Is Shopify legit?
Yes. Shopify is a legitimate business that started in 2006. It's a company that primarily sells what's called an “ecommerce platform,” for constructing online stores, usually with little coding knowledge. This way, even beginners can launch their businesses with beautiful websites and payment processing tools to sell online. Shopify started in Canada and now has multiple facilities and offices around the globe. It's also listed on the New York Stock Exchange, and powering over 2.2 million online stores.
So Shopify Isn't a Scam? What About Hidden Fees?
Absolutely not. Shopify runs a sound business, and it has become one of the most prominent solutions for building online stores.
There's not really even a way to lose your money unintentionally with Shopify, considering the entire subscription process is so transparent. Shopify makes money by charging for subscriptions, where store owners pay a monthly fee (usually around $29 per month, but it ranges from $9 for Shopify Lite to $299 per month for Shopify Advanced) then cancel whenever they want. The Shopify website is filled with information on what you receive after signing up for a subscription, and you can also sign up for a 14-day free trial to test out the SaaS (software as a service) without having type in any credit card information.
Each Shopify store owner receives invoices in their dashboard and email, meaning you're not thrown off guard by monthly charges. Furthermore, Shopify does a wonderful job of itemizing your charges, and there are no hidden fees outside of the usual taxes you should expect to pay. But in our experience using Shopify, they never tack on any “service” or “admin” fees, so it's a nice reprieve from some other companies you see that with.
Keep in mind, however, that the monthly ecommerce subscription isn't the only way Shopify makes money; far from it.
In fact, Shopify gets revenue from payment gateway fees, hardware sales, app store sales, referral fees, theme sales, the Exchange Marketplace (a place to buy and sell established ecommerce stores), email marketing, domain sales, Shopify Capital, fulfillment, and investments.
So, is Shopify legit in the way it handles its additional products and services? Are you going to get hit with some extra transaction fees or be required to purchase apps in order to run your store?
Well, it's a guarantee that you have to pay credit card transaction fees; all online stores do. But Shopify doesn't take any additional transaction fees, which is rare considering you see that with many competitors. It's the credit card companies taking the processing fees, usually around 2.9% + $0.30 per transaction.
Yet, Shopify explains these fees on their pricing page, so it's tough to argue that they're anything but transparent.
Is Shopify Legit with its Apps and Themes?
Many people feel it's “scammy” to sell a software or app only to pretty much require the use of add-ons, extensions, or plugins that cost more money.
Luckily, there's absolutely no requirement to buy an app or theme for Shopify to run properly. You receive all the essential ecommerce tools with your subscription, including:
- Integrations with payment providers like Shopify Payments and PayPal
- Support for unlimited products
- Dropshipping options
- Multi-channel selling on sales channels like Amazon and eBay
- Shipping and tax settings
- Domain name services (although you still have to pay to buy the domain names)
- SEO tools
- Social media marketing options
- A full checkout and shopping cart for your ecommerce website
- SSL certificates
- Storefront product galleries
- Page templates
- Customer support
- Protection from fraudsters
- PCI compliance
- Inventory management
- A free Myshopify.com subdomain
- Real-time stats
So, there's not really a need for beginner merchants and smaller stores to even mess with the app store. Having said that, it's not required to opt for paid apps when you go to the app store. Shopify offers hundreds of free apps, many of which are categorized and easy to find in the marketplace, helping you expand upon the built-in features and improve your store in the process.
The same goes for themes. Shopify offers a handful of beautiful free themes to keep things affordable for all merchants. There aren't nearly as many free themes as they used to have, but that's hardly a reason to consider them scammers. Just remember that at some point you'll probably want to opt for a premium theme and some paid apps. Why? Because many of them are designed to boost your revenues, so you can make back your money in no time.
Most of the premium apps range from $5 to $100 per month, depending on the type of product and service offered. Shopify templates get a little pricey, but they're only one-time costs ranging from $50 to $300.
And business owners can rest easy knowing that this pricing is close to the industry standard; you won't find any cheaper theme or app pricing from the likes of Bigcommerce, Wix, or WooCommerce (in fact, WooCommerce requires far more premium plugins to run an actual online store).
So, none of the extra Shopify fees are hidden, and you can choose to opt out of most of them.
