Friday, November 22, 2024
Ecommerce

How much money do you need to sell on Shopify?

To start selling on Shopify, you’ll need at least:

  1. $5/month for the Starter plan or $39/month for Basic Shopify
  2. $14-$30/year for a custom domain (optional)
  3. $0-$350 for a theme (free options available)
  4. $0-$100/month for apps (many free options)

So the minimum to get started is around $5-$50 per month.

Additional costs to consider:

  1. Credit card fees: 2.9% + 30¢ per transaction
  2. Inventory costs
  3. Shipping fees

For a typical new store, budget $100-$200/month total. As your store grows, costs will increase but should remain 1-5% of revenue.

How much money do I need to sell on Shopify?

Are you thinking about starting an online store with Shopify but wondering “How much is a Shopify store going to cost me?” You’re not alone. Shopify pricing can seem complex at first glance, with multiple plans and fees to consider. But don’t worry – I’m here to break it all down for you in simple terms.

The short answer? Shopify prices start at just $5 per month for the Starter plan. But there’s a lot more to the story. Let’s dive into the details of Shopify’s pricing structure so you can figure out exactly how much you’ll need to budget for your new ecommerce venture.

Shopify’s Main Pricing Plans

Shopify offers 5 core pricing tiers:

  1. Shopify Starter: $5/month
  2. Basic Shopify: $39/month
  3. Shopify: $105/month
  4. Advanced Shopify: $399/month
  5. Shopify Plus: Starting at $2,000/month

But the monthly subscription fee is just one piece of the puzzle. There are also transaction fees, payment processing fees, and potential costs for apps and themes to factor in.

So how much does a Shopify store really cost when you add it all up? Let’s break it down further…

Transaction Fees: The Hidden Costs

While the monthly subscription is straightforward, transaction fees can really add up. How much does Shopify take per sale? It depends on your plan:

  1. Shopify Starter: 5% per transaction
  2. Basic Shopify: 2%
  3. Shopify: 1%
  4. Advanced Shopify: 0.5%

So for example, if you’re on the Basic plan and make $10,000 in sales, you’d pay $200 in transaction fees. That’s on top of your $39 monthly fee.

But wait – there’s a way to avoid these fees entirely. If you use Shopify Payments (Shopify’s own payment processor), they waive the transaction fees. Smart move, Shopify!

Credit Card Rates: More Fees to Consider

Even if you use Shopify Payments, you’ll still pay credit card processing fees:

  1. Basic Shopify: 2.9% + 30¢ per transaction
  2. Shopify: 2.6% + 30¢ per transaction
  3. Advanced Shopify: 2.4% + 30¢ per transaction

So how much is a Shopify store going to cost in total fees? Let’s look at an example:

Say you’re on the Basic Shopify plan ($39/month) and do $20,000 in monthly sales. Your fees would be:

  1. Monthly fee: $39
  2. Credit card fees: $580 + $60 = $640
  3. Total: $679 per month

As you can see, Shopify prices can add up quickly as your sales grow. But remember – more sales means more profit too!

Additional Expenses to Consider

Let’s break down some key additional expenses:

Apps: Extending Your Store’s Functionality

The Shopify App Store offers thousands of apps to enhance your store. But how much do these apps cost? Here’s a quick overview:

  1. Free apps: Many basic apps are free
  2. Paid apps: Typically range from $5-$250 per month
  3. One-time purchase apps: Usually $50-$1000

On average, most Shopify store owners spend about $20-$50 per month on apps.

Themes: Making Your Store Look Professional

Shopify offers both free and premium themes:

  1. Free themes: 9 options available
  2. Premium themes: Range from $150-$350 (one-time purchase)

While free themes can work well for beginners, many store owners opt for a premium theme to stand out from the competition.

Domain Name: Your Store’s Web Address

How much is a Shopify store’s domain name going to cost? You have two options:

  1. Use a free myshopify.com domain
  2. Purchase a custom domain through Shopify ($14-$30 per year)

Most professional stores opt for a custom domain for branding purposes.

