Did you know that according to a recent study by Shopify, choosing the right pricing plan can result in an additional 10% in revenue growth?
Selecting the right plan can make a significant difference to your profitability, determining the success of your business.
In this article, we'll go deeper into the specifics of pricing plans. So, are you ready to up your profit game?
Let's get started.
Why is it important to understand Shopify's pricing plans?
Understanding Shopify plans is essential for merchants who want to launch an online ecommerce business or upgrade to better Shopify plans and pricing. Shopify pricing allows you to select the best plan for your needs, and makes you realize whether to upgrade or downgrade the plan based on your business growth.
Let us now look at the five Shopify pricing plans offered, each with its own set of features and pricing.
Shopify pricing plan comparison:
Each plan has its own set of features and limitations, which you can find below:
Note: This is a brief summary of the Shopify plan comparison, and there may be additional points that have not been listed here. For more detailed information, please refer to the Shopify website.
Shopify pricing tiers:
Here's the same tabular column with the Shopify pricing plans in Indian rupees (INR), including monthly, annual, and biennial fees, as well as transaction fees:
Here is how the revenue calculations work with the transaction fees and payment processing fees for each Shopify pricing plan in Indian Rupees (INR).
When should you upgrade to a better Shopify pricing plan?
Basic Shopify plan to Shopify plan
It might make sense to move from the Basic Shopify plan to the Shopify plan when your monthly revenue exceeds around INR 150,000 to INR 200,000. You may consider upgrading to the Shopify plan to take advantage of lower transaction fees.
Example: Let's say you have an online store that generates ₹100,000 revenue every month. If you're on the Basic Shopify plan, your monthly fee would be ₹1,994 and your transaction fee would be 2.0% of ₹100,000, which is ₹2,000. So your total fees would be ₹3,994.
Now, let's say your revenue increases to ₹200,000 per month. If you switch to the Shopify plan, your monthly fee would increase to ₹7,447, but your transaction fee would decrease to 1.0% of ₹200,000, which is ₹2,000. So your total fees would be ₹9,447.
This shows that as your revenue increases, your transaction fees decrease, and you can switch to a higher plan with lower fees. This can help you save money and increase your profit margins in the long run.
Basic Shopify plan
Monthly fee: ₹1,994
Transaction fee: 2.0% of ₹100,000 = ₹2,000
Total fees: ₹2000+ ₹1,994 = ₹3,994
Monthly fee: ₹7,447
Transaction fee: 1.0% of ₹200,000 = ₹2,000
Total fees: ₹2,000 + ₹7,447 = ₹9,447
This is how the total fees vary, as they depend on your revenue.
Shopify plan to Advanced Shopify plan
You can consider moving from the Shopify plan to the Advanced Shopify plan when your monthly revenue exceeds around INR 1,000,000 to INR 1,500,000. You may consider upgrading to the Advanced Shopify plan when you require advanced features such as third-party calculated shipping rates and advanced report building.
Advanced Shopify plan to Shopify Plus
When your monthly revenue exceeds INR 50,00,000 to INR 60,00,000, which is similar to $67,000 to $80,000 USD, you may consider upgrading from the Advanced Shopify plan to the Shopify Plus plan. Also, if you need enterprise-level features like custom checkout, multi-currency compatibility, and dedicated account management, you should choose the Shopify Plus subscription.
Other fees may be required along with the Shopify pricing options. Backend expenditures are included, such as domain registration and SSL certificates, which are essential to using the Shopify platform. Payment gateway fees must be paid for each transaction made through the platform. The amount of these additional expenses varies depending on the Shopify plan and payment method selected. Furthermore, upgrading to a higher-tier plan will incur additional costs. Read on for a thorough pricing breakdown offered by Shopify to gain a better grasp of the costs connected with Shopify plans.
Shopify has a vast ecosystem of third-party apps. that can help optimize your online stores. These apps can enhance your store's functionality, improve the customer experience, and drive sales.
