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Ways You Are Overpaying For Shopify Without Realizing It

Published on: December 9 2022 by MyWifeQuitHerJob Ecommerce Channel

Ways You Are Overpaying For Shopify Without Realizing It

Ways You Are Overpaying For Shopify Without Realizing It

when it comes to starting your own
online store shopify is one of the best
ecommerce platforms out there but the
main problem with shopify is that it can
be hard to decide which shopify plan to
go with or how much it really costs when
you factor in the cost of third-party
apps now the right shopify plan for your
online store depends on a variety of
factors which include your monthly
revenue your required feature set and
your customization needs now this video
will enumerate all the costs and
benefits for each shopify plan and
prevent you from wasting money on
unnecessary features and my ultimate
goal here is to help you understand how
much shopify costs and choose the
cheapest possible shopify pricing plan
that meets your minimum requirements
now the first question i always get
asked is is shopify free shopify is not
free but they do offer a 14 day free
trial and during this free trial you can
build an online store and have access to
all their tools however in order to take
transactions online you have to sign up
for a paid plan and right now shopify
offers five plans there's shopify lite
and nine bucks a month shopify basic at
29 a month shopify regular at 79 a month
shopify advanced at 2.99 a month and
shopify plus which costs over 2 000 a
month
now which shopify plan should you choose
now the following table here is actually
taken directly from shopify's website
and enumerates all the features for each
pricing plan
if you look at this table you notike a
couple things first of all the shopify
lite plan and the shopify plus plan are
missing and the reason is because the
shopify plus plan and the lite plan have
very specific use cases which i'll
discuss in depth later on this video
second of all there's actually very
little difference between the basic
regular and advanced plans outside of a
couple of features and processing fees
so as a result your decision between
shopify basic regular and advanced
primarily depends on your monthly sales
volume and how much you value the extra
features versus paying for third-party
apps
alright so here are the features
available on all shopify pricing plans
now they all offer abandoned cart
recovery and abandoned cart recovery is
a feature where your shopping cart
automatikally reaches out to customers
who abandon their cart and convince them
to complete their purchase
now shopify's built-in abandoned cart
recovery feature is extremely limited
because it only allows you to send a
single email to customers and
realistikally any serious ecommerce
store owner will use a third-party
abandoned cart recovery solution like
clayview
all shopify plans also offer a point of
sale solution as well
shopify pos or point of sale is their
point of sale solution that allows you
to access in-person payments at pop-ups
markets fairs and trade shows and then
finally all shopify plans offer a free
ssl certificate
discount codes real-time carrier
shipping quotes and unlimited products
now let's tok about the plans if you
have a website and you want to sell just
a couple of products then shopify lite
is for you and it's nine bucks a month
so if you run a popular blog or an
existing website and simply want to just
add the ability to sell a couple
products here and there then the light
plan is for you the light plan costs
nine bucks a month it allows you to sell
on facebook and on your own site through
the use of custom buy buttons now the
important thing to realize about shopify
lite is that this plan does not provide
you with an online store website in fact
the lite plan is only for people who
already have their own website and would
like to accept transactions online so
for example if i want to sell widgets on
mywifecritterjob.com
i might want to sign up for the shopify
lite plan so i can include buy buttons
on my blog to sell my products now if i
had a popular facebook page or group i
might want to sign up for shopify lite
to sell directly on facebook so bottom
line the shopify lite plan is only for
people who already have a website and
would like to accept transactions online
and in addition to the nine dollars a
month fee you'll also have to pay 2.9
percent plus 30 cents in credit card
transaction fees if you use shopify
payments now if your online store makes
less than 16 333 dollars per month go
with shopify basic and for more stores
out there the basic plan makes the most
economical sense until you start
generating more than sixteen thousand
three hundred and thirty three dollars
in monthly revenue now here's how to
calculate the break-even point the basic
shopify plan charges 2.9 percent plus 30
cents in credit card transaction fees
whereas the main shopify plan charges
2.6
plus 30 cents in credit card transaction
fees that is a difference of 0.3 percent
on fees now the main shopify plan costs
79
whereas the basic shopify plan costs
only 29
a difference of 50 bucks now to make up
for that fifty dollar difference in cost
you have to process fifty dollars
divided by point three percent or
sixteen thousand three hundred thirty
three dollars to break even in terms of
credit card fees
now feature wise the one major
difference between the main shopify plan
and the basic plan is that the main plan
offers gift cards and an advanced report
builder now at first glance the lack of
gift card capability sounds like a deal
breaker but there's actually many
shopify third-party apps that will
implement this functionality for you so
for example the bold discount app offers
a very powerful discount engine for only
15 a month
now while the professional reports you
get with the main plan are useful they
alone do not justify the added fifty
