How Much Are Seller Fees and Costs on Shopify?
If you are looking at Shopify for your e-commerce business, or maybe you already use Shopify but need some support with the tax implications of Shopify, then it is important that you understand Shopify fees. If you need support or advice on the best Shopify package for your ecommerce business, then our experienced team are on hand to help. The fees will vary depending on which Shopify plan you choose, but remember that you will need to pay the monthly fee, as well as the transaction fee and any other extra fees. We work with many ecommerce businesses across the UK and can advise on the best Shopify plan for your business. We do work with businesses that sell internationally, but here we will be looking at selling mainly to the UK from a UK-based online shop.
Shopify Subscription Plans
There are four main Shopify subscription plans – Basic, Shopify, Advanced and Plus. Choosing the best plan for your business is crucial, and choosing the wrong package could prove very costly for your business. Shopify is a well-respected and popular choice of ecommerce platform and is suitable for businesses of all sizes, using a well-known provider will give you peace of mind. If you aren’t sure which Shopify package would suit you best, then speak to our knowledgeable team today.
Basic Shopify Plan
As described, the Basic Shopify plan is a great choice for smaller businesses, start-ups, and those with a lower volume of sales. The monthly charge is £25, with a transaction fee of 2% + 25p per transaction, if the payment is processed through Shopify. If the payment is processed through another payments system such as PayPal, you will receive an additional fee of 2%. For this, you can create an online shop with unlimited products, a free SSL certificate, access to their helpline, and can choose from 20 themes for your online shop design.
The mid-range subscription plan is ideal for growing businesses or those with a higher volume of sales. The monthly Shopify account charge is £65, but the transaction fee drops to 1.7% +25p, so some sales analysis is needed to see which package would suit your business better. The Shopify plan comes with all the features of the Basic, but with additional report capabilities which can be insightful. You also have more logins for your sellers. Given the small increase in the fixed fee and the drop in transaction fees, you don’t need to have a very high sales volumes before this becomes more cost-effective than the basic Shopify plan.
This package costs £344 per month, so it is only worthwhile looking at this if you have a good volume of sales every month. You will save money on the transaction fees which fall to 1.5% +25p, and it does come with extra features such as advanced reporting and the ability to outsource your shipping, along with additional staff accounts. If you are investing in PPC advertising for your Shopify store, then it’s likely that you would benefit from an upgrade to Advanced Shopify as it includes Shopify Audiences which will help drive the effectiveness of your ad campaigns.
Shopify Plus is another level up and costs from USD2,000 per month. The transactional fees are variable but lower than the other 3 plans. Conversion rates are claimed to be higher and the checkout is faster. The checkout is customisable with more options for discounts and shipping rates. You can manage multiple stores, currencies, and languages for both B2B and B2C sales.
How Much Does Shopify Take Per Sale UK?
It is important to understand all Shopify pricing associated with a single transaction so that you can carry out a thorough cost analysis of Shopify charges. After you have paid your monthly subscription fee for your chosen package, you will have additional fees related to each sale, which we will break down here for you.
Shopify transaction fee applies to each sale, and it will vary according to which plan you are on. The higher the monthly fee, the lower the transaction fee. Starting from Basic at 2% + 25p, Shopify at 1.7% +25p to the Advanced at 1.5% +25p. Remember that these fees will still stand, even if you refund the sale.
Credit Card Fee
Shopify uses Stripe for their own payment system. If you only offer your customers one way of paying, then they will be directed through this integral payment system, and you will only pay the transaction charges as stated above. If you offer your customers another payment method, such as PayPal, be aware of additional costs.
If your customer pays through PayPal or another payment system, this is when the additional charge kicks in. These also reduce on a sliding scale as your monthly charge increases. The Basic package charges an extra 2%, the Shopify 1%, and the Advanced 0.5%. On the basic package you are therefore still paying the same fee to Shopify, PLUS any fees charged by the alternative chosen provider. You may choose not to offer your customers a choice of ways to pay to ensure that you don’t receive this extra charge.
International Selling Fees
If you sell internationally, there will be additional charges related to overseas transactions, in part due to the currency conversion costs and cross-border fees. These are similar to bank charges that you would receive for sending money abroad. Shopify adds an international fee onto the transaction, normally 2% (1.5% for USA sales) for UK-based companies.
Managing and Reducing Shopify Fees
You need to factor in the Shopify charges as part of your business cost analysis. Monitoring your volume of sales will help to ensure that you are on the best subscription plan for your business. Keeping an eye on this will help to keep your fees down. Remember the additional charges that apply if a customer buys through an alternative payment channel, such as PayPal. It is worth considering whether you should offer this or not, as a way to keep your fees down, though conversely, you may find that not offering PayPal reduces your online sales.
UK Tax Considerations for Shopify
The fees from your Shopify’s subscription and transaction fees will be included in your business outgoings, and balanced against your income to calculate your profit. Make sure you keep all your records relating to your Shopify payments and fees for tax purposes.
Shopify Billing and Payment Information
You will receive your payment for a sale generally about 3 working days after the transaction, the transaction fees are deducted before the funds are released to you. You will then be billed monthly, or annually if you choose this option for your subscription.
Compliance and Regulations for Shopify
Shopify accounts come with free SSL so that you know your website is secure. As Shopify uses their own payment system, your customers are not getting passed onto a third party for payment, which can have additional risk.
Upscale Your Business with Shopify Today
Running a business can be complex, and using Shopify can add another layer of financial complexity. When you work with us, you can be confident that our Shopify Accountants are experienced and knowledgeable about the intricacies of Shopify and e-commerce. To learn more about how we can work with you and your business, visit our Shopify Accountants page today.
As you consider the future of your Shopify business, we invite you to explore how our specialist Shopify accounting services can help you. Reach out to us today, please give us a call on 01942 725419.