Why The Recent Shopify Changes Make It More Compelling Than Ever

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Those of you who have followed my blog since the beginning know that I’ve always been torn whether to recommend Shopify to new ecommerce business owners. In general, I’m against any shopping cart that charges a transaction fee as a percentage of your revenue.

Shopify

I also dislike any cart that nickel and dimes you with fees for small features that should already be included out of the box.

But despite the fact that Shopify used to possess both of these characteristics, I still recommended them to a very small subset of my readers.

Why? It’s because I consider Shopify to be the most intuitive and easiest to use fully hosted cart out there and they offer the best looking templates as well. In fact, if they didn’t charge transaction fees, I’d recommended them in a heartbeat.

Well that day has finally come. Recently, Shopify has made a few huge updates that I’m confident will send shockwaves throughout the fully hosted shopping cart industry.

Shopify No Longer Charges Transaction Fees

No shopify transaction fees

Yes. You read that correctly. Shopify no longer charges any transaction fees for purchases using their payment gateway.

That means that you can have the best of both worlds, a robust and easy to use shopping cart that you can implement without sacrificing a percentage of your sales.

You’ll receive unlimited bandwidth and access to their awesome library of attractive templates for just one flat monthly rate with no variable transaction fees.

Note: Shopify’s new pricing scheme is very similar to what Big Commerce and Volusion charge and they have made these changes to increase their competitiveness in the market place.

Today, if you are looking for an easy-to-use platform to start an online store and you are not very tech savvy, then Shopify’s latest changes have almost made your decision a no brainer.

If you want to be able to design a great looking online store without needing a web designer, then Shopify is for you.

The elimination of transaction fees was pretty much the last thing that was stopping me from recommending them for new shop owners and now that they’ve removed this restriction, I have no more qualms.

Shopify Allows You To Accept Credit Cards Without Paying A Monthly Fee

In addition to eliminating transaction fees, Shopify also made another huge announcement as well. They now also offer a free credit card payment gateway that does not incur a monthly charge.

This is pretty huge for several reasons. For one thing, shop owners no longer have to sign up and pay a $30 monthly fee for a separate payment gateway. As soon as you signup for Shopify, you are instantly approved to accept all major credit cards as part of your flat monthly fee.

This means that you can literally setup shop and start selling right away without any delays. Imagine being able to throw up an online store in a matter of days without having to worry about integrating several different pieces together. It’s pretty sweet!

Shopify has effectively transformed themselves into a one stop shop for ecommerce with all of your payment logistics nicely integrated into a single interface.

There’s no need to worry about getting approved to accept credit cards. There’s no need to worry about PCI compliance. Plus, they’ll setup your SSL certificate for free as well.

What About The Rates?

My first thought when I read their announcement was that there must be some catch. After all, removing transaction fees and offering credit card processing without monthly fees has to put a dent on their revenues.

So I immediately looked into what they are charging for their credit card transactions. For the starter and basic plans, Shopify charges $.30 per transaction and 2.9% of your revenues. This isn’t the greatest rate in the world but it is on par with what PayPal charges until you hit the $5000 a month threshold.

For the more expensive Shopify plans, the rate gets reduced to 2.5% for professional and 2.25% for the unlimited plan. Again, these aren’t the best rates in the world but they are also on par with what Paypal offers at higher transaction volumes.

So what’s my assessment? Early on, it’s nice to not have to pay any monthly fees to process credit cards and to keep your expenses to a minimum. But in the long run when your store gets bigger, you’ll end up paying more for credit card processing than if you shopped around for a 3rd party solution.

Unfortunately if you do not use Shopify’s payment gateway, then you will be stuck paying their old transaction fees. But this is a reasonable tradeoff to make early on in my opinion.

What About The Features?

Unfortunately, the depth of shopping cart features out of the box still remains Shopify’s biggest weakness. Compared to their counterparts Big Commerce and Volusion, Shopify does not offer the same level of functionality without having to purchase additional addons.

