Which Shopify Plan is Best for Dropshipping?

As an aspiring dropshipper, choosing the right ecommerce platform is crucial for your success. Shopify, a top player in the market, offers a wide range of plans tailored to meet dropshipping needs. In this article, I’ll detail each Shopify plan to help you decide the best option for your business.

Which Shopify Plan is Best for Dropshipping?

When choosing the best Shopify plan for dropshipping, it is essential to compare the features of each plan, from the basic to the advanced options. 

Basic Shopify Plan: Features and Limitations

Basic Shopify plan provides a mobile-friendly storefront where you can display unlimited products, ideal for experimenting with various niches and products. It includes built-in abandoned cart recovery to help recapture potential sales. Additionally, you can create discount codes and gift cards to encourage purchases and clear inventory, key strategies for building a loyal customer base.

I could tell Basic Shopify provides the essentials for a cost-effective dropshipping launch. However, consider these limitations for future growth:

• Limited Staff Accounts: This plan restricts you from adding staff accounts, which can hinder growth if you involve multiple people in managing your store.
• Higher Transaction Fees: Compared to higher-tier plans, Basic Shopify comes with a slightly higher transaction fee for each sale you make.
• Limited Reporting: While Basic Shopify offers basic reports, they may lack the depth needed to make informed strategic decisions as your business grows.

Shopify Plan: When to Upgrade?

As your dropshipping business grows, upgrading your Shopify plan becomes essential. The Shopify plan offers a wealth of features. For instance, its inventory management tools help you monitor stock levels, which is crucial for avoiding stockouts even when managing virtual inventory from your supplier. Additionally, detailed reports provide insights into customer behavior and sales data, allowing you to refine your product offerings and marketing strategies to better meet your dropshipping audience’s needs.

Moreover, Shopify includes fraud analysis to safeguard your business against harmful transactions. Therefore, consider upgrading your Shopify plan to enhance your operations as your business expands.

To answer this question, just take your time to consider these factors:

• Increased Sales Volume: The lower transaction fees offered by Shopify can significantly benefit your bottom line as your sales volume increases.
• Growing Team: If you need to involve additional team members to manage your store operations, Shopify allows you to create more staff accounts.
• Data-Driven Decisions: As your business matures, you’ll require in-depth sales data to make strategic choices. Shopify’s extensive reporting equips you with the insights needed for informed decision-making.

Advanced Shopify Plan: Is It Worth the Investment for Dropshipping?

Advanced Shopify unlocks a powerful feature set. But is the investment worth it for your dropshipping venture? Let’s delve into the features and weigh the value proposition:

• International Commerce Features: Simplify cross-border selling with automatic tax and duty calculations at checkout. Additionally, regional pricing allows you to adjust product prices for different markets, maximizing your profit potential.
• Carrier-Calculated Shipping: Offer your customers accurate and real-time shipping rates during checkout, fostering trust and potentially increasing conversion rates.
• Advanced Reporting and Analytics: Gain deeper insights into your dropshipping business with customizable reports and analytics tools. Make data-driven judgments to optimize your business strategy.
• Up to 15 Staff Accounts: Manage large and complex teams efficiently with the ability to create additional staff accounts.
• Lower Transaction Fees: Enjoy Shopify’s most competitive transaction fees, significantly boosting your profit margins on high-volume sales.

Who Should Consider Upgrading to Advanced Shopify?

• Dropshippers with Global Aspirations: If you plan to conquer international markets, Advanced Shopify simplifies the process and equips you to handle complexities like taxes and regional pricing.
• High-Volume Dropshippers: The lower transaction fees offered by Advanced Shopify can translate to significant savings on high-volume sales.
• Dropshipping Businesses with Large Teams: Advanced Shopify allows for more staff accounts for dropshipping operations with intricate structures and numerous team members.

Cost Analysis of Shopify Plans for Dropshipping

When you visit the Shopify Pricing page, you will notice that they offer three main plans listed in the table at the top, from $39 to $399.

Monthly Fees and Transaction Costs

Each plan offers a specific price, but the key difference in price is the transaction fee. This fee combines a percentage of your sale and a flat fee. Let’s delve into the cost breakdown for each plan:

• Basic Shopify ($29/month, annual payment): This plan comes with a 2.9% transaction fee + $0.30 per sale. While budget-friendly for startups, the higher transaction fee can affect your profits as your sales volume increases.
• Shopify ($79/month, annual payment): This plan offers a slightly lower transaction fee of 2.7% + $0.30 per sale, alongside additional features compared to Basic Shopify. Upgrading to Shopify can be cost-effective if your sales volume justifies the lower transaction fee percentage.
• Advanced Shopify ($299/month, annual payment): This top-tier plan boasts the lowest transaction fee of 2.5% + $0.30 per sale. However, the significant monthly cost makes it ideal for high-volume businesses. 