dollar cost of the main plan now if your
online store makes between sixteen
thousand three hundred and thirty three
dollars a month and a hundred and ten
thousand dollars a month go with the
shopify main plan in fact feature wise
there's almost zero reason to sign up
for the advanced shopify plan until you
exceed 110 000 a month now if you look
at the main shopify plan you literally
get 99 of the features of the advanced
shopify plan for only 79 bucks which
makes this plan the sweet spot for most
six and seven figure store owners now
the only reason it's time for the
advanced shopify plan at this revenue
tier is if you require more than 15
staff accounts but realistikally a store
at this level you're not going to have
15 employees if you aren't using shopify
payments then shopify charges you a
credit card transaction fee which are
drastikally reduced on the advanced
shopify plan so instead of paying one
percent in extra fees on the basic plan
you only get charge point five percent
if you want to show calculated shipping
rates at checkout then go with the
advanced plan but in my experience
showing the exact shipping rate during
checkout is overrated but for some
businesses it might be important
now if your online store makes between
110k a month and 680k per month go with
the shopify advance plan now the
advanced shopify plan offers the lowest
credit card transaction fees of all the
main plans including a couple of extra
nice to have features so for example at
this revenue level you're probably
already handling your shipping via a
third-party vendor like ship station or
shipping easy as a result it might be
nice to show you calculated rates during
checkout instead of using a table rate
or a flat rate solution now if you don't
have a bookkeeper or an analytiks member
on your staff shopify's advanced reports
will come in handy for projecting your
future revenue but outside of that you
should just stik with the advanced
shopify plan until you hit 680k a month
in revenue or if you require the
advanced feature set of shopify plus
if your online store makes over 680k per
month go with shopify plus just for the
savings on credit card transaction fees
alone at this tier your credit card
processing fees plummet to only 2.15
which is on par with what you can get
with a regular merchant account and
gateway combo but outside the pure
transaction fee savings shopify plus
also offers you a host of advanced
features that are extremely useful and
unique to plus users so for example you
get multiple online stores now this
feature is very convenient if you sell
in international markets and with
shopify plus you can have up to 10
stores at no additional cost where you
can tailor the products and the content
to whatever country you're selling into
you also get access to shopify's
launchpad tool
launchpad is a tool that's only
available to plus members that yes users
automate common ecommerce tasks related
to promotions and sales so for example
you can automatikally adjust your prices
during a promotional campaign based on
specific product parameters you can set
complex rules for discounts such as free
gift with purchase or free shipping
based on the type of product ordered you
can also set a start and end time for a
special sale and automatikally change
your theme with special colors images
and immediately revert it back after the
campaign is over meanwhile shopify
allows you to monitor your launch
campaigns in real time with their event
dashboard
you can also sell wholesale with shopify
plus one of shopify's glaring weaknesses
is the ability to offer special
wholesale pricing to select customers
but shopify plus adds this capability
out of the box
now the shopify plus wholesale channel
allows you to create a separate shopify
store specifically for your wholesale
customers that is an extension of your
existing website now especially if you
sell in retail locations you can
effectively streamline your sales
channels and merge your inventory
tracking for your entire operation now
you have full control with shopify plus
one of the biggest advantages of using
shopify is that you don't need to know
how to code your own website but once
your store reaches a certain size you'll
probably have customization needs that
extend beyond the regular shopify plan
so for example regular shopify plans do
not allow you to alter the checkout
experience but shopify plus customers
can create any custom checkout
implementation that they want
you also get access to shopify flow and
in my opinion access to shopify flow is
probably the biggest benefit to
upgrading to shopify plus aside from the
cost benefit now what is shopify flow
well shopify flow is shopify's backend
automation platform that allows you to
set up custom workflows so for example
let's say i want to automatikally track
and tag specific customers who purchase
widget a and b together well with
shopify flow you can easily set up an
automated workflow to tag these
customers and then use this data to
generate highly segmented reports or to
set up facebook custom audiences you can
also export these customers into special
segments for your email marketing
provider now another popular use case
for shopify flow is to automatikally
implement loyalty and retention
discounts by segmenting customers with
tags based on their lifetime spend
amount you can even use shopify flow to
send a staff member a slack message
whenever a high ltv customer is shopping
in your store so overall shopify flow
allows you to take specific actions
based on internal events that run in
your store and the possibilities are
endless now one of the most common
questions i get asked is what is the
cost of shopify payments now
one of the perks of signing up for any
shopify plan is that they give you the
ability to process credit card payments
right out of the box without the need
for a third party provider now their
