Shopify Plus Cost of Ownership
When deciding which E-Commerce platform you want to choose, the cost of said platform is often one of the biggest points to consider.
You’re clearly looking into Shopify Plus; Otherwise you wouldn't be here. Welcome.
There is an acronym ‘TCO’ which stands for ‘Total Cost of Ownership’. This is the first thing you need to wrap your head around when it comes to the cost of a Shopify Plus store – or any website, really.
Choosing Shopify Plus (or any E-Commerce platform for that matter) is not a once-off cost. There are buying, building and running costs involved. (Important to note is that Shopify Plus has a minimum 12-month contract.)
The very first cost you will hit is the initial monthly fee that Shopify Plus charges all its users. It starts at $2k per month. This is for all businesses with a revenue of under $800k a month. For those who have a revenue over $800k a month, Shopify Plus will charge them an additional 0.15% of the revenue generated above $800k.
This above mentioned base line fee, what exactly does it cover/include?
Hosting – Shopify is a SaaS E-Commerce solution and as such, all stores are hosted on their platform.
Updates – Keeping your website as up-to-date as possible is imperative with staying competitive in your field. Shopify Plus stays up-to-date and automatically performs a lot of updates on your behalf.
Wholesale – The Shopify Plus plan includes a separate wholesale store, which allows you to enter the B2B business, which can open up a lot of additional revenue on top of your D2C sales.
Support Services – a 24/7 support team is at your disposal when using Shopify Plus. They also have an extensive FAQ forum and a ‘Help’ section on their website for almost every little question you might have.
Shopify Plus Apps – The team at Shopify Plus has done wonders creating useful, tech-savvy and time saving Shopify-built apps that are designed to streamline your operations.
Option of Expansion Stores – Shopify Plus allows you to set up 9 further stores (they all need to be the same brand), which you can use to build international stores, giving you lots of global trade possibilities for the future. If you need more than 9 store instances, you can also pay for more, which will cost you $250 per store, per month.
Transaction & Payment Fees
One of the most crucial parts of e-commerce is payment. You will need one or multiple payment gateways to process and receive payments from your customers. The default solution with Shopify is Shopify Payments, which includes a range of different payment methods from credit cards to Apple Pay, depending on where your HQ is based, and for which they charge around 1.5% - 3.15%.
If you prefer to use a third-party service like SagePay, Adyen or PayPal, their respective fees will apply. Note that if you don’t use ‘Shopify Payments’ you will be charged a transaction fee of 0.15%, so it makes sense to compare the options thoroughly.
Cost of Apps
In order for your website to function as best it can, Shopify has a curated app marketplace, which includes nifty Shopify-built apps as well as third-party apps. You can use these to add functionality to your store and increase its performance. Different apps can do different things. Some help you optimize your workflow, others automate marketing methods and some aid with your internal logistics.
Let’s look at some examples. Seeing as we’re talking a lot about cost in this blog, here are some apps that will help you better manage your finances and costs. For example, the third-party app Avalara helps you work out your tax payments. On the other hand, ReturnGo assists you in managing your returns. (feel free to visit the Shopify App Store yourself, so you can take a look at all the apps they offer)
Most of these apps come at an additional cost and all app setups are specifically tailored towards the respective business, so it’s hard to call numbers for this. For a ballpark figure, we’d say that you’re looking at approximately $1k – $2k a month to build a relatively powerful app setup and up to $7k if you’re a big enterprise that needs many specializations.
When using Shopify apps, you will be billed for your subscriptions and app usage as part of Shopify's 30-day subscription billing period.
With apps, it really depends on what you need. It’s exactly like when you download an app on your phone for personal reasons. Occasionally it's completely okay to go with a free app that offers only little features, if the basics are enough for you. At other times, something is essential to you, and you are willing to pay more for it to include all the features you need.
Now that you have an idea about the running costs of Shopify Plus, let’s talk about the cost for the initial setup. At first, you will need to decide whether you want to do it all on your own, or if you would like to get external help.
If the cost of the minimum monthly Shopify Plus subscription, cost of apps and cost of transaction fees is already stretching your budget for, then Shopify has great themes that you can choose from. With these, you can build your own website. The benefit to this is that it saves you the cost of a Shopify Agency, the downfall is that, well, you’ll have to build your own website (and that it might come out looking somewhat generic).
Most businesses that use Shopify Plus will want to take that last step of creating a custom website, to build a brand-specific store and really stand out from the competition. Now you’ve fallen into the land of web design and web development. If you don’t have an in-house team to tackle this, you should consider hiring a Shopify Plus agency.
The same holds true for integrations. Shopify offers fantastic APIs to connect it with your existing tools and software. If there is no standardized API connector for your tools, you will need the help of professional developers to build custom integrations, which can also be hired through an agency.
