Hopefully someone at Shopify spots this
I work closely with a few retail stores in WA,SA,VIC,NSW and QLD that would love to jump ship to a new cloud based POS. Even a store that’s been eyeing Shopify Plus for their online operations as well but won’t pull the trigger because they’d like one system that allows integrated eftpos.
I recently built an app to auto import products from B2B portals Elastic Suite, Brandscope, JOOR, NuOrder & SalesNet so merchants aren’t required to manually enter their products into their POS system. Further, Elastic Suite based brands can easily receive and update stock levels by just entering an invoice number as it pulls that data through from majority of the brands that sync their ERP orders with Elastic Suite
The next step was partnering with the right POS, originally I opted for Shopify/Shopify POS as a unified backend was ideal. Eftpos was added to Shopify Payments at 0.6%, and the new least cost routing law in Australia has made it default gateway for majority of the transactions from cards through eftpos which is good. However after totalling the last 27 payouts, the average fee percent came out to 1.13%. As order transaction exports specify the card networks, I added one stores matching bank-issued terminal rates for each network (eftpos_au, master, visa) including debit/credit which averaged out to 0.45%. Note these rates aren’t actually super great compared to what some legacy stores have. Using the percent averages on net sales of $2m, the store would pay Shopify $22,600 in payment fees compared to $9,000 via bank issued terminals.
Now if we compare a fee structure overall with a similar cloud based POS in Australia, who do integrate with Linkly/bank terminals.
Shopify Costs Retail Store $25,312 in fees per year
1x Annual Shopify Plan $1,368
1x Annual Shopify POS Pro License $1,344
Payment Fees $22,600
Alternative POS Costs Retail Store $12,216 in fees per year
1x Annual core plan with 2x Registers $3,216
Bank Terminal Fees $9,000
That would essentially cover the Shopify Basic Plan if the merchant also used Shopify for online sales. Note this cloud based POS still syncs with Shopify for free. Further, I’m not even factoring in connections to Xero ($22 per month with Shopify vs. Free with Alternative POS). Extra reporting tools required to generated custom inventory reports (I will note the new analytics has come out, however it’s still not up to scratch with reporting custom real time inventory reports). POS Charge & Credit App $50USD/per month, Loyalty Rewards App ($99/month), Heck, even if they charged 0.20% per transaction it would still be less including both Shopify & an alternative POS plan
Shopify may honestly not care to capture this target audience, and they know the value they hold in having a unified system. That being said, would you rather capture 2x retail stores forcing them into the Shopify Payments ecosystem that will eventually catch onto the fees and be forced to swap and share their experience with other merchants, or, capture and competitively compete with Australian cloud based POS providers allowing bank terminals to be used with Shopify POS and having an abundance of retail stores sign up paying for the plan and still capturing Shopify Payments revenue from online sales? Shopify would easily win the POS battle if they integrated with eftpos bank terminals to be used in Australia, telling merchants you can have one unified backend for online/in-store is everything, but it’s not worth paying $13k in extra fees each year.
I try to understand from a business perspective that the fee method would work, but I don’t think Shopify Australia really grasp how much of a missed opportunity this is in not only in generating a ton of stores signing up and paying the plan fees alone but also the fact that so maybe retail stores here aren’t online or using WooCommerce/alternative eCommerce platforms. Merchants know Shopify is #1 for online, they could easily be #1 for Retail/POS by just allowing bank-issued eftpos terminals.