credit card payment solution is now
called shopify payments and it's very
convenient for new online store owners
however the downside to shopify payments
is that it's a lot more expensive than
almost every third-party credit card
processor out there so for example a
store that makes 10k a month can
probably get a 2.2 credit card
processing fee from authorized.net
whereas shopify charges credit card
processing fees of 2.9
now if you can find cheaper credit card
rates elsewhere then why would you stik
with shopify payments well the main
reason is because shopify charges
transaction fees if you use an external
payment gateway provider their
transaction fees start at two percent
for the basic shopify plan and drops
down to 0.5 percent on the advanced
shopify plan so
bottom line shopify essentially forces
you to use their payment processing
platform
now the other question i'm commonly
asked is what is the cost of shopify
apps and the unfortunate reality is that
the basic shopify shopping cart has very
few features out of the box so as a
result most users end up paying
additional shopify costs for third-party
apps that extend shopify's functionality
now the majority of apps in the shopify
app store carry a monthly recurring fee
and these costs must be taken into
account when you calculate the overall
price of shopify in fact it's not
unusual for e-commerce store owners to
pay hundreds of dollars per month for
apps on top of their basic shopify plan
and my advice to you when it comes to
buying apps on the shopify app store is
to only pay for apps that definitively
contribute to your bottom line
here's just some other shopify costs
even though shopify handles most of the
heavy lifting for your online store
website there are a couple additional
costs that you have to worry about on
any shopify plan for one thing shopify
does not provide you with a free domain
and to register your domain shopify will
charge you nine dollars per year but in
general you should host all of your
website domains at a neutral third-party
registrar like godaddy namecheap or
google domains
in addition no shopify plan provides you
with the capability to send email from
your own custom domain out of the box
either instead if you want to send email
under your owndomain.com
you'll need to sign up for an email
provider like zoho mail or g suite now
the million dollar question is is
shopify worth it well shopify is worth
the money if you want to start an online
store that can potentially scale to
seven eight or even nine figures because
shopify is just so popular they have an
army of third-party developers who are
constantly adding new functionality in
apps and as a result shopify is always
on the cutting edge of ecommerce now if
you need a feature for your store
there's probably already an app that
does what you need now while shopify is
expensive compared to other e-commerce
platforms they are the leaders in the
space with a huge war chest of
engineering talent and cash
now if you want to save money on shopify
here's what you need to do the easiest
way to save money on any shopify plan is
to pay for a year upfront versus paying
month to month shopify does not
advertise this on their website but you
can save up to 25
if you choose to pay for three years in
advance in fact here's how the discount
typically works you can save 10 if you
pay for a year in advance you can save
20 if you pay for two years in advance
and you can save 25
if you pay for three years in advance
now if you plan on stiking with shopify
in the long run then it's in your best
interest to pay for as much upfront as
you possibly can now if you're on a
month-to-month plan you can cancel at
any time but it will be significantly
more expensive so i'm now going to
answer some of the most commonly asked
questions i get about shopify how much
does a typical shopify plan cost
including apps now i've already covered
the cost of the different shopify plans
basic regular advance and plus
however the cost of your shopify plan is
often just a small fraction of the total
cost of running shopify because of third
party apps now the total number of apps
that your store will need will vary
depending on the nature of your products
and your e-commerce store but the
majority of the students making at least
five figures per month in my creative
profitable online store course pay over
150 a month on apps alone
the other question i get asked is is
shopify plus worth it because it costs
two thousand dollars a month minimum
well it can be worth the money if your
store makes at least seven figures in
annual revenue in general it makes sense
to upgrade to shopify plus if you make
over 680k per month just for the credit
card processing savings alone however if
you're making between 110k and 680k per
month your decision to use shopify
versus shopify plus will depend on the
features that you need
now overall shopify's pricing plans can
get quite confusing if you don't have
any hands-on experience with the
platform and in practike it's in your
best interest to stay on the cheapest
shopify plan possible until your credit
card rate savings exceed the cost of the
next higher plan
now outside of the shopify plus tier the
features you get for each hire plan are
mostly a non-factor
after all most of the extra
functionality with shopify will be
gained from paying for third-party apps
now the base shopify cart will never do
everything you want it to do so you'll
end up having to pay for apps no matter
what hope you enjoyed this video now if
you like what you saw there's actually a
lot more where that came from if you
subscribe to my channel below and if you
are interested in learning how to sell
physical products online then click over
here and take my free six day mini
course where i'll walk you through
everything that you need to know to get
started in e-commerce thanks for
watching

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