Here are the optional Shopify fees that you may never need to pay in the first place:
- Shopify apps
- Shopify themes
- POS hardware
- Extra processing fees for third-party payment gateways (if you don't go with Shopify Payments)
And here are the guaranteed fees you'll incur (some of which require some sort of action to happen):
- Your monthly Shopify subscription
- Credit card transaction fees
- Chargeback fees (only if a customer makes a chargeback on their credit card)
- Domain name pricing (usually around $10 per year)
What About Those Credit Card Fees? That's a Lot of Extra Money!
You're right. Credit card processing fees usually start at around 2.9% + $0.30 for every transaction you process. That becomes expensive if you sell high-priced items, but it also cuts into your margins if using the ecommerce solution to sell lower-priced items, since you're probably processing more transactions and not getting as much money per sale.
Regardless, this is an industry standard as well. It's how credit card processing companies like Stripe, PayPal, Authorize.net, and Square have always made their money, and it helps them uphold the infrastructure required to keep your transactions secure.
The good news is that Shopify is clear about its credit card processing fees. Not to mention, you receive the same Stripe functionality you would get with any ecommerce platform, except with no extra transaction fees through the ecommerce platform. In addition, payment processor fees decrease as you upgrade your Shopify plans. For instance:
- The Shopify Basic plan sells for $29 per month with a 2.9% + $0.30 online credit card fee per transaction
- The Shopify plan sells for $79 per month with a 2.6% + 30% online credit card transaction fee
- The Advanced plan sells for $299 per month with a 2.4% + $0.30 online credit card transaction fee
As you can see, the credit card fees go down as you upgrade—as your business grows. Sure, you're paying more money for the subscription, but a thriving business should also make more money. And Shopify is one of the few ecommerce platforms that offers this type of structure. It's very rare to get any type of discount on payment processing fees other than with the Shopify platform. The Shopify Plus plan users (for enterprises) even get more customized transaction fees.
The only additional fee that comes with payment processing is if you opt for a third-party payment gateway that's not Shopify Payments. Our past Shopify reviews have shown that third-party transaction fees range from an additional 0.5% to 2% depending on your subscription plan. That may look like a slight hidden fee, but at least Shopify displays it on their pricing page.
We'd argue that it's annoying, and somewhat forceful, to push all Shopify users to one payment gateway, but it's part of their business plan to get more customers using their own processing tools. But we definitely feel for some merchants, because not everyone can use Shopify Payments (because of industry or location-based restrictions), and it's not always the most economical choice depending on your operation.
Is Shopify Legit When it Comes to Safety?
For small businesses and large enterprises, one of the main concerns when talking about ecommerce is safety. We're talking safety for the customers that go to Shopify stores, as well as protection from fraud and back-end attacks for merchants.
To begin, Shopify has a strong selection of tutorials on its website to guide you on how to protect your website as a merchant. What's even better is that you don't have to worry about much to begin with. An ecommerce business that uses Shopify removes the hassle of overall security, because it's all built into the system.
To begin, Shopify maintains a robust security infrastructure to block fraudsters, backend attacks, malicious software, and everything from malware to viruses.
Some of the elements that work in the background of every Shopify store include:
- Automated Shopify account locking when a person or bot tries to access your website in an unusual nature, or if they try to break in multiple times.
- Two-factor authentication, where online business owners receive security notifications with codes to log into their accounts. This means you must log in with two devices, but it's an easy way to block intruders.
- Identity confirmation tools which send out notifications to ecommerce site owners when something suspicious occurs, or if there hasn't been a login to the account for over three months.
- SSL (secure socket layer) certificates: A free certificate that adds HTTPS protocol to your site, encrypting all transactional data that passes through. This is essential, and often legally required, in order to run an online store with payment processing. Therefore, Shopify owners can add a Buy button within seconds without having to worry about SSL.
- TLS (transport layer security): This is actually a replacement for SSL, since it's a newer form of protocol for online stores. Most newer Shopify stores implement this type of transactional protection because of its ability to block malicious external scripts, and because it's easier to protect both the shopper and merchant.
- Cloud-based hosting and website building: Everything from Shopify is run using state-of-the-art cloud-based technology, meaning you don't have to manage your own server, worry about flaws in the ecosystem, or even think about speed. Not to mention, the ease of use of the website builder is difficult to beat.
Haing said that, it's still possible for some intruders to find their way into your website. It's very rare, but as your business grows, you're more likely to become a target.
This has nothing to do with whether or not Shopify is legit, however. It's merely a reality of doing business on the internet.