So, what’s the total additional cost? Let’s look at a typical scenario:

  1. 2-3 paid apps: $40/month
  2. Premium theme: $180 (one-time)
  3. Custom domain: $14/year

This adds up to about $55 per month in additional costs for the first year, on top of your chosen Shopify plan and transaction fees.

Shopify prices can seem complex, but understanding these additional costs helps you budget accurately. Remember, investing in the right apps and design can boost your sales and offset these expenses in the long run.

How to Save Money on Your Shopify Store

Here are some smart strategies to reduce expenses and maximize profitability:

Start with a lower-tier plan

How much is a Shopify store on the Basic plan? Just $39 per month. As a new store owner, this plan likely has all the features you need to get started. You can always upgrade later as your business grows.

Use free apps and themes initially

While premium options are tempting, free apps and themes can work well for new stores. This alone could save you $50-$100 per month in the beginning.

Take advantage of Shopify Payments

Remember those transaction fees we talked about? By using Shopify Payments, you can avoid them entirely. This could save you hundreds or even thousands per month as your sales grow.

Look for app bundles

Some app developers offer bundles of multiple apps at a discounted price. This can be a great way to get more functionality for less.

Pay annually for discounts

Shopify offers a 10% discount if you pay for your plan annually instead of monthly. On the Basic plan, this saves you $46.80 per year.

Real-World Example

Let’s look at how these savings add up for a new store on the Basic Shopify plan:

  1. Monthly plan: $39
  2. Free theme instead of premium: Save $180
  3. 2 free apps instead of paid: Save $40/month
  4. Using Shopify Payments: Save 2% on $5000 monthly sales = $100
  5. Annual payment discount: Save $3.90/month

Total monthly savings: $143.90

That’s a significant reduction in Shopify prices, especially for a new business!

Remember, while it’s important to keep costs low, don’t skimp on essentials that could boost your sales. Sometimes spending a bit more on the right tools can pay off in increased revenue.

Potential Earnings with Your Shopify Store

How much is a Shopify store going to make? The truth is, earnings can vary widely. Some stores make just a few hundred dollars a month, while others rake in millions. Let’s look at some average figures to give you a better idea:

  1. New stores (first year): $1,000 – $5,000 per month
  2. Established stores (2-3 years): $5,000 – $50,000 per month
  3. Top-performing stores: $100,000+ per month

Remember, these are just averages. Your actual earnings will depend on factors like:

  1. Your niche and products
  2. Your marketing efforts
  3. Your profit margins
  4. Your customer service

Let’s break down how Shopify prices compare to potential earnings:

Scenario 1: New Store

  1. Basic Shopify plan: $39/month
  2. Additional costs (apps, theme): $50/month
  3. Total monthly cost: $89
  4. Potential monthly revenue: $2,000
  5. Profit (assuming 30% margin): $600

In this case, your Shopify costs would be about 15% of your revenue.

Scenario 2: Established Store

  1. Shopify plan: $105/month
  2. Additional costs: $100/month
  3. Total monthly cost: $205
  4. Potential monthly revenue: $20,000
  5. Profit (assuming 30% margin): $6,000

Here, Shopify prices would only account for about 1% of your revenue.

As you can see, as your store grows, the cost of running your Shopify store becomes a smaller percentage of your overall revenue. This scalability is one of the reasons many entrepreneurs choose Shopify.

To maximize your earnings and ensure your Shopify investment pays off, consider these tips:

  1. Focus on high-quality products with good profit margins
  2. Invest in marketing to drive traffic to your store
  3. Provide excellent customer service to encourage repeat business
  4. Continuously optimize your store based on data and customer feedback

Remember, success on Shopify doesn’t happen overnight. It takes time, effort, and smart strategy. But with persistence and the right approach, your Shopify store could become a significant source of income.

My Opinion

While Shopify’s pricing can seem steep, especially for new entrepreneurs, I believe it’s often worth the investment. However, I caution against assuming Shopify alone guarantees success. The platform is just a tool – your business acumen, product selection, and marketing efforts are what truly drive profitability. For some, a simpler, cheaper platform might be a better starting point. Ultimately, Shopify’s value depends on how effectively you leverage its features to grow your business.