3% sales commision

New Member
5 0 0
Is this 3% sales commision fee in addition to what the gateway merchant charges? Or if you have a merchant account, the link you in at 3% so they really make .05%-1% in profit? (usually 2.35%)
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Shopify Partner
253 0 0

The 3% fee is a separate fee and is taken from the credit card you have on file with Shopify. It wouldn’t make sense to bundle those fees because of the different payment options.

Cliff Spence
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New Member
5 0 0

So…with Shopify I would be paying 2.2% to my credit card processor + 3% to Shopify? Over 5% on all transactions? That just seems a little steep, with internet retail being so cost competitive. I am I missing something? Sell me.

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Shopify Partner
253 0 0

The idea here is that you pay nothing out of pocket to get set up, unless you require custom development of your theme. You don’t have to bother with hosting, security, backups, maintinence, etc., and there is no set monthly fee.

Most of the work I do is in mid-range ecommerce where merchants often spend $20k+ to get set up. Shopify is a nice alternative for those who want to start selling quickly and don’t want to, or cant bother with the rest, including software, monthly hosting costs, etc.

Shopify doesn’t fit all business models… a lot of the people I work with require the customization, control and integration that you just aren’t going to get with a hosted service, but it really works great for the rest, and the ability to customize the front end really does outdo the rest.

3% is really pretty good from a big picture perspective, you just factor it into the cost of business like anything else.

Cliff Spence
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Shopify Staff
Shopify Staff
2002 0 41

Shopify will always be cheaper then the lazy sales clerk who plays solitair all day ;)

Personally i really like this blog post on the subject matter http://justinfrench.com/index.php?id=155

Tobias Lütke - Shopify CEO // http://twitter.com/tobi
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Shopify Partner
253 0 0

Excellent post, Justin is right on the money. If Shopify fits your model, you can’t loose.

The most exciting thing to me is how perfect Shopify is for those who are experimenting in the ecommerce space, or with a new type of product. The concept has me constantly thinking, “what if?” :)

Cliff Spence
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Shopify Partner
283 0 2

Jman,

Think about it this way.

If I decided to go to a professional web design company within my local area it would cost me at least $5000 to get a site which was comparable in design and technical quality.

I know this because I used to work for 2 of the top local web design companies, and I know thier prices and competitor prices.

Shopify charges nothing upfront and 2% if you’re doing over $10,000 worth of business a month.

So, for it to be worth my while to pay the $5000 upfront, the cost of paying 2% would need to be over $5000 (for arguments sake I’m going to say in my first year). That means I’d need to be selling $250,000 of cornish pasties (in my case) a year.

And that’s just if I want to cover the cost of developing the site – really I’d need to have turnover of $500k – $1 million for the 2% fee to start being too expensive to justify.

Hopefully, I’ll reach that level of turnover, and if I do I may consider paying a web developer to do a custom site, but in the mean time 2%-3% seems like a very good deal.

The way I look at it, shopify are offering me free web design and development.

:o)

Richard Quick http://www.thepasty.com

Richard Quick - Finalist: SxSW Web Awards 2009 (CSS Category) - SEO and Web design - http://www.successfulsites.co.uk - http://www.mailright.co.uk
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