Does Shopify Take a Cut?

Indeed, Shopify does charge a percentage of sales made through its platform, but the percentage is not excessively high. Merchants need not be overly concerned about this fee.

It’s important to understand that Shopify does not take a percentage of your sales directly on the platform. Instead, you are required to pay based on the pricing plan you have selected from the beginning.

While Shopify does take a percentage of your store’s sales, the specific percentage depends on the payment plan you choose.

Merchants using Shopify, a popular e-commerce platform from Canada, have the option to select from three different pricing plans.

It’s worth noting that the higher your chosen payment plan is, the lower the percentage Shopify charges. Therefore, it is crucial to choose the appropriate Shopify payment plan for your store.

According to Shopify’s pricing plans, here are the transaction fees for online credit card rates:

• Merchants on the Basic Plan experience a deduction of 2.9% + 30 cents from each online transaction.
• Shopify Plan users are subject to a fee of 2.6% + 30 cents per transaction.
• Shopify Advanced members pay a fee of 2.4% + 30 cents.

To avoid additional fees, it is recommended to use Shopify Payments when paying for these types of plans.

It’s important to note that using a credit card for payment will incur extra fees, and if you do not use Shopify Payments, each sale you make will also be charged separately. Therefore, it is better to utilize Shopify’s payment system to avoid these additional costs.

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What are Shopify’s Different Plans?

To be honest, Shopify is not the most affordable eCommerce builder available in the online market, but it has gained a strong reputation for being highly trusted and reliable.

Shopify is a prominent player in the eCommerce industry, holding nearly 20% market share worldwide.

The company is dedicated to continuous improvement and has experienced substantial revenue growth, almost doubling since 2013.

One notable aspect of Shopify’s pricing plans is that they offer competitive rates, allowing merchants to find a plan that suits their specific needs and budget.

Shopify provides a range of pricing plans, each with its own price point and set of features.

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Basic Plan:

This plan encompasses all the fundamental features necessary to launch a new business and is the most popular choice among merchants.

Despite its affordability in terms of monthly rate, the Basic Plan has the highest percentage deducted from your sales.

Here are the pricing details:

• Subscription fee: $29/month
• Online credit card rate: 2.9% + 30 cents USD
• In-person credit card rate: 2.7% + 0 cents USD
• Additional fees for using services other than Shopify Payments: 2.0%

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Shopify Plan:

The Shopify Plan provides all the essential features for a growing business.

In addition to lower fees, this plan grants access to more advanced functionalities.

With the Shopify Plan, you can benefit from more admin accounts, customizable reports, and the ability to utilize gift cards and recover abandoned carts.

Here are the pricing details:

• Subscription fee: $79/month
• Online credit card rate: 2.6% + 30 cents USD
• In-person credit card rate: 2.5% + 0 cents USD
• Additional fees for using services other than Shopify Payments: 1.0%

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Advanced Plan:

The Advanced Plan is the most expensive option available for merchants.

This plan is best suited for businesses approaching the enterprise level.

One of the advantages of the Advanced Plan is the minimal transaction fees, set at only 2.4% + 30 cents.

Moreover, this plan offers the most advanced reporting features and enables super-fast shipping.

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Here are the pricing details:

• Subscription fee: $299/month
• Online credit card rate: 2.4% + 30 cents USD
• In-person credit card rate: 2.4% + 0 cents USD
• Additional fees for using services other than Shopify Payments: 0.5%

While the regular Shopify plans cater to eCommerce companies that have recently started or primarily focus on inventory management and competitive payment processing fees, Shopify also provides a Plus plan. The Plus plan is significantly more expensive and serves as a better choice for larger companies.

In addition to these plans, Shopify also offers a Lite plan at $9/month, which does not have transaction fees, and a Plus plan priced at $2,000/month, which is customizable to meet the specific needs of larger companies.

While Shopify may not be the most cost-effective option, it remains a highly trusted and reputable eCommerce platform, providing competitive rates and a wide range of features for merchants to choose from.

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What is Shopify Plus?

Shopify Plus offers enhanced flexibility, increased support options, and greater access to the underlying code of your store.

By opting for Shopify Plus, businesses can establish up to 20 locations, providing ample room for multiple stores and warehouses, which is particularly beneficial for larger enterprises.

With the inclusion of multichannel analytics, Shopify Plus merchants can effectively monitor data from all their channels and gain insights into their interconnections. This comprehensive data analysis spans across various aspects, such as orders, inventory, customer interactions, and more.

This plan is particularly suitable for businesses seeking a comprehensive solution that seamlessly integrates with shipping fulfillment and enables comprehensive analytics for omnichannel sales.

