Shopify is a commerce platform that allows you to create and manage your online e-commerce store. It is widely considered by entrepreneurs, retailers, and global brands as a viable alternative to traditional website creation.
Shopify is known for providing simple and easy-to-use tools and features for managing your digital store, from product listings to final order execution.
However, before actually setting up your online e-commerce store, it’s essential to have a clear understanding of all the costs that are associated.
This blog will provide a complete practical guide to understanding the Shopify store costs before launching it in the digital marketplace.
Initial Costs of Setting up a Shopify Store
Shopify Subscription Plans:
Shopify offers a range of subscription plans to suit businesses of all sizes and niches. Here is a breakdown of the primary plans that are available:
- Basic Plan (For Solo Entrepreneurs)
Monthly fee: $29/Month
Key features:
- Full-featured online store
- Upto 77% shipping discount
- 24/7 Chat Support
- 10 inventory locations
- Unlimited Products
- 2 staff accounts
- Basic reports
- 2% transaction fees
- Localized global selling(3 markets)
- Shopify ( For Small teams)
Monthly Fee: $79/Month
Key features:
- Everything in Basic Shopify, plus:
- Upto 88% shipping discount and insurance
- 5 additional staff accounts
- Report Builder
- Localized global selling(3 markets)
- Priority email support
- 1% transaction fee
- Advanced (As your business scales)
Monthly Fee: $299/Month
Key features:
- Everything in Shopify (plan), plus:
- 15 additional staff accounts
- Custom reports and analytics
- Priority phone support
- 0.5% transaction fee
- 10 inventory locations
- 10x checkout capacity
- Localized global selling(3 markets)+ add markets for $59 /month each.
- Upto 88% shipping discount, insurance, 3rd party calculated rates
- Shopify Plus (For more complex businesses)
Monthly Fee: Starts at $2,300/Month
Key features:
- Unlimited staff accounts
- Advanced Reporting for extracting valuable insights into your business performance
- Upto 88% shipping discount, insurance, 3rd party calculated rates
- Higher transaction limits
- Advanced features like Launchpad for automated marketing campaigns
- 200 inventory locations
- Increased customization for greater control over your store’s design and functionality.
- Localized global selling (50 markets)
- Enhanced security for protecting your business from thefts
- Global expansion tools for selling across multiple countries
- Sell wholesale/B2B
Domain Name Registration:
A domain name is your store’s web address and is primarily used for branding purposes. Domain name registration is the process of reserving a unique name for your website on the Internet for a specific period of time, usually one year.
Some popular domain name registration platforms are GoDaddy, Namecheap, and Google Domains.
Cost of domain name
The cost of the domain varies depending on the different extensions, such as (.com, .net, and .org) as well as the domain registrar. Domain names usually cost between $10 and $20 per year. Domain names that are highly desirable and short can cost significantly more.
Importance of a custom domain for branding
A custom domain has the potential to enhance your brand’s credibility and trustworthiness. A domain that is unique and memorable can assist customers in discovering you easily and supports long-term brand recognition.
Additionally, a custom domain can improve your website’s search engine optimization and help you rank on SERPs.
Additional Costs to Consider
Themes and Customization
- Premium vs Free Themes
Shopify offers a wide range of free themes that can be customized but only to a certain extent. On the other hand, premium themes offer more advanced features and customization options and can cost between $60 and $300.
- Additional Customization
If your website requires additional customization, you will need to hire a ‘Shopify expert’ or a web developer, which can increase the overall costs of launching your Shopify store.
Apps and Integrations
Shopify carries a wide array of apps to enhance your store’s functionality. Most essential apps are free, while others have monthly or annual charges.
Some popular apps and their costs include marketing apps like email marketing and social media marketing apps, inventory management apps to manage inventory and shipping, and accounting apps to integrate with accounting software.
Payment Processing Fees
Shopify offers its own payment gateway, ‘Shopify Payments’. This gateway is known for simplifying payments and comes with a low transaction fee. The only drawback is that it has limited features and currency options. You can also opt for other payment gateways like PayPal or Stripe, depending on your transaction amount and business needs.
Ongoing costs of running a Shopify Store
Monthly Subscription Fees:
As mentioned earlier, Shopify offers different subscription plans, each with its own monthly fee:
- Basic Shopify: $29/month
- Shopify: $79/month
- Advanced Shopify: $299/month
- Shopify Plus: Starts at $2,300/month
Marketing and Advertising:
To attract more customers and drive sales you will additionally need to invest in marketing and advertising. This can include:
- Search Engine Optimization: If you are going for DIY SEO, then it is free. Hiring an SEO expert can cost $500–$2,000/month, depending on the SEO services you avail.
- Pay-Per-Click (PPC) Advertising: The average CPC for Google ads ranges from $1–$2 for retail/e-commerce, and social media platforms like Instagram or Facebook cost $0.50–$2 per click.
- E-mail Marketing: Email marketing apps like MailChimp charge based on the subscriber count, starting at $20–$50/month.
Shipping and Fulfillment Costs
Shipping and fulfillment costs can significantly impact your overall net profits.
- Shipping options: You can offer free shipping to boost conversion rates, but then you will have to adjust costs to the product’s price. Also, Shopify offers discounts of up to 88% for carriers like USPS, UPS, and DHL.
- Fulfillment services:
In-house fulfillment: Costs depend on packaging supplies ($0.50–$5 per package) and shipping rates.
Third-party fulfillment services (e.g., ShipBob): Costs are typically based on order volume, starting at $5–$10/order plus storage fees.
- Shipping rates:
You can determine your shipping rates according to the weight of the product, its dimensions, and, most importantly the destination.
Tips for Managing Costs Effectively
Strategies for Keeping Initial and Ongoing Costs Under Control
Start small and scale gradually: You can initially start with the basic plan of Shopify, by doing this, you will save multiple dollars. Upfront expenses can be minimized by opting for free themes that are made available by Shopify.
You can later upgrade plans and add plans when your business scales.
Leverage free tools and software: Before going for premium tools and themes, use free apps and Shopify’s built-in features. For example, Shopify’s email campaigns and basic SEO can fulfill most of the marketing needs.
Negotiate with Suppliers and Partners: Try negotiating with suppliers and partners for bulk orders or high sales volume, especially if you are using dropshipping or third-party fulfillment services.
Plan Marketing Campaigns Effectively: Plan marketing campaigns effectively by identifying your target audience, setting clear and achievable goals, and prioritizing high-ROI channels like SEO and social media marketing before heavily investing in paid ads.
Additionally, you can craft a realistic budget and allocate resources for testing different platforms with the help of small and targeted campaigns like A/B testing ads on Google. Focusing on organic marketing, like content creation and marketing, for building credibility.
Conclusion
Launching a Shopify store can be a rewarding venture, but understanding the associated costs is crucial for making more informed decisions and optimizing your business’s profitability. This can be achieved by understanding the initial costs of setting up a Shopify store, additional costs that are associated with it, and ongoing costs for effectively running the store.
Whether you are starting with the basic plan or directly investing in advanced and premium tools, thoughtful planning and regular financial investments are key to success.
“We’re curious—how do you budget for Shopify? Share your tips and subscribe for deeper insights.”
