Shopify Costs

A friend of mine recently asked “how much does it cost to run an online store using Shopify – what plan should I use?”

In terms of the Shopify cost, it basically boils down to what plan you are using. But there are other costs to consider when running an online store. Let’s break it down:

1. Shopify Hosting
The first cost to consider is the monthly hosting fee. Depending on which plan you choose (affiliate link), the cost to have Shopify host your store starts at $24/month at the time of writing. This covers the cost of hosting, upgrades to hardware and software, backups and other system administration tasks such as keeping hackers out, and provides unlimited bandwidth.

The plan you go with will primarily depend on how many SKUs (unique inventory items) you need, and how much revenue you expect. I have put together some scenarios at the bottom to help you choose.

2. Transaction Fees
Shopify takes a percentage cut of your total sale price. The rate starts at 2% for Basic, down to 0.5% for the Enterprise plan.

For example, if you are doing $3000/month in online sales you would be looking at $60/month if you were using the Basic plan.

3. 3rd Party Payment Processor
Paypal and Google Checkout are examples of what is known in the industry as “3rd Party Payment Processors”. They are convenient ways to get into the selling online because they are easy to setup. Fees vary depending on the monthly sales and where you are selling.

Paypal charges a percentage of total sale price, plus a transaction fee. For example, assuming $3000/month in sales and selling to the US domestically you would be looking at 2.9% + $0.30 per transaction. That equals $87 in fees and $18 in transaction costs (assuming each item costs $50, gives 60 transactions).

4. Merchant Account Fees
If you want to accept credit cards you are going to need to set up a merchant account, and will need a payment gateway. There are a bewildering array of choices here, but for the purposes of the scenarios below I am going to simplify things and assume a one time setup fee of $150 and an ongoing transaction fee of 3% of the total sale.

Scenarios
So without further ado, let’s sketch out some scenarios.

Scenario SKUs/Monthly Sales	Shopify Costs fixed monthly cost/transaction fee	Payment Costs 50/50 split between paypal and credit card purchases	Total Costs/Revenue %
Basic Plan
100/$3000	$24/$60	$43.50+$9/$30	$166.50/5.55%
100/$4000	$24/$80	$60+$12/$60	$236.00/5.90%
Professional Plan
2500/$3000	$60/$30	$43.50+$9/$30	$172.50/5.75%
2500/$4000	$60/$40	$60+$12/$60	$232.00/5.80%

The Bottom Line
Once you hit $3600/month in sales the total cost of the Basic and Professional plans is the same ($96), so in terms of what Shopify plan is best it basically it boils down to this: If you have less than 100 SKUs and you sell less than $3600/month then go with the Basic Plan, otherwise consider the Professional Plan.

Shipping Included?

Some stores sell products where some of the items have shipping is included. For example, you may have items from a drop shipping catalog in your inventory.

How do you set up Shopify to handle the shipping price? One way to do this is use a weight-based rule. The way it works is you set the weight to zero for the items in your shop that have the shipping included. You need to do this for each variant. You then create a rule in Admin for weight = 0.

One problem with this is that your theme may be displaying weights on various pages – typically the product page. There are two ways you could get around this.

1. The easiest one is simply update your product description with a paragraph that describes the weights of the variants.
2. The other more involved way would be to create a weight option, and customize your theme to use that value instead.

Of course, if your customers don’t need to know about product weights you can always just remove it from the theme.

Free Shopify Theme - Cheeser

Looking for a Shopify theme? Here is one for you, and I think you will like the price - free!

Check out Cheeser - the theme named after Christine's grumpy old cat. To install it, go to your Admin page, click on "Assets", then click on "Upload a Theme". There is no catch - this is a fully functional Shopify theme for free. We only ask that you consider using Shopify Concierge to help you get the most out of your Shopify store.

Demo

We've created a demonstration Shopify store that uses Cheeser: Pet Shop. Check it out and let us know what you think.

Want it Customized?

If you would like this or any other Shopify theme customized then please contact us. We would love to provide a quote for you. Not job is too big or too small.

License

This theme is licensed under the GPL, as per the terms of the original CSS Template this is based on.

Incidentally, if you see a template out there you want converted to Shopify... we can help with that

Support

Please email us if you find any problems. We will do our best to help fix any bugs.