Why Not Shopify?
Shopify is a fantastic platform, and it seems like everyone is talking about it these days. They have beautiful templates, tons of apps, a huge amount of cash to invest into the platform, and a robust community of developers and designers. So why don’t you see it as a supported cart here at Ryan Design Studio? Quite simply, it just isn’t a good fit for most of our clients. Here’s why.
While it may seem like a great deal at $29/month, that number can be deceiving as it doesn’t include everything. There are some very basic and important e-commerce functions missing in the base version including:
- Real-time USPS, FedEx and UPS shipping rates. If you want those, you need to go with the Advanced plan at $299/month
- Abandoned Cart reminders – you need to upgrade to the Shopify plan at $79/month to get those
- Gift Cards – also only in the Shopify plan and above
- Sales reports – no reporting until you get to the Advanced plan
You also have to factor in the cost of credit card processing. If you want to use your own processor like Authorize.net or PayPal Pro for example, Shopify will take up to 2% of your sales as a ‘transaction fee’. That is in ADDITION to the actual credit card processing fees, which are typically 2.9% or so. If you are selling $100,000 worth of goods a year, that’s an additional $2000/year just to use the processor of your choice.
Shopify has a TON of apps you can add to your store, everything from reward points and third party shipping vendors. But many of those can cost over $100/month to use. Notice a trend here? The monthly costs of the site can easily go over $1000 before you even start selling anything. Here’s a quick cost comparison of Shopify vs Pinnacle Cart assuming $100,000 in yearly sales:
Initial cost: +/- $4000 (includes a custom design, not a template)
Monthly Hosting Cost: $35
Monthly License Fee: $25
SSL Certificate: $75/year
Payment Gateway: $30/month
Transaction fees (other than what your gateway charges): $0
First Year cost: $5155
Recurring Yearly cost after the first year: $1155
Initial Cost: $150 (a premium template from their store)
Monthly Cost: $299 (to get all the base functionality Pinnacle has such as real-time shipping, reporting, abandoned cart reminders)
SSL Certificate: $0
Payment Gateway: $30/month
Transaction fees: $500
First Year Cost: $4598
Recurring Yearly Cost after the first year: $4448
While Pinnacle Cart may seem more expensive, just look at those recurring costs after year one. By year three you are saving over $3000/year. You also get a custom design with Pinnacle, whereas you are using a stock template with Shopify. Adding a custom design to Shopify would add $1000 to $5000 in initial cost depending on who you hire.
Shopify and Wholesale
The biggest hurdle for most of our clients though is the lack of wholesale functionality in Shopify. Want to offer different payment methods for your wholesale customers like PO or Net 30? Sorry, can’t do that. Want to offer free shipping to retail but not wholesale? No can do. Want to offer freight or LTL shipping methods for your large wholesale orders? Nope. Want to have different order minimums for your wholesale customers? Can’t do that either. Need quantity break pricing or tiered pricing for your wholesale members? You’ll need an app for that.
If wholesale is a big part of your business, your only option with Shopify is to run a completely separate storefront which is far from ideal.
One of the limitations with SaaS carts like Shopify is the inability to access some areas of the code. This is done so that Shopify can easily upgrade and maintain the software and maintain PCI compliance, so it is a good thing. However, if you want to do anything custom with the checkout or tie in third party systems using Shopify’s API, you will need to upgrade to their Plus plan which starts at a whopping $2000/month. That’s $24,000/year! If you start selling more than $800k/month, they will start charging you .25% of your revenue. That is just too big of an operating cost to justify. With Pinnacle Cart, we can easily custom-program any functionality you need. Just take a look at our add-ons page to see some of the features and functions you can add to your store. There is no additional monthly cost to add these, just a one-time programming fee.
So Why Not Shopify?
If you use Shopify’s payment gateway and don’t need any additional functionality, Shopify would be a great platform for your business. I usually recommend it for businesses who are just starting out, moving away from Etsy or Ebay, smaller companies who sell retail only, or stores that don’t plan on growing too large or selling wholesale. If you are planning on selling wholesale, or need custom functionality not available by default or as an app, Shopify just isn’t going to be a cost effective platform or give you the flexibility you need to scale up in the future.