Shopify makes money through a combination of subscription fees, transaction fees, and other services. Here’s a breakdown of how Shopify earns money:
Subscription fees: Shopify charges monthly subscription fees to merchants who use their platform to set up and run their online stores. The fees vary depending on the plan chosen by the merchant, with higher-tier plans offering more advanced features and lower transaction fees.
Transaction fees: In addition to subscription fees, Shopify charges transaction fees for each sale made through its platform. These fees are typically a percentage of the sale amount and vary depending on the merchant’s plan and the payment method used by the customer.
Payment processing fees: Shopify also earns money by providing payment processing services through its Shopify Payments system. Merchants who use Shopify Payments are charged a processing fee for each transaction, with the fee varying depending on the merchant’s plan and the country they are based in.
App store commissions: Shopify has an app store that provides merchants with access to a wide range of apps and plugins to enhance their online stores. Shopify earns a commission on each app sale made through its store.
Other services: Shopify also offers a variety of other services to merchants, including website design and development, marketing and advertising services, and shipping and fulfillment services. These services generate additional revenue for Shopify and help merchants grow their businesses.
Overall, Shopify’s revenue model is based on providing a range of services and tools to help merchants sell products and grow their businesses online. By charging subscription fees, transaction fees, and commissions, and offering additional services, Shopify has built a successful and profitable business model.