Paul Rogers

eCommerce, Digital & Magento Consultant

November 16th

Shopify Plus Pricing & Cost of Ownership

For merchants of any size, from new retail brands right up to enterprise-level international organisations, moving to a new eCommerce platform can be an extremely daunting and challenging prospect. Aside from ensuring that the required functionality is present, the platform is robust and reliable and the transition to the new platform is meticulously planned, merchants need to fully understand all of the costs that will be incurred. Some of those costs will be upfront costs, and some will be regular, ongoing costs that need to be planned over a 3 year period.

With Shopify Plus growing in popularity in the enterprise sector, more and more retailers are now considering this platform for their high-growth online store. Examples of well-known eCommerce brands who have recently migrated over to Shopify Plus include Rebecca Minkoff, The NY Times, Chubbies, Kylie Cosmetics, MVMT, Beyond Retro, Gymshark, Venroy, Pavers and lots of others. I’ve been doing more and more work with Shopify Plus over the last 12 months and I’ve been really impressed with the flexibility, ease of use and the total cost of ownership. I’ve done various platform reviews and Shopify Plus has actually come in lower (over a 3 year period, based on a blended cost) than Magento Community (no licensing fee), as well as a number of other platforms.

In this article, we examine the costs involved in moving to Shopify Plus, detailing the base licensing costs, as well as all of the other peripheral costs that are typically incurred when using this platform (such as module costs, payment fees and BAU / maintenance work). Hopefully, with this information, merchants considering a move to Shopify Plus should be able to clearly evaluate Plus’s suitability, in budgetary terms at least.

Rough average annual costs for a Shopify Plus Store

Based on my experience of working with Shopify Plus (which is documented further on in this guide), here’s how I see the rough costs for a mid-level Plus build working out. I’d define a mid-level Shopify Plus project as having around 1,000 products (made up of variants and parent products), single currency / single warehouse, 1-2 relatively straight-forward integrations (e.g. a mainstream order management platform or ERP), a handful of third party apps etc and a custom theme / front-end. These projected figures are based on the first year of trading on Shopify Plus and are purely based on my experience so far.

  • Average build cost for Shopify Plus (in my experience) – $85,000
  • Annual Shopify Plus licensing cost – $24,000
  • BAU development costs (in my experience) – $36,000
  • App costs (average) – $3,000 ($250 per month)

First Year Shopify Plus Cost: $148,000

Three Year Shopify Plus Cost of Ownership: $267,000

This is excluding the payment gateway fees, which are more favourable if you use the Shopify Payments option, as detailed below.

Shopify Plus base licensing costs

The first step in a solid understanding of the likely costs of replatforming to Shopify Plus is to look at the base costs of a Shopify Plus license. As with many enterprise platforms, detailed information on pricing can be hard to find on Shopify’s website, since Shopify naturally wants to open a dialogue with potential new merchants before releasing price information. However, it is possible to calculate the fees charged by Shopify for use of the Plus platform, without having to talk to the Shopify sales team.

Pricing for Shopify Plus is based on usage and trading volumes. As Shopify Plus is a fully hosted platform, this seems reasonable, since the more active your store is, the more resources and bandwidth your store is using. There is a minimum monthly license fee of $2,000 and a maximum monthly fee of $40,000.

Unless a merchant is achieving monthly sales of $800,000 or more, the monthly licensing fee for Shopify Plus would be $2,000. With a $1,000,000 a month turnover, the fee would be $2,500. To reach the maximum monthly license fee, a merchant would need to be reaching sales of $16 million per month, which isn’t something that is routinely achieved by many Shopify Plus stores currently, but there are some very high performance stores trading on the platform, such as Kylie Cosmetics. The pricing structure for Shopify Plus positions the platform at the low end of the enterprise camp and the total cost of ownership is really competitive.

We’ve briefly mentioned payment processing costs as an additional cost alongside the base license costs for Plus. We will now look at these in more detail, as well as at the other key costs that merchants should be prepared for.

What does Shopify Plus provide for this cost

When speaking with smaller merchants about Shopify Plus, they’ve often been unsure on the platform because of the base $2k per month cost, especially when comparing with Magento Community Edition – however, in my experience, the costs are actually either directly comparative or lower when you factor in maintenance costs, hosting fees, version upgrades etc (which are all included in the Shopify Plus license.

One of the biggest selling points for Shopify Plus is the account management, which is designed to provide a basic support provision. As part of the monthly fee, merchants are assigned an Account Manager (as well as a launch manager initially to get them through the launch process), who would generally provide the following:

  • General Shopify admin support / suggestions
  • Basic front-end development work (~3 hours of tweaks or module installs etc per month)
  • Guidance around growing your store
  • Onboarding support (alongside the launch manager)
  • General Shopify Plus solutions advice (e.g. suggestions for third parties etc)

In addition to the account management offering, Shopify Plus costs also include all hosting costs, which can often be expensive in terms of actual bills and the overhead for your eCommerce team. Generally, in my experience, hosting will cost anywhere from $500 to $5,000 for a mid-level retailer, so this can be a really big benefit. As part of this, Shopify Plus also manage scaling too – which can take a big load away from your team going into peak.

Shopify Plus also includes native multi-channel capabilities, which can reduce costs of third parties considerably. Shopify have their own POS solution and integrated solutions for selling via Facebook, eBay and Amazon – which can also save a lot of time (mainly around maintenance) compared to other solutions.