Here’s a crucial consideration: the impact of transaction fees on your profit margin. Let’s say you sell a product for $10.

• Basic Shopify: You’d pay a transaction fee of $0.59 ($10 x 2.9%) + $0.30 = $0.89, resulting in a net revenue of $9.11.
• Shopify: The transaction fee would be $0.57 ($10 x 2.7%) + $0.30 = $0.87, leaving you with $9.13 net revenue.
• Advanced Shopify: The transaction fee dips to $0.54 ($10 x 2.5%) + $0.30 = $0.84, translating to a net revenue of $9.16.

The seemingly minor differences in transaction fee percentages can impact your profits, especially for high-volume sales.

Let’s take a look at this table to have a more comprehensive view concerning the differences between 3 Shopify plans:

Additional Costs to Consider

Besides the cost of Shopify plans, users often invest in premium themes and add-ons. While free Shopify themes are available, many businesses opt for premium themes offering the desired features, functionalities, and design. Premium themes typically cost between $150 (CAD 203.94) and $380 (CAD 516.65).

Here are some common additional costs associated with using Shopify:

• Domain Name: This must be bought separately from a domain registrar, such as Google Domains or DreamHost, typically costing around $16.95 (CAD 22.74) per year.
• Premium Theme: The prices for these themes range from about $150 (CAD 203.94) to over $380 (CAD 516.65).
• Premium Apps and Plugins: The costs vary, ranging from as little as $5 (CAD 6.70) per month to several hundred dollars.
• Time: Building an online store also requires a significant investment of time.
• Development: Occasionally, businesses might hire a web developer or designer to help set up their Shopify site or to address any technical issues.

So, Which Shopify Plan is Perfect for Dropshipping?

The Shopify plan is perfect for dropshipping. In my opinion, this choice covers everything you need as a dropshipping entrepreneur because it offers features specifically suited for this business model. Inventory management tools help you keep track of virtual stock without the hassle of physical storage. Fraud analysis safeguards your business from malicious transactions, a major concern in dropshipping.

Case Studies: Successful Dropshipping Businesses Using Shopify

To gain a better understanding of how different Shopify plans can impact dropshipping success, let’s take a look at some real-life case studies.

Case Study 1

• Store: Meowingstons
• Niche: Cat Apparel
• Products: Clothing & Apparel for Cat Lovers
• Plan: Shopify or Advanced Shopify 

Marketing Strategies:

• Smart and unique website content
• Effective branding strategy
• Social media engagement

What makes them successful: 

• Unique Website Content: Meowingtons showcases its passion for cats through its name and creative website content. You’ll find clever wordplay such as “Shop Meow” instead of “Shop Now,” “Testi-meow-nials” for “Testimonials,” and the catchy tagline, “You Shop. We Give. They Purr.”
• Admirable Mission of the Brand: The team at Meowingtons actively participates in cat fostering through an Office Cats Foster Program. They are committed to evolving into a full-fledged team that fosters and manages their website operations. Furthermore, Meowingtons supports various animal rescue organizations.
• Engaging Customers on Social Media: Meowingtons excels in engagement by encouraging customers and community members to share photos of their cats on Instagram by tagging @meowingtonsco. 

Case Study 2

• Store Name: Venetto Design
• Niche: Luxury Products
• Products: Bedding, Dining, & Home Decor
• Plan: Shopify or Advanced Shopify 

Marketing Strategy:

• Expertly branded, high-quality website
• Customer Marketing
• Email marketing and promotion
• Effective use of images

What makes them successful:

• Dedicated Page for Customer Reviews: Venetto Design improves the shopping experience by making customer reviews easily accessible. They have created a dedicated page for reviews, ensuring customers can view them effortlessly.
• Beautiful and High-Quality Product Images: Their images heavily influence products’ perceived quality and value. Venetto Design prioritizes this by featuring gorgeous, high-quality images that highlight the premium nature of their products, thereby enhancing their appeal.
• Using Gamification to Encourage Email Signups: To boost newsletter sign-ups, Venetto Design incorporates gamification. They engage customers by offering a chance to win a 500€ gift card in exchange for entering their email. 

Wrapping Up

Selecting the ultimate Shopify plan for dropshipping success is a critical decision. By understanding the different plans, and evaluating their features and pricing structure, you can make an informed choice.

FAQs