However with their latest release, they did finally include some much needed features to their out of the box package. For one thing, they finally added an abandoned checkout recovery feature.

And finally, they added the much needed ability to change SEO title tags and meta descriptions in the backend without resorting to a 3rd party plugin.

So while Shopify is still behind in the features department, they more than make up for it with their superior design tools and themes.

After running my online store course for a while now, ease of design matters and it’s nice to be able to create a good looking website without having to hire a designer.

Conclusion

Overall, the latest Shopify changes make it more compelling than ever. For a flat monthly fee, you can have superior design tools, free SSL, and free credit card processing all in a one stop shop.

In fact, I think that these new pricing adjustments will send ripples throughout the entire industry because it makes Shopify extremely appealing across all but the most advanced market segments.

Again, their only weakness is with their out of the box feature set. But for small to medium shops, signing up with Shopify is very compelling.

Given the new disparity in the marketplace, I’m curious to see how the other shopping carts will respond to Shopify’s changes. As the landscape becomes more competitive, you as a shopowner will continue to benefit.

Note: MyWifeQuitHerJob.com readers are eligible to receive special discounts with Shopify. Please sign up for my 6 day mini course and newsletter for more information.

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32 thoughts on “Why The Recent Shopify Changes Make It More Compelling Than Ever”

  1. Diana says:

    Hi, Steve,

    Thanks for the post, it is very on time. Great to hear your opinion about it. Seems to start e-commerce gets easier and easier, it’s time to take action!

    1. Definitely. It’s amazing how easy and inexpensive it is now to start selling online.

      1. Lorean Dona says:

        Why people like you don’t understand that USA is not the only country the world?. You are misleading people and i hope you accept this comment to go public.

        1- Shopify Payments it’s only available in US/Can/UK… if you are incorporated anywhere else you are stuck with the greedy behaviour of Shopify penalising your success by charging you transaction fees.

        2- Why do i need to need to be forced to use their limited payment system over a more rich and with more payment options (like ApplePay, Alipay) like Stripe?, so if you are in US and would like to to have a better payment processor instead of the mediocre shopify thing then you have to pay transaction fees… and it’s not 2%, 1%… at the end, if your profit is 100% per sale… then the percentage you pay to shopify is double: 4%, 2%… but if your profit is less then it’s worse.

        3- You only have httpS until customer reach the payment cart, not across your entire website, so if a customer manually add httpS instead of http to your site they will get a warning (or shopify stopped being greedy at this too and fixed it?)

        4- You are stuck at their horrible and long link structure (http://yourstore…/..collections/blahblahblah/…./…)

        5- For everything they charge, their blog system it’s just mediocre at best, that’s why so many serious business at the end spent more time and resources to create a wordpress blog separated from shopify.

        6- You just have to go to forums and read the complains and the responses from the “gurus” (customer service) to see the arrogance in them.

        7- And now that shopify went public… if before they were horrible… now do you think you as a customer will be first than their investors/shareholders?

        Warm regards

  2. Aryei says:

    Hi Steve

    Thanx for your informative blogging.

    2 things are bothering me with shopify: 1- what if they decide to raise their fees after one is dependent on them. And 2 what does one do when their business gets to large for shopify.

    Also, is it a big deal to change to a different shopping cart and web host once a business is in progress?

    Looking forward to your response. Thanx a lot

    1. Hi Aryei,

      If you’ve taken my 6 day mini-course you probably already know my feelings about this. My general philosophy is that it’s always better to own and host your own shop. But sometimes, the technical challenges are too difficult for certain people.

      And for these people who just want to start selling right away, I think Shopify is an excellent choice.

      In general, it is fairly difficult to switch platforms once your business is already established. It can be done but it’s a major pain.

    2. Existing Shopify customers are always grandfathered into their existing plans.

      1. Anon says:

        What Steve says is Not true at all. Shopify just raised our credit card processing fees/rates on us, after we became dependent on them. A full percentage point higher than advertised. Bait and switched. These rates don’t mean much, as our new rate that is going to be imposed on us is higher than any mentioned on this page.