Payment processing (via Shopify Payments) costs

As well as Shopify Plus’s transaction-based licensing costs, merchants will have to pay payment processing costs to a payment gateway, whether they choose to use Shopify Payments or they decide to select another third-party processor.

Taking Shopify Payments first, payment processing costs will be 1.6% + $0.35 (in the UK, this would be 1.6% + 20p) per transaction. Using a third-party payment processor may mean lower charges than Shopify Payments can offer, so it is definitely worth shopping around (although they do also charge a 0.15% fee for using third party payment providers).

When working out likely costs, it is worth taking into account the lower rates for the base Plus license that are charged if a merchant is using Shopify Payments. These will only become a factor once the merchant has moved well beyond the minimum payment threshold, but they should not be ignored.

Shopify App costs

Like most other eCommerce platforms, Shopify Plus has strong baseline functionality, but usually requires additional third-party apps to provide more robust, enterprise-level functionality, such as enhanced SEO tools, more comprehensive visual merchandising, personalisation or better on-site search etc.

Unlike apps for other platforms such as Magento, where a one-off license fee is the norm, Shopify Plus’s third-party apps are made available on a monthly licensing basis. Whilst this has the advantage of low cost of entry for each app required, those costs can soon add up to quite a big monthly overhead. As such, a careful examination and cost justification needs to be undertaken for all apps that are specified in the initial build. Certainly, there are free and very low-cost apps available in the app store, but as with everything in life, you do get what you pay for, and the more enterprise-focused apps will typically cost anything from $50 to $500 per month.

NOSTO, Loyalty Lion, Klevu and Dotmailer and BOLD Commerce are all good examples of companies who provide very strong apps for Shopify Plus stores, but at a higher monthly cost. The first four of those companies integrate with lots of other platforms and are well-known, marketing leading providers.

A functional assessment needs to be undertaken at the start of a replatforming project really, to determine what elements of required functionality are provided by core Shopify Plus, and what elements will need to be provided through third-party apps or custom development qork. An evaluation of the various apps available should then be carried out, to determine the closest fit and best value for money.

Of course, one of the benefits of a monthly license fee for third-party apps is that the initial launch costs are much lower than if the app was being purchased on a standard license. Also, should it later be found that the app doesn’t perform as expected, or that its functionality is no longer required, the monthly license can simply be terminated.

Should a merchant find that their store requires specific functionality that is not available through the core Shopify Plus platform or through a third-party app, then the only remaining route for sourcing that functionality is to have a customised solution developed, preferably using a Shopify Plus partner.

As with any ecommerce platform, any bespoke functionality is likely to be the most expensive solution, but in some cases, it is the only solution. Merchants should consider whether the functionality is genuinely required, conduct a thorough investigation into third-party apps, and investigate whether a change in operational procedures or other elements of the store could remove the need for the bespoke coding. If a bespoke solution is needed, costs are dependent on the level of complexity of the code, and the size and scope of  the functional requirement. Typical development costs would range from $90-$175 per hour, and merchants should be clear that bespoke solutions will always mean that any future maintenance or extension of the bespoke code will be just as costly to commission.

Initial Shopify Plus Design & Build / Agency Costs

As with any eCommerce project, budget needs to be allocated to the design and build of the store, to ensure a professional and properly planned launch. Whilst there are, of course, templates which can be purchased for Shopify Plus, most enterprise merchants (and retailers using Shopify Plus) will either want to design their own store, or will want to extensively customise a commercially available template, to give them their own unique look and feel that matches their branding etc. Again, it pays to shop around to find a talented and reliable design agency with strong Shopify Plus skills – my standard recommendation for both UK and US merchants is WeMakeWebsites – I’ve worked with them before and they’re very strong on both development and creative and they’ve worked with lots of big stores and big brands. An agency like WeMakeWebsites are able to provide very strong design and build skills, along with project management, bespoke development and marketing support.

Of course, every Shopify Plus project is different, and merchant requirements and catalog sizes vary enormously. Enterprise level project launches are typically significantly shorter for Shopify Plus than some other eCommerce platforms, however, and this should be reflected in the overall agency costs. As a very rough example, project costs for the average $10m turnover online business (~1k SKUs, single currency, single storefront, 1-2 integrations etc) could run from $130,000 to $250,000, with larger merchants with more complex needs potentially paying considerably more than that. Shopify Plus builds tend to be more in-line with $75,000 – $100,000 for these kinds of projects in my experience.

Conclusion

Hopefully, this breakdown of the typical costs involved in using the Shopify Plus platform will leave potential merchants with a much clearer idea of what is involved. For those merchants who are currently handling sales volumes of less than $50,000 per month, the figures should explain why Shopify Plus is generally not as well at this stage, unless the company is forecasting considerable growth. For larger merchants, however, it should provide a clear picture of the likely costs involved, both for the core platform and for all of the supporting elements required to build a business on this platform. In my experience, Shopify Plus has been very cost-effective in comparison to competing platforms like Magento Community, Magento Enterprise and Demandware / Salesforce Commerce Cloud.

With this information to hand, merchants should be well positioned to open a dialogue with Shopify about the Plus platform, to start working on a requirements document and an RFP, and to begin the selection process for a partner agency to work alongside.

 

You can also read my guide to Magento 2 vs Shopify Plus here.

Paul is an experienced eCommerce Consultant, specialising in working with eCommerce technology.

Paul works with online retailers and product companies from all over the world and is focused mainly on helping merchants get more from their eCommerce technology and growing stores (customer acquisition, customer experience, strategy etc).

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