ll be able to spend more time expanding your business instead of dealing with the hassles of setting up and managing your own Shopify store.
A Shopify accountant will provide you with tax guidance, especially if you’re a UK business owner.
You could also reduce costs by outsourcing your bookkeeping and accounting requirements to a Shopify accountancy company.
We recently wrote an article with guidelines about choosing the correct Shopify reports for bookkeeping so you could always give the bookkeeping a go yourself first but hiring an accountant is pretty much a given when running an e-commerce business.
FAQs about Shopify Fees
How do I avoid fees on Shopify?
You'll automatically save on the transaction fee by activating Shopify Payments and Shopify checkout.
Why do so many Shopify stores fail?
Many Shopify stores fail because the owner lacks experience in running a business. Other reasons include little e-Commerce and digital marketing knowledge and a poor product line.
Does Shopify charge a monthly fee?
Yes, Shopify charges a monthly fee to run your store. The initial Shopify setup fee is $5 per month.
Final Words
Selling on Shopify is a great way to grow your own brand online and be in control of your customer base, unlike selling on marketplaces such as Amazon, eBay or Etsy where you’re essentially operating under their rules
With that comes a more complex fee structure, but that doesn’t mean you should be put off. Link My Books works with thousands of Shopify store owners who are running very profitable businesses and who use Link My Books to ensure that they know that.
With Link My Books doing all the hard work for you in terms of bookkeeping, you can focus on growing your store on Shopify and benefit from accurate financials so that you make better business decisions and ensure that you’re paying the correct taxes too.
Features and Benefits of Link My Books
Link My Books is a popular accounting software solution for Shopify sellers. Here are some of its key features and benefits:
Seamless Integration with Shopify
Link My Books seamlessly integrates with the Shopify platform to provide real-time data synchronization. This streamlines your operations and avoids manual data entry or discrepancies between systems. Link My Books offers comprehensive integration between Shopify and Xero. We also know that there are many QuickBooks lovers out there too and we’ve ensured that linking Shopify and QuickBooks is seamless.
Comprehensive Financial Management
Link My Books offers comprehensive financial management capabilities specifically designed for eCommerce businesses. Features such as inventory tracking, order management, and sales reporting help you effectively manage your finances.
User-Friendly Interface
Link My Books boasts a user-friendly interface that doesn’t require extensive training or technical expertise to navigate and operate effectively. This makes it easy for you to manage your finances without any hassle.
Time-Saving Automation
Link My Books automates many time-consuming tasks, such as reconciling transactions and generating reports. This saves you time and allows you to focus on growing your business.
Simplify your Shopify Fees Calculations in 60 seconds
Tired of manually crunching numbers and getting lost in the maze of Shopify fees? We've got you covered. With our intuitive tool, you can get a clear breakdown of all your Shopify costs in just 60 seconds.
Don't let complex calculations hold you back.
Start a Free Trial to see just how much time & money can you save with Link My Books!
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