Essential Shopify Pricing Strategies to Follow

Essential Shopify Pricing Strategies to Follow

It is vital to understand that choosing the correct prices is essential since it is considered a balancing act. For example, if you choose a low cost for any product, the sales margin will increase. However, you might not notice any significant profits. Alternatively, if you choose a high price, you will face fewer sales and price out.


The reason behind this is the budget-conscious customers will not show interest in your products. As a result, you might lose a significant amount of market share. Therefore, just like every small business, you have to do some essential homework.


Retailers have to work on revenue goals, business, and production, competitor pricing, etc. Still, quoting a new price for any new product or just an existing product line is not pure math. The reason behind this is numbers react logically. In contrast, humans behave in a complex manner.


Related: Is Shopify Legit?

Pricing Strategies for All eCommerce Businesses

Significance of Shopify Pricing Strategies

This is primarily the calculation you use to set the retail prices of your products that you are selling. Although the Shopify sellers do not have to follow the marketplace guidelines; however, you have to profit.


In case the prices are not comparable with the competition, your potential customers would not convert. Moreover, if the prices do not provide the exact value like the online marketplaces, your customers will switch.


Therefore, before you jump to the Shopify pricing strategies, make sure to adopt such a strategy that you can afford. Ensure the product costs that include product cost that provides for supplier fees, freight forward costs, and the shipping cost.

Shopify cost is also necessary to consider, including store fee, developer fee, Shopify plugins, etc. Here are a few pricing strategies that you must diligently follow.


Related: How much does it cost to start a Shopify Store?

Premium Pricing

It involves product pricing that is more than your competitors. Different brands mainly use such pricing strategies for marketing purposes. Premium pricing helps in brand marketing, which results in prestigious, luxurious as well as exclusive.

For example, you are paying high prices for Starbucks coffee, although they are not the best. However, people agree to pay a high price since they always try to balance high prices with the best quality.


Although the strategy involves various risks, you can get a high profit if you follow the process correctly.

Retail Pricing

Retail pricing is yet another common pricing strategy that involves markup percentage depending on the product you sell. When keystone pricing creates a too high or low figure for the target audience, this strategy is used.


The most significant advantage of using this strategy is, you have complete control over the final product price. However, it has a downside too. If the product prices doubles, the keystone pricing can lead to overpricing. Also, it becomes difficult to find out the correct markup for applying.


Therefore, these are a few effective Shopify pricing strategies. Pricing products is quite tricky. However, following these strategies, it becomes easy to price the products.


Related: Shopify pros and cons

Overview of Basic Shopify Plan

The Basic Shopify plan is an entry-level plan that offers a range of features to help you get started with your ecommerce store. Here are some of the highlights:

  • Analytics page, finances reports, product analytics, Live View, acquisition reports, inventory reports and behavior reports
  • $39 per month ($29 per month if paid annually)
  • Transaction fee of 2.9% + $0.30 per transaction
  • Includes core features such as unlimited products, 24/7 support and access to the Shopify app store

Exploring the Shopify Advanced Plan

The Shopify Advanced Plan is the perfect choice for businesses that are looking to take their ecommerce operations to the next level. With this plan, you get access to a range of features that help you manage your business more effectively and efficiently.


Here are some of the features of the Shopify Advanced Plan:

  • Cross-border management tool that lets you configure specific settings for international customers
  • Discounts if you start paying annually and longer
  • 2.4% for credit card payments (2.4% in person) and an additional 0.5% fee if you're not using Shopify payments
  • Advanced report builder and real-time carrier shipping
  • Ability to sell large volumes of products with ease


The Shopify Advanced Plan is designed to provide businesses with all the tools they need to succeed in their ecommerce operations. With its comprehensive set of features, it can help businesses increase their sales, improve customer service, and manage their finances more effectively. So if you're looking for a powerful ecommerce solution, then the Shopify Advanced Plan is definitely worth considering.


Related: How to set-up Shopify Calculated Shipping?

Comparing Shopify Plus vs. Advanced Plan

When it comes to choosing the right Shopify plan for your business, you need to consider the features and pricing of both Shopify Plus and Advanced Plans. This comparison will help you decide which plan is best suited for your needs.

table comparing shopify plus vs advanced plan


As you can see from the table above, Shopify Plus offers more advanced integration capabilities, such as the ability to build custom integrations which is a need of large stores. However, if you are looking for a cheaper option then Advanced Plan might be the right choice for you as it has a flat rate of $299 per month with additional fees on transactions. Ultimately, it's up to you to decide which plan is best suited for your business needs.

Understanding Additional Fees for Shopify Store Owners

For transactions where taxes are calculated, an additional fee of 0.35% will be applied after $100,000 in sales. This fee is capped at $0.99 per order and $5,000 per year.


The Basic Shopify plan charges 2.9% + $0.30 per transaction, while the Advanced Shopify plan drops just half a percentage point to 2.4% + 30 cents per transaction. The in-person card transaction fee is also 2.5%, with no additional fees for using Shopify Payments when paying with credit cards or other payment methods supported by Shopify Payments.


If you're looking for a more customized plan, there's also the bespoke plan which starts at $299 per month and offers 2.6% plus 30 cents per transaction for online purchases and 2.7% fee per transaction for in-person purchases.

It's important to consider all these fees before setting up your store on Shopify so you can make sure they fit within your budget and business model.


Related: Square Vs Shopify: Find Out Which Ecommerce Platform You Should Use

Tips To Help Costs Low on Your Shopify Store

Here are some tips for reducing your Shopify expenses:

Choose the right plan

Shopify offers different plans with varying features and prices. Make sure you select the plan that best suits your needs and budget.

Use free themes

Shopify has a wide selection of free themes available for you to choose from. These themes offer basic design and functionality, so you don’t have to spend money on premium themes.

Utilize discounts and coupons

Take advantage of discounts and coupons when shopping for products or services related to your store. This can help you save money on things like shipping, hosting, and other services.

Take advantage of free apps

There are many apps available in the Shopify App Store that offer great features at no cost or discounted rates. Look for these apps when setting up your store to save money on additional features or services.

Negotiate with suppliers

If you’re buying products from suppliers, try negotiating better terms such as lower prices or bulk discounts to reduce costs associated with purchasing inventory items for your store.

Outsource tasks

Outsourcing certain tasks such as content creation, customer service, or product photography can help you save time and money in the long run by freeing up resources that could be used elsewhere in your business operations.

Conclusion

Setting up and running a Shopify store can be expensive. However, there are strategies you can use to reduce costs associated with your ecommerce business. Be sure to explore the different plans offered by Shopify and take advantage of discounts, free apps, and coupons when available. Additionally, consider outsourcing certain tasks and negotiating better terms with suppliers in order to keep costs low on your Shopify store.


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