      2. Daniel,

        I have a bunch of students on Shopify and there are no transaction fees if you use their credit card processing in the US. I have no clue what your situation is…

      3. Anon says:

        There is indeed no transaction fees. I am talking about the credit card processing rate as I said. We have an established online business with gross per month in the six figures. I’m not asking you to understand our situation, but instead get the point across that you only will get the 2.9% to 2.25% as long as shopify allows you to, and what Shopify claims about grandfathering is b***. We only have been with them for less than a year.

  3. Steve,

    Great article! When I tell clients about they expenses of actually running a shopping cart for their website, they are always surprised at the actual cost of running it every month!

    The fact that they will instantly be able to accept credit cards and NOT have to pay the monthly fee for the payment gateway is very impressive.

    I have a friend of mine who is tech savvy, Clare Kelway. She wants to sell about 200 health-related, physical products on her site KelwayHealth .com. But she simply does NOT have the TIME to set everything up with a traditional shopping cart. She owns 2 businesses and is a wife and mother and doesn’t have time to do it all herself. She needs to get her site up and running and making money ASAP. And she doesn’t want to pay a designer like me tons of money to set everything up and then make sure it keeps running smoothly, and I don’t blame her. She was looking at Shopify yesterday with me and then today I get the email with the link to this article!

    Amazing!

    Thanks for the great review!

    ~ Jupiter Jim

    1. Awesome Jim! I’m glad that the timing worked out. With these new changes, I’ve been recommending Shopify more and more to the members of my class. It really makes a lot of sense.

  4. Hi Steve,

    I’ve been reading your blog for 6 weeks or so, and I have to say I really appreciate it. I decided to start an online business store, it’s been 2 months now and your tips really help me. I still don’t have a lot of orders, but I work hard to succeed and you are inspiring me. I’m a young female, I work full time and have a little daughter. The reason why I started my business is that I’m trying to live the “4 hours work week” thing to be able to move in a warmer country :-)

    I actually use Shopify and despite the fact they remove the transactions fees, I decided to switch for another shopping cart solution. I live in Qu├ębec, Canada and I really need a bilingual website for my store. Unfortunately, Shopify does not offer this feature in their templates. They have an app for but it’s not so user friendly and there is a monthly fees of $7.5 to use it!! It’s ironic since Shopify’s head office is located in Ottawa, which is an official bilingual city.

    So, I’m gonna shut down my account tonight and use Panierdachat (dot com). It’s a simple but interesting shopping cart to use, especially for bilingual (but not multilanguage) stores. You should check it out. I like Shopify but the transactions fees (prior today) and the lack of free features are negative points to me.

    I saw your website and you have nice stuff to sell, I’m surprised that you did not translated it in another language BTW! Maybe a future post about multilanguages stores for your readers?

    Have a good day,

    Anouk

    1. Julie says:

      Hello Anouk, I am interested to see your website. What is the address? I am currently with Magento Go and I need to switch plateform. I am looking for a bilingual plateform.

  5. Hey Steve,

    I’ve been stalking your blog for quite a while, but I think this is the first time I am actually commenting! First off, I’ve gotta say, your twitter feed with your past articles is one of my favorite bedtime reads for new ideas and inspiration.

    I’ve started my store since nearly 6 months now, and I was always torn between Shopify and BigCommerce, but went for BigCommerce for their flexibility and pricing structure.

    Now that they’ve combined payments and fees into one thing, it makes it much more compelling – and their out-of-the-box themes are prettier, too. I suppose Shopify would be my go-to for my next venture if I want to get it off of the ground ASAP.

    With BigCommerce, I’d have to do a little more customization work off the bat.

    Keep the great posts coming!

    Shabbir

  6. Steve,

    I believe Shopify have changed their fee structure since you wrote this. Basic accts are changed 2% transaction fees, medium 1% and top level account suffer no fee.

    1. Hey Matt,

      I have no idea what you are looking at but 0% transaction fee is highlighted in every single plan. In fact, they made an effort to make that fact stand out on their pricing sheet.

