Table of Contents
Is Shopify Really Free? The Real Cost of Using Shopify in 2024
Shopify has become one of the most popular ecommerce platforms, with over 1 million businesses using it to power their online stores. One of the main draws of Shopify is its free plan, which allows you to try out the platform before committing to a paid subscription. However, the free plan comes with some major limitations, and many Shopify users find they need to upgrade to a paid plan to unlock the platform’s full capabilities. In this blog post, we’ll take an in-depth look at what you actually get with a free Shopify account versus a paid subscription, and the true costs of using Shopify in 2024.
The Shopify Free Plan – What’s Included?
The Shopify free plan, called the Shopify Basic Shopify plan in the UK, allows you to create an online store and sell up to 3 products. With the free plan, you get access to:
- The core Shopify store builder and admin dashboard
- Unlimited bandwidth and storage
- Free SSL security certificate
- Shopify POS for in-person sales
- Abandoned cart recovery
- Shopify Payments payment processing
This free plan is great for beginners who want to test out the Shopify platform and build a simple online store. However, there are some major limitations:
- You can only list 3 products in your store
- You cannot use a custom domain – your store URL will be yourstorename.myshopify.com
- Limited shop customization options
- No access to advanced features like shipping and discount codes
Overall, the Shopify free plan allows you to get a feel for the platform, but doesn’t provide enough capabilities for a fully-fledged ecommerce business. To unlock Shopify’s full functionality, most users need to upgrade to a paid subscription.
How Much Real Cost of Using Shopify in 2024? Paid Plan Pricing
Shopify has four paid subscription plans, each offering progressively more advanced features and support. Here’s an overview of Shopify’s paid pricing in 2024:
1. Basic Shopify Plan ($29/month)
The Basic Shopify plan costs $29 per month, billed annually at $290/year. This plan lifts some of the major limitations of the free version:
- Unlimited products and SKUs
- Access to Shopify POS and channels
- Fraud analysis and manual order editing
- Abandoned cart recovery
- 24/7 support via email
The Basic Shopify plan is a good option for new ecommerce businesses with a small inventory. However, you still don’t get access to advanced features like shipping discounts or gift cards.
2. Shopify Plan ($79/month)
This is Shopify’s most popular plan, offering advanced functionality like:
- Advanced report building
- International pricing options
- Shipping label creation
- Discount codes
- Professional reporting
At $79/month billed annually, the standard Shopify plan unlocks ecommerce features required by most growing online businesses.
3. Advanced Shopify Plan ($299/month)
Serious ecommerce stores that process a high volume of orders should consider the Advanced Shopify plan. This plan costs $299 per month billed annually, and includes:
- Advanced reporting and analytics
- Advanced fraud analysis
- 3rd party calculated shipping rates
- Location-based shipping prices
- Abandoned cart recovery app credit
The Advanced Shopify plan is tailored for stores doing over $800,000 in annual sales. It has the features needed to optimize and scale a high-volume business.
4. Shopify Plus (Custom Quote)
For enterprise-level ecommerce businesses, Shopify offers its Shopify Plus plan. This customized plan includes:
- Dedicated account manager
- API-driven functionality
- Volume discounts
- Advanced fulfillment tools
- Customizable checkout
Shopify Plus pricing starts at $2000/month, but is tailored based on your business’s specific needs via a custom quote. This plan is intended for companies doing over $1 million in annual online sales.
Additional Transaction Fees
In addition to the monthly subscription costs, Shopify charges transaction fees for businesses using Shopify Payments, their integrated payment processor.
Here are the Shopify Payments transaction fees:
- 2.9% + 30¢ for in-person credit card rates
- 2.6% + 30¢ for online credit card rates
- 2.9% for Shop Pay installments
- 1% for international cards
So if your online store processes $50,000 per month in sales via Shopify Payments, you would pay an additional $1,300 in transaction fees (2.6% of $50,000).
You can avoid these transaction fees by using an external payment processor like Stripe or PayPal instead of Shopify Payments. But Shopify charges an additional fee for using external processors:
- 2% fee for using third-party payment processors
This means the transaction fees on Shopify can add up quickly for high-volume merchants. Make sure to calculate these costs when budgeting for your Shopify store.
Unveiling the Financial Landscape: Real Costs of Using Shopify in 2024
In the fast-paced world of ecommerce, the financial implications of platform selection are critical to success. “Real Costs of Using Shopify in 2024,” speaking the universal language of the pragmatic decision-maker. In 2024, Shopify remains a dominant force in ecommerce, but understanding what it will cost a merchant to operate on this platform is instrumental to the business just starting their ecommerce journey. Subscription plans, transaction fees, and the additional expenses of apps make up the pricing structure of the platform. Businesses must weigh those costs against its many benefits that include an easy to use interface, a wide selection of customizable themes, and a vast array of robust third-party integrations. In its spirit of transparency, Shopify offers a thorough breakdown of the costs a merchant can anticipate given their expected sales volume.