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What is Shopify Lite?

The Shopify Lite plan is an excellent choice for quickly creating a simple ecommerce store at a low cost.

Priced at only $9 per month, the Shopify Lite plan is the most affordable option among Shopify’s offerings, even undercutting other ecommerce platforms.

Notably, Shopify does not take any percentage of your sales with this plan.

Instead, it provides a straightforward method to add a “Buy” button to your existing web pages and blogs. If you already have a website, Shopify Lite offers a cost-effective way to start selling products.

The core features of Shopify Lite include an overview dashboard, finance reports, customer profiles, order and product management, mobile point-of-sale (POS) capabilities, email carts, QR code product details, in-store inventory management, gift cards, split billing, custom discounts, and discount codes.

It’s important to note that Shopify Lite does not provide a complete online store with a shopping cart, which sets it apart from other Shopify plans. Instead, it integrates seamlessly with your existing website or social media pages. For example, if you have a WordPress blog and want to sell customized products, you can use the Shopify Lite plan to effortlessly incorporate the products you wish to sell while maintaining your blog.

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With Shopify Lite:

• You can sell an unlimited number of products on your current website.
• It enables you to sell on various platforms, including Facebook, Instagram, eBay, and more.
• Shopify can be used as a point-of-sale (POS) system for selling products in physical locations such as market stalls, concerts, and retail outlets.

When comparing Shopify Lite to the regular pricing plans, it’s important to consider that the regular plans offer a complete online store experience with shopping cart functionality, whereas the Lite plan focuses on website integration.

The Shopify Lite platform is best suited for merchants who:

• Want to integrate ecommerce or dropshipping features into an existing website.
• Aim to start selling on Facebook or other platforms like Instagram and eBay.
• Need a convenient solution to address VAT MOSS (Mini One Stop Shop) issues.
• Require a platform for accepting payments and managing inventory at events and markets.

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Choose the Right Shopify Payment Plan for Your Store

To summarize, it is true that Shopify charges a percentage for selling products online, but it is important to note that the transaction fee is relatively small.

While this may initially appear to be a drawback compared to other payment platforms that charge a lower percentage, considering the long-term costs and benefits, Shopify surpasses competing platforms in terms of the comprehensive features and advantages it offers for running an e-commerce store.

In essence, Shopify provides an excellent solution for launching an online store without requiring extensive technical knowledge or expertise.

An added benefit is that Shopify offers a free trial, allowing users to explore the platform and its features before committing. Additionally, the free trial includes extra resources such as the dropshipping starter kit and various marketing materials, enhancing the overall value for merchants.

Frequently Asked Questions

Is Shopify Free?

Shopify is not a free eCommerce platform, but it does offer a 14-day free trial. During this trial period, you have the opportunity to create your store and make it accessible to the public.

Does Shopify Have Transaction Fees?

Shopify does not impose transaction fees on stores that utilize Shopify Payments as their payment gateway. However, there are still payment processing fees that apply and differ based on the selected pricing plan. If you opt for a third-party payment provider instead of Shopify Payments, Shopify will add an extra transaction fee of 2%, 1%, or 0.5% on the Basic Shopify, Shopify, and Advanced Shopify plans, respectively, in addition to the payment processing fees imposed by the provider. Hence, to avoid transaction fees, it is advisable to utilize Shopify Payments.

Can I Skip the Shopify Fees?

No, it is not possible to use Shopify for free indefinitely. The platform offers a free trial period of 14 days, during which you can explore and set up your store. However, once the trial period ends, you are required to select and subscribe to one of the available pricing plans in order to continue using the Shopify platform.

When should I consider switching between Shopify plans?

You can initially start with the Basic plan and as your business grows and you require features like inventory management across multiple locations, it may be beneficial to upgrade to higher-tier plans.

The Basic plan allows access to up to 4 locations, while the Shopify plan offers access to up to 5 locations, and the Advanced plan provides access to 8 locations. It’s important to note that as you upgrade to higher plans, the percentage that Shopify charges from your sales decreases.

Which Shopify plan is most suitable for a new store?

For new merchants, the Basic plan is typically the best choice. It is priced at $29 per month and incurs a transaction fee of 2.9% + 30¢ per transaction. The Basic plan offers all the essential features and an e-commerce website needed to establish and grow an online store.

What sets Shopify and Shopify Plus apart?

The differences between Shopify and Shopify Plus depend largely on your budget and preferences. If you prefer cost-efficiency and value having control over your operations, Shopify is likely the better option. However, if budget is less of a concern and you desire more options, greater access to your store’s code, and enhanced support, upgrading to Shopify Plus could be worth considering.