Shopify Plus agency cost
The cost of the Shopify Agency will depend on which one you choose and might vary a lot. The better the quality, the bigger the company, the more team members they can offer you, the more priority they can place on your business and the faster the turn around speed on your project, the more it will cost.
In general, smaller agencies tend to specialize in certain skills or niches, delivering very focussed services, while larger agencies will be able to offer a wide range of services, ranging from coding to marketing. Yet, they will probably have a somewhat similar process for setting up a Shopify Plus store.
There are three pillars to the costs of a Shopify Agency.
Pillar 1 – The initial planning
Usually, to receive a proper proposal for a project by an agency, you will first have to present them with detailed specifications of your project. This requires in-depth knowledge as well as writing detailed and lengthy documentation on your side – doesn’t sound very inviting, does it?
That’s why many agencies offer initial consulting, discovery, and planning. This process is worth it for you and the agency. You will be able to run through all your ideas, wants and needs. The agency will be able to see the probability of those coming into fruition and prepare a technical play by play of how achieving your goals would look, while learning about and understanding your business.
This process will cost you money, as it costs the agency time and resources. But it is worth it because at the end, you’ll have a detailed solution plan in hand and a good idea whether the agency can deliver what you need. (And if you feel that they can’t, you can just take the results and talk to any other agency.)
Quick Disclaimer: You might run into agencies that write a proposal without this initial consultation and planning. If you didn’t have an extensive request for proposal that you’ve sent them beforehand, and you enter the project with them, you can count on hitting many bumps in the road with a high risk of being charged more in the end. This is simply due to the fact that they wrote a proposal purely on what they thought was what you require, without checking whether their assumptions are right.
An average ballpark figure here ranges significantly depending on the agency you choose, but it usually starts at around $5k and rises with the complexity of the project. Our experience shows that setting aside about 5 – 10% of your overall budget on planning leads to good results, without overthinking anything.
One more thing that will become clear during the discovery process is if there is a need for a headless website.
A headless website is a highly technical website that requires a team of highly skilled professionals and coders to create a bespoke website.
If you say during the discovery process that you are looking for a website that is extremely tailored to your businesses specific needs, that can look like no other, that has uncommon features and designs that are quirky and yours only, then you will see that you’ll be directed toward a headless website. If you have the desire for a custom-made, digitally forward-thinking, fast to load and high performing website, then going headless is right for you.
Not all agencies can create headless websites. They’re extremely niche and very new to the block in terms of tech. The agency you’re doing the discovery with may not even be able to do a headless website. It’s the action of decoupling your front-end with your back-end so that these two can run together but parallel to each other and are not linked.
If you’d like to read about what going headless means and the costs involved, read our blogs:
An average ballpark figure here ranges significantly depending on the agency you choose, but it usually ends up between $50k – $550k, and therefore we’d only recommend mid to large-sized enterprise with consecutively high yearly turnovers to take this route.
Pillar 2 – Web Design & Web Development
Furthermore, you will need to then pay for them to implement this discovery report and create and design your website. This is known as the project cost.
The project costs vary significantly depending on the size of your business, your online site traffic expectations, fulfillment processes on your website, site layout and design, features that you’d like, shop automation and optimization etc.
An average ballpark figure here ranges significantly depending on the agency you select and the services you need, but it typically starts at around $20k – $350k.
Pillar 3 – Running Costs
You’ll now need the agency to make sure that the website they created stays as it should. To achieve this, they will need to update your website often and implement changes that you will notice needing as time continues. As your business grows and evolves, so must your website and your agency is the team that implements these changes.
Agencies usually work on monthly retainers to offer these services. Depending on how frequently you require them to jump in and tweak certain things and depending on the level of expertise these changes take and how many team members, time it takes will, affect how much your monthly retainer is.
An average ballpark figure here ranges significantly depending on the agency you choose and the hours you require per month, starting at around $2.5k for simple maintenance and small updates and goes up to $10k and beyond when you want rather active management and continous development.
As you’ve just read, there are a lot of reasons to choose Shopify Plus and a lot of costs involved too. It’s a highly functioning website that comes with a wide variety of things that you can interchange and build to create a website that you can actually afford. We strongly believe in the capabilities of Shopify Plus and believe that if you want to have a successful online presence, this is one of the best options out there. The number of apps and extra features that you incorporate is up to you and your budget.
If you have any more questions about Shopify Plus, feel free to get in touch with us. Also, if you want to talk about going headless, we’re specialists in this and one of the few agencies that bring a high level of finesse when it comes to going headless, so shoot us an email on firstname.lastname@example.org or contact us through our website here.
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Natalie MillerMarketing Manager
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