One of the reasons Shopify is our recommended eCommerce tool is that it can scale with merchants from their first dollar in revenue to their one billionth. It offers basic plans for SMB businesses and Shopify Plus designed for Enterprise size merchants, so a merchant can graduate from the basic plans to Plus without ever leaving Shopify.
The who's who of Shopify stores are on Shopify Plus Gymshark, Bombas, Allbirds, and Fashion Nova are all on Shopify Plus.
Yes, the who's who of Shopify are all on Shopify Plus, however, that doesn't mean it's the right time for your business to make the switch. We see too many brands like the one commenting above that make the switch to Shopify Plus too early. Yes, Shopify Plus has some nifty features, but it also comes at a huge price premium to standard Shopify.
So, when does it actually make sense to upgrade? Let's dive in.
Shopify vs Shopify Plus Pricing
First, lets dig in and compare the price of Shopify and Shopify Plus. For this exercise, we’ll take the most expensive standard Shopify plan called the Advanced plan and compare it to Shopify Plus. We recommend upgrading from the two more basic plans to the Advanced plan before upgrading to Shopify Plus.
When billed annually, the Shopify Advanced plan is $299 / month plus a 2.4% credit card processing fee + 30 cents per transaction. For payments that don’t occur through Shopify, there is a 0.5% transaction fee. Shopify Plus is the greater of $2,000 a month or 0.25% of sales plus a 2.15% credit card processing fee + 30 cents per transaction. For payments that don’t occur through Shopify, there is a 0.15% transaction fee.
What is the breakeven revenue amount where fees in Shopify Advanced and Shopify Plus will be equal?
One of the main reasons we see companies switch to Shopify Plus is for reduced credit card processing and transaction fees. Because of the reduced fees, there is a financial breakeven point when it makes sense to switch from Advanced to Plus. It depends on your store's mix of Shopify and non-Shopify payments, but the breakeven point is $8.2M in annual revenue ($680k per month) assuming 100% of your sales come through Shopify payments. That's a lot of revenue. We see merchants switch to Shopify Plus before the $8M mark for other benefits, but if your store is doing over $8M annually, it should be a no brainer to switch.
Why upgrade to Shopify Plus?
In addition to lower credit card and processing fees, there are several benefits to Shopify Plus:
One of the biggest advantages to Shopify Plus is the ability to edit the shopping cart. These customizations will allow you to make changes to the cart that are custom to your business and should increase buyer confidence at a critical moment in their shopping journey. Take a look at the right hand side of the True Classic checkout page and notice the upsells they’ve included as well as the trust seals like “100% Satisfaction Guarantee” and the reviews section. These were all custom additions. Compare them to the standard checkout page of Smallflower. If you can use the checkout page customizations to increase AOV and conversion rates, that is potentially a huge win. The value of these improvements will increase with your website traffic and revenue.
Access to the Script Editor
Additionally, Shopify Plus gives you access to the script editor. The script editor allows for lots of advanced customizations. One big benefit of script editor access is that it will unlock more complex promotion options (e.g., buy one get one free, or spend $x get y% off). With the script editor access, you can also customize shipping methods (e.g., give VIP customers free shipping), and payment options (e.g., hide payment options for users in certain countries).
Shopify Plus unlocks access to two powerful automation tools: Shopify Launchpad and Flow.
Shopify Launchpad allows you to plan and automate things like product launches and sales. For example, you can use Launchpad to schedule creative and change your theme at the beginning of a sale to highlight the promoted products and then reverse the changes when the sale ends. You can also use Launchpad for product launches to schedule selected products to become available at a given time and date.
Shopify Flow is a workflow automation tool that allows you to use “if, then” logic to save you time on repetitive tasks like “tagging” customers with certain flows (specialized discounts or messages) or automatic fraud detection, monitoring, and action. You can also set up automatic notifications when inventory is running low and automatically hide out of stock products. If you are currently doing these things manually, these automations can save you tons of hours each week.
If you are planning to operate in international markets, then we recommend upgrading to Shopify Plus for multi-currency support. On the Advanced plan, you will have to open multiple stores to support multiple currencies. Hopefully, when you are considering international expansion you are at a greater than $8M revenue run rate and Plus makes sense on cost savings alone.
Unlimited Staff Accounts
The Advanced plan limits the number of staff accounts your business can have to 15. Shopify Plus allows for unlimited staff accounts. If your team is larger than 15 people, and they need staff accounts then you should strongly consider upgrading to Shopify Plus. Again, hopefully, at 15 people you are at a greater than $8M run rate when the switch to Plus is a financial no brainer.
Shopify Plus Wholesale Channel
If you plan to sell wholesale or already sell wholesale, then you should consider upgrading to Shopify Plus. The wholesale channel is only available on Shopify Plus. It allows you to create a separate password protected storefront that is only accessible to wholesale buyers. On this storefront you can customize the pricing you offer wholesale buyers, and buyers can create accounts for easy re-ordering. Orders placed on the wholesale store will show up as draft orders in your Shopify admin where you can send an invoice or accept payment by credit card to process the order. On basic Shopify plans, the workaround would be to create a separate wholesale storefront which will create added complexity and might be difficult to manage in the long run.
Better Support from Shopify
Shopify has a special support team for Plus Merchants. They are available 24/7 if any issues arise. They also offer a Launch Engineer to help you through the migration process from standard Shopify or another platform to Shopify Plus.
So when should you switch to Shopify Plus?
Anything above $8M in annual revenue is a no brainer to switch solely based on fees. We typically see it recommended to switch to Shopify Plus at the $1M in annual sales mark, but we recommend waiting until the $3-4M in sales before making the switch. At the $1M annual sales mark, Advanced will cost $28k and Plus will cost $46k. That's an $18k increase - not cheap! On a percentage basis, that's a 65% increase in your Shopify costs. You might be able to make that back by increasing conversion rates based on customizing the checkout, but at $1M in sales, $18k would mean a 2% lift in sales needed to cover the additional cost. At $3.5M in sales its a $12k increase in cost which is only a 13% increase in your Shopify costs between Advanced and Plus. At that point, you only need a 0.3% increase in your sales to cover the additional cost.
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