One of the most typical enquiries people have when they start an online business is, “What are the Shopify commission rates?” To keep your profit margins in check and pick the right plan, you need to know how Shopify charges fees and commissions.
This tutorial will explain how Shopify’s commission rates work, break them down, and provide you advice on how to keep your costs low while developing your business.
Key Highlights on Shopify Commission Rates
- Shopify does not charge per-sale commissions on its plans but applies transaction fees if you use third-party payment gateways.
- Using Shopify Payments removes transaction fees, which can significantly cut costs.
- Monthly plans start from $39, with varying features and credit card rates.
- Credit card rates range from 2.4% to 2.9% + 30¢ per transaction (based on the plan).
- PlugBooks can help you track these fees automatically, integrating Shopify with QuickBooks or Xero.
What Are Shopify Commission Rates?
Shopify doesn’t take a cut of your sales as Amazon or eBay do. Instead, it charges a monthly fee plus fees for each transaction (if you don’t use Shopify Payments). This is why Shopify is a popular alternative for businesses that want to control their branding and earnings.
For instance:
- If you utilize an outside payment gateway like PayPal with the Basic Shopify account, you’ll have to pay a 2.0% fee on each sale.
- If you upgrade to Shopify’s mid-tier plan, this goes down to 1.0%.
- The Advanced Shopify plan lowers it even more to 0.5%.
Breakdown of Shopify Transaction and Credit Card Fees
Rates for credit cards (for Shopify Payments):
- The Basic Plan costs 2.9% plus 30 cents for each online transaction.
- Shopify charges 2.6% plus 30 cents for each online transaction.
- Advanced Plan: 2.4% plus 30 cents for each online transaction.
These fees only apply when you use Shopify Payments. Shopify adds its own transaction fee on top of the gateway’s fees if you pick a different gateway.
How to Lower Shopify Commission Costs
To save on fees and commissions:
- Use Shopify Payments to eliminate unnecessary transaction expenses.
- If you have a lot of sales, get a higher-tier plan. Lower credit card rates can save you money in the long run.
- Use tools like PlugBooks to keep an eye on your costs and transactions.
- If you use outside services, talk to your payment gateway about getting better rates.
- Use annual plans to get lower subscription fees from Shopify.
Why Choose PlugBooks for Shopify Accounting?
As your store gets bigger, it might take a lot of work to keep track of Shopify’s commission rates and fees. PlugBooks makes this process easier by connecting your Shopify store to accounting systems like QuickBooks and Xero. With PlugBooks, you can:
- Automatically keep track of transaction fees and payouts.
- Make tax reporting and bookkeeping easier.
- While we take care of the numbers, you can focus on building your business.
FAQs
1. Does Shopify take a cut of every sale?
No, Shopify doesn’t take a direct cut, although it does charge fees for transactions if you use a third-party payment gateway.
2. How can I avoid paying transaction fees to Shopify?
Using Shopify Payments as your payment channel can help you avoid these fees.
3. Are the prices for Shopify credit cards different from the fees for transactions?
Yes, credit card rates apply to all sales, however transaction costs only apply when you use an outside payment gateway.
4. What is the plan with the lowest fees on Shopify?
The Advanced Shopify plan has the lowest credit card rates (2.4% + 30¢) and the lowest costs for transactions.
5. Can PlugBooks help you keep track of your Shopify fees?
Yes, for sure. PlugBooks makes it easy to keep track of your fees and manage your money by
connecting your Shopify data to QuickBooks or Xero.
6. How much do Shopify affiliates make?
When a user signs up for a premium plan using an affiliate link, the affiliate makes an average of $150.
In Conclusion
It’s important to know how much Shopify charges in commissions so you can maintain your profit margins healthy and pick the right plan for your store. Shopify doesn’t charge regular commissions as other marketplaces do, but transaction fees and credit card rates can pile up if you don’t keep track of them.
You can save money and make managing your money easier by using Shopify Payments and keeping an eye on your costs using products like PlugBooks.
If you want to make bookkeeping easier and keep track of all your Shopify fees automatically, PlugBooks.io can help you make better financial choices and expand your business.
Warning
This article is simply meant to give you information. The fees for Shopify may change, so please check their official site or talk to a financial advisor to get the most up-to-date information.