When Should Brands Upgrade to Shopify Plus?
What is Shopify Plus?
Shopify calls the Plus plan its “All-in-one solution for high-volume businesses”. It’s meant to fill the needs of quickly growing brands with large teams that have needs such as:
- Managing up to 200 inventory locations
- Selling to up to 50 markets
- Unlimited staff accounts
- Customizable checkout
- Selling wholesale/B2B
- Up to 200 (physical) POS locations
That's just to give you a sense of the scale of businesses that are using the Plus plan. Brands such as Allbirds, Glossier, Gym Shark, Kylie Cosmetics and Brooklinen are all using Shopify Plus, as well as thousands of smaller brands too. In addition to the plan features listed above, Shopify Plus merchants also have access to additional features designed for high-growth merchants which we’ll get into later on.
Reasons to Upgrade to Shopify Plus
There are 2 main reasons you’d want to upgrade to Shopify Plus:
- You need features available on the Plus plan.
- You’re making enough sales that the cheaper transaction fees save you money.
Let’s dive into these each more.
Shopify Plus Features
Shopify Plus plans gives you access to some neat features such as:
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Checkout apps so you can insert testimonials, icons/images, and upsells directly on the checkout page. See how below Tuft + Paw has added “Recommended” products under the cart items and has added trust building icons under the total price:
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Post-purchase apps so you can insert upsells or additional information on this page. This means after the customer has paid, they can continue interacting with the checkout. We've seen it used as a way to collect information like "How did you find out about us?" or by inserting upsells such as "Get this product for 50% off for the next 20 minutes only".
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Access to APIs: Some apps will require a certain tier of plan to use. I was recently implementing an app that calculated postage based on the postal code, and encountered this requirement. The one shown below isn’t Plus-specific but they can be at times!
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B2B/Wholesale sales channels: Apps that allow selling B2B or wholesale, as well as the ability to create theme templates exclusively for B2B customers.
Read all the features here. If these features listed above are something a brand needs today or will soon be needing in order to meet growth goals, then the Plus plan is something to consider.
Lower Processing Fees
Shopify charges a small fee to accept credit card payments in store. The fees depend on the plan chosen. If you look at the plan options below, under “Card rates starting at” you’ll see that Plus plans have lower payment processing fees than other plans. So when brands reach a certain volume of sales, they begin saving money on fees by upgrading to the Plus plan, even if the plan is much more expensive (jumping from $299 to $2,300 USD/month).
How to know exactly how much you spend on transaction fees? It’s not as simple as calculating around 2.5% + $0.30 per transaction, because different credit cards and different payment processors (like PayPal and sales through social media) each have different fees. But you can get the exact value how much has been paid in payment processing fees by a store by inquiring with the Shopify Plus team. They’ll tell you how much you spend annually on processing fees, and how much that would change if you were on the Plus plan with lower fees.
In my recent experience inquiring with the Plus team about one specific store, the “break even” number where fee savings and additional spending on the Plus plan was about $5 million in sales each year. However, even before reaching the break even point, the sales team will (in my experience) still tell you that the additional cost is worth it because of the potential to increase sales with access to new features. Below is the chart they showed me, showing how revenue numbers could possibly increase if conversion and AOV rates increased.
The Shopify Plus sales team will explain to you the potential to earn more if conversion rates and AOV (average order value) increase with the help of the new features. Of course, these increases are not guaranteed. During my inquiry, the sales person was quite insistent that the upgrade is an investment that leads to increased sales, which is not necessarily true. The sales person does not know the unique circumstances, plans or needs of your business so it’s really important for brands make this big decision internally, rather than listening to the sales person. Their job is to sell after all.
Overall, the Plus plan is great for brands that are expanding their footprint internationally or to physical brick and mortar locations, as well as brands who are actively trying to increase conversions and AOV with various tools.
Hopefully this has given you some insight into what types of brands would want to upgrade to the Shopify Plus plan.
Hana Drdla