Therefore, we recommend following these procedures to ensure the safety of your customers and your overall business:
- Schedule automated backups: Shopify automatically stores database and website backups, but there are other ways to include multiple backups for added protection. You can install a backup app or even run an external backup to secure locations, or directly onto your own cloud system or office-based server. Regardless, start with the auto-backups from Shopify so that you always know that your inventory, designs, customers, and content are saved in case something happens to your website.
- Block the public from sensitive content: Shopify offers a few apps to block certain parts of your website, whether those pages include sensitive business information, or they're used by admins who need access to certain parts of the website.
- Use a password manager, and regularly change your password: This is particularly important if you have multiple users on the same Shopify website. One user with a bad password could give a hacker access. Overall, we recommend using a password manager so as not to reuse a password you use on multiple sites. Password managers also generate extremely strong, unique passwords for your store that you never have to remember. Finally, it's not a bad idea to change those passwords from time to time, making it extremely difficult for someone to hack your site.
Warning: Shopify is Legit, but it's Still Possible to Get Scammed
We'll repeat it once more just to clarify: Shopify is legit, and it's not a scam in any way. It's one of the safest, most robust ecommerce platforms on the market, so we couldn't think of a better place to start an online business.
However, the internet is a tricky place. So even Shopify can't always protect shoppers and merchants from potential scams that linger around.
Let's start with merchants scams. Although Shopify does a great job of protecting merchants, some risks include:
- Shopping fraud: There are multiple tactics to look out for, but the main ones involve someone pretending to be someone else, using false payment information, lying that a package wasn't delivered (when it actually was), sending a package to a different address that's not theirs, or even just simple theft of packages from doorsteps. Use Shopify's fraud-protection tools, and common sense when accepting orders, to minimize the amount of fraud and chargebacks that occur.
- Website hacks and malware: Hacks tend to occur when someone breaks into your login system, so the best course of action is to use a password manager which generates and stores strong passwords for your entire organization. It's essential to check on everyone's password, since one of your workers could cause an attack by using a weak password. In addition, activate security measures like two-factor authentication and hidden login pages.
- Transactional data theft: This occurs when a bot or person intercepts data passed between the merchant and the customer. Data theft could steal information about your business, but more than likely, it has something to do with acquiring lists of transactional information. For instance, hackers prey on larger businesses because there's a a greater prize: long lists of customers; if they get credit card information, they can try to use the credit cards elsewhere. Luckily, Shopify already has things like TLS and PCI-compliance to fight threats of data theft.
And here are some scams and attacks for consumers to look out for, since it's still possible for scammers to use Shopify as their website builder:
- Identity theft: These scams generally happen by sending you a link through text or email. After you click on it, you land on a website that looks relatively legitimate, but it's not. Sometimes the scammers try to duplicate a legit website so that you think you're safe. The goal is to get you to type in your payment information, which gets recorded and stolen.
- Insecure websites: Although Shopify activates things like TLS security, there's no guarantee that a merchant has accidentally, or intentionally, stripped some of the security measures from their website. As a consumer, always look for things like SSL or TLS certificates, an “https” before the domain, or a lock in the URL section of your browser.
- Dropshipping scams: Dropshipping on Shopify is legit—usually. Some more scammy merchants take advantage of this low-inventory process by listing products with no intention of ever fulfilling them. Many people also find some aspects of dropshipping scammy, like how some dropshippers fail to tell you about 30 day shipping periods, or how some will try their very hardest to prevent you from returning items. It all depends on the merchant, but keep an eye out for dropshipping scams.
- Physical theft: Consumers, regardless of where they live, are regularly at risk of losing packages that get swiped from their doorsteps. Shopify has nothing to do with this, so you must keep an eye on your packages by sending them to your office, installing a video doorbell, or making sure the delivery gets dropped in a secure location.
Conclusion: Shopify is Legit
Shopify has its pros and cons, but overall, you can rest easy knowing Shopify is legit, with high-quality products for building ecommerce sites. As with anyone building a website, you still have to think about fraud, hackers, and potential websites built for scams, but overall, Shopify offers several tools to minimize these threats, and you must go through certain procedures on your own end to ensure as little interaction with those problems.
What are your thoughts on Shopify? We know Shopify is legit, but share if you've had any qualms with the company in the past. Also share instances where Shopify has impressed you.