How Much Does Shopify Take Per Sale?
Between subscription costs, transaction fees, and app purchases, Shopify does take a cut of the revenue generated by your online store. The exact percentage Shopify takes varies based on your sales volume, average order value, and more.
But generally, Shopify takes between 2% to 5% of your overall revenue. Here’s a breakdown:
- 2.6% – 2.9% for payment processing fees if using Shopify Payments
- 2% for using a third-party payment processor
- 0.5% to 1% for any additional app costs and services
So for example, if your Shopify store sells $100,000 per month, Shopify would take roughly $2,600 to $5,000 per month in fees and costs.The key is maximizing your profit margins and average order value so that Shopify’s percentage cut remains minimal compared to your net profits. For some merchants, the costs are well worth it for everything Shopify provides. But you need the math to work for your specific business.
Can You Use Shopify for Free Without Paying?
Technically yes, Shopify allows anyone to create a free account and basic online store. The Shopify free plan has no time limits, so you can use Shopify for free indefinitely.However, there are hard caps on product listings, store customization, and other features that prevent any serious ecommerce merchant from relying on the free plan long-term. You’ll quickly find the limitations of the free plan too restrictive.
The only viable way to “use Shopify for free” would be if you:
- Only sell 1-3 products
- Don’t need a custom domain
- Don’t require shipping, discounts, etc.
For the vast majority of online businesses, the free plan simply won’t provide enough ecommerce functionality. Upgrading to at least the $29/month Basic Shopify plan is recommended for any merchant doing more than a few sales per month or selling more than a handful of products.So in theory yes, Shopify is free to use forever. But in reality, any successful online store will outgrow the very limited free plan quickly and will need to upgrade. There’s no long-term way to use the full Shopify platform entirely for free.
Is Shopify Worth the Cost in 2024?
Given the monthly and transaction costs, is Shopify ultimately worth it for your online business? Here are a few factors to consider:
Consider your total revenue. If you’re only expecting $1,000 in monthly sales, a $79 Shopify subscription is hard to justify. But if you’re anticipating $50,000+ per month in revenue, Shopify becomes very affordable.
Compare to other options. The costs of Shopify are on par or lower than other popular ecommerce platforms. Shopify is very competitively priced for everything it provides.
Factor in time savings. By using Shopify instead of building your own store, you save an enormous amount of development and maintenance time and effort. For many businesses, this time savings alone is worth the costs.
Calculate your profit margins. As long as your margins and order values can absorb Shopify’s fees, the overall profits justify the costs for most serious merchants. Do the math for your specific business.
Remember the value. Shopify isn’t just software – it’s an entire ecosystem for managing, marketing, and optimizing an online business. For many store owners, Shopify is incredibly valuable despite its subscriptions and fees.So is Shopify worth it? For most serious ecommerce businesses selling more than a handful of products per month, the answer is usually yes.Shopify removes the technical burden of running an online store and provides powerful functionality that can greatly increase sales and revenue. Just make sure the numbers make sense for your specific business model and profit margins.
FAQ: What Else Should I Know About Shopify’s Costs?
Q1: Does Shopify charge monthly and take a % of sales?
A: Yes – Shopify charges both monthly subscription fees based on your plan, and also takes a percentage of sales through payment processing fees and other transaction costs.
Q2: What is the cheapest Shopify plan for a small store?
A: The Basic Shopify plan at $29/month is the cheapest paid option that lifts the major limitations of the free plan. It allows unlimited products and provides core ecommerce features.
Q3: Can I use an external payment processor to avoid fees?
A: Yes, you can use payment processors like Stripe or PayPal to avoid Shopify Payments’ transaction fees. However, Shopify charges an extra 2% fee for using external payment gateways.
Q4: Is Shopify cheaper than WordPress/WooCommerce?
A: Generally Shopify works out cheaper than self-hosted WordPress+WooCommerce once you factor in development costs, maintenance, security, and app integrations. But WordPress is better for advanced customization.
Q5: What happens if I stop paying for Shopify?
A: Your Shopify store will be closed and deactivated if you stop paying for a subscription. You would need to export your products, data, and domain then re-build the store elsewhere.
Q6: Can I negotiate lower Shopify fees?
A: Possibly – large-volume merchants may be able to negotiate custom rates or fee structures, especially on the Shopify Plus enterprise plan. But standard pricing is fairly fixed.
When evaluating if Shopify is worth the investment for your online business, there are a lot of factors to consider. Monthly subscription costs, transaction fees, and add-on app expenses do add up.But for most serious ecommerce merchants, Shopify provides tremendous value by simplifying the process of running an online store.The platform removes the technical burden of building and managing an ecommerce site, provides advanced functionality like shipping and promotions, and integrates with marketing and accounting tools.For small and large online retailers alike, the costs of Shopify are usually justified by the platform’s capabilities, ecosystem, and ability to scale revenue.
if you want to know how we can grow our clients business book a free consultancy with our experts.