      1. Matt was right, there was still the transaction fees on their pricing even days after you published your article. But now it seems that Shopify made the corrections. It was very confusing indeed!

    2. Lorean says:

      The top level account pays 0.5%

  7. Matt Ward says:

    I dont get it. http://www.shopify.com/pricing is what Im looking at and the fee is still there. This was a big part of reason I just chose BigComm instead

    1. Matt,

      I think you are getting the transaction fee mixed up with the fees for accepting credit cards. Shopify now supports credit card processing with no monthly fee and a flat percentage charge. If you use their credit card processing, their old transaction fee is 0%.

      BigCommerce, doesn’t include credit card processing in their fees because they don’t offer it. You have to sign up with a 3rd party to process CCs on BC.

      1. Steve,

        Thanks for clearing that up. There were some vague statements which could be misinterpreted. May want to consider saying eliminate credit card processing fees.

        Thanks for all the great content.

        Matt

      2. Lorean says:

        Shopify DO have transaction fees. Understand not all your readers are from USA nor USA is the only country in the world. Besides, if you want to use Stripe or Braintree with way better features you will be charged shopify transaction fees, if you choose their limited Shopify Payments processor you can’t add Stripe nor Braintree at the same time (only Paypal Express checkout)

  8. Maureen says:

    Hi Steve,
    Love reading your articles!
    Since you wrote this, I have been checking out the Shopify forums and FB postings. There seems to be a lot of complaints about Stripe, which is the credit card processor that Shopify is using. Two big issues are the time it takes for Stripe to deposit your money in your account (7 days!), and big chargeback fees. I’ve been using Paypal since 2006 for my small store and never had a problem, so if Shopify didn’t charge transaction fees for using Paypal, I’d go with them in a minute. Now I’m thinking BigCommerce might be a better option.

  9. Great read. Ive had my ministry website for some years now and Im planning on doing some new things with it. I have paypal currently on my site http://www.jhmin.org for my book Praying For Our Children and is currently working on a few other websites that I would like to get up and running for my other products and books. I dont think shopify is right for me and what I want to do, I just think they charge too much. I am currently looking into 2 other smaller ones and hoping that one of those will work out for me. LOVE YOUR ARTICLES AND I HOPE TO QUIT MY JOB IN A FEW YEARS!!!! THIS IS SUCH AN ENCOURAGEMENT!!! BLESSINGS!!!!

  10. I have just found out the I have got to migrate my small online UK gifts business from Magento Go to another platform as soon as possible as it is closing down in February. My website – http://www.indigobluetrading.com – has 1000 SKU’s approx and I am currently paying 65 dollars a month (integrated with paypal). I am trying to decide whether I would be better to migrate to Bigcommerce or Shopify? I am not sure which would ensure the easiest and most cost effective transition based on the structure and design of my site and which would be the most beneficial for a UK business? Do you have any recommendations?

    1. Yes, I just read the news. I believe that they are migrating everyone over to BigCommerce no? Personally, if that’s the plan that MagentoGo has in place, I would probably stick with whatever they are recommending.

  11. Melissa says:

    What do you think about SquareSpace’s ecommerce solution?

  12. Your blog does not display a date. Maybe this is just bad journalism, maybe you are trying to be timeless. Articles {regardless of what they’re for} need dates. You are not apple.
    thanks,
    Alx

    1. Preston says:

      Wow I literally just made a similar comment and then read yours (about the article dating issue). Haha

  13. Preston says:

    This post is not dated. And all the comments have no date either. So I can not tell when this post was written or when the information is details became accurate.

    Please fix that.

  14. alex babitsky says:

    We use Bigcommerce, and they sent us a note saying they are raising our rates from the $25/month to $900/month. Yes a month!! So, buyer beware. Been with them for 5+ years.These platforms can do pretty much anything they want in terms of fees. We are looking to switch, possibly to Shopify.

    1. Yes Alex. I’ll be writing about this soon.

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