Costs associated with Shopify apps
The costs associated with using Shopify apps come with different pricing models. You can receive four different types of app-related charges and credits:
a) Subscription fees
These fees are for recurrent app use, such as a monthly or yearly subscription. They are included in your Shopify subscription payment.
b) App use fees
These fees vary depending on how much you use the app or the service it interacts with (for example, the number of interactions provided by a customer care app). They are included in your monthly Shopify subscription payment.
c) One-time app purchases
These fees are for specific services provided by an app (for example, a single data movement from one platform to another). They are listed in separate legislation.
d) Application credits
In certain cases, such as when you downgrade a paid app membership halfway through its monthly cycle, you are entitled to application credits. These credits appear on your Shopify subscription statement and can be applied to future Shopify application payments.
The typical cost for Shopify applications is 50% of the free plan, but it depends on what business you run and the needs of it, as well as the apps that you require for your business. The typical cost of paid apps ranges from $1,600 to 4,000, which is around $20 to $50 in USD.
Contracts and timelines
Understanding contracts and timelines is important because it can directly impact the cost structure of an online store. When signing up for a pricing plan, businesses are often required to enter into a contract with the service provider, which may have specific terms and durations. These terms can impact the flexibility of the Shopify pricing plan and potentially lead to additional costs or fees if they are not understood.
For example, some contracts may require a minimum commitment period, such as a 12-month contract, and charge a penalty for early termination. In this case, a business would need to evaluate whether the benefits of the pricing plan justify the commitment period and potential penalty costs.
Additionally, it can impact the launch and ongoing operation of an online store. For example, if an app developer has a longer development timeline than anticipated, it may delay the launch of the online store or require additional costs to expedite the development.
Factors to consider when determining Shopify's pricing plan
Understanding which plan is best for you is critical to ensuring that you are getting the most bang for your buck. Here are some factors to consider when determining which Shopify plan is best for you:
a) Sales Volume
As your business expands, you may need to upgrade to a higher-tier Shopify plan capable of handling larger sales volumes. If your current plan's sales limit is approaching, consider upgrading to Advanced Shopify or Shopify Plus to meet your requirements.
b) Staff Accounts
The number of staff accounts included with your Shopify pricing plan can also influence when you transition. If your team is growing and you need to add more staff accounts, you may need to upgrade to a higher-tier plan with more accounts. Basic Shopify may be sufficient if you have a small team. Advanced Shopify or Shopify Plus may be required if you have a larger team.
c) International Sales
If you intend to sell your products on a global scale, you may need to switch to a higher-tier plan that allows for worldwide sales. Shopify's more sophisticated plans include multi-currency support and the ability to sell things at various prices overseas.
d) Advanced Features/Business Needs
You may need to upgrade to a higher-tier like Shopify Plus if you require additional features such as gift cards, professional reporting, and real-time carrier delivery prices. These features can be useful for developing organizations that require more sophisticated tools to manage their operations.
Of course, your budget is always a factor in determining which Shopify pricing plan to select. If you're just getting started, you might want to go with a lower-tier plan to keep your expenses down. As your business expands and you have more resources, you could potentially upgrade to a higher-tier plan with more features and resources. Consider upgrading from Basic Shopify if this functionality is vital to your business.
The level of reporting features varies by plan as well. Basic Shopify may be sufficient if you only require basic reporting. Consider upgrading to Shopify, advanced Shopify, or Shopify Plus if you require more advanced reporting.
So, now you might have understood which Shopify pricing plan might best suit your business based on the plans and analyzing how your business's revenue is going. It's essential to carefully consider all the factors that go into making pricing decisions.
Overall, carefully evaluating all of these factors will help you develop a pricing plan that is both sustainable and competitive in your market.
At Marmeto, we aim to ensure the e-commerce store we build supports the objectives of your business. Knowing that the strategy you've chosen for your online store is of the highest caliber and that we'll provide an excellent user experience that leaves a lasting impression with effective conversion rates.
Get in touch with us now!