Understanding Why Shopify Takes a Percentage of Sales

Table of Contents

1. Introduction
2. The Two Types of "Cuts": Transaction vs. Processing Fees
3. Breaking Down the Percentages by Shopify Plan
4. Why the "Cut" Is Actually an Infrastructure Investment
5. Optimizing Your Margins: The Power of Digital Products
6. How Tevello Complements Your Shopify Fee Strategy
7. The Importance of Owning Your Customer Data
8. Real-World Scenario: Escaping the "Percentage Trap"
9. Comparing Shopify Payments to Third-Party Gateways
10. Strategies for Reducing Your Shopify "Toll"
11. The Value of a "Native" Solution
12. Setting Realistic Business Expectations
13. Conclusion
14. FAQ

Introduction

Did you know that the global e-learning market is projected to soar past $460 billion by 2026? As inventory costs for physical goods continue to climb and supply chain disruptions become the new normal, savvy merchants are increasingly looking toward digital products to protect their margins. However, as soon as that first sale notification pings, a common question arises: why does Shopify take a percentage of sales? It can feel like a silent partner is dipping into your profits, especially when you are already paying a monthly subscription fee.

The purpose of this blog post is to demystify the Shopify fee structure and explain exactly where that money goes. We will dive deep into the difference between payment processing fees and transaction fees, examine how different Shopify plans impact your take-home pay, and explore how diversifying into digital products can help you reclaim your profitability. Most importantly, we will highlight how our mission at Tevello is to provide a "Native Shopify Integration" that helps you build a digital learning powerhouse without adding extra financial friction.

By the end of this guide, you will understand that Shopify’s percentage is not a "tax" on your success, but an investment in a robust, secure infrastructure. You will also learn how to optimize your store’s setup to keep as much revenue as possible while scaling your brand through high-margin digital offerings.

The Two Types of "Cuts": Transaction vs. Processing Fees

To understand why Shopify takes a percentage of sales, we first have to distinguish between two very different types of fees. This is the area where most merchants experience the most confusion.

Payment Processing Fees

Every time a customer swipes a card or enters their credit card details online, a complex web of financial institutions springs into action. These include the customer’s bank (the issuing bank), your bank (the acquiring bank), and the card network (Visa, Mastercard, etc.). These entities charge for the risk they take and the technology they provide to ensure the money moves securely.

Shopify Payments, powered by Stripe’s secure infrastructure, simplifies this by offering a flat rate. When you see a fee like 2.9% + $0.30, the vast majority of that percentage goes to the banks and card networks, not to Shopify’s pocket. Shopify is essentially acting as a facilitator, providing you with a pre-negotiated rate so you don’t have to set up your own complex merchant account with a traditional bank.

Shopify Transaction Fees

This is a separate fee that only applies if you choose not to use Shopify Payments. If you decide to use a third-party gateway, Shopify charges an additional fee (ranging from 0.5% to 2% depending on your plan). Why? Because when you use an external provider, Shopify still provides the checkout infrastructure, the hosting, and the security, but they aren’t earning any of the processing revenue. This fee covers the maintenance of the integration with that third party.

At Tevello, we believe in transparency and simplicity. While Shopify manages these gateway fees, we have built a solution with predictable pricing without hidden transaction fees. Our goal is to ensure that as you scale your digital empire, your costs remain manageable.

Breaking Down the Percentages by Shopify Plan

Shopify uses a tiered model where the more you pay for your monthly subscription, the less they take from each individual sale. This "toll road" analogy is the best way to visualize it: you can pay a smaller monthly fee but a higher toll per trip, or a larger monthly fee for a discounted toll.

The Basic Plan

This plan is the entry point for most new businesses. It costs approximately $39 per month (or $29 if billed annually). On this tier, Shopify takes 2.9% + $0.30 for online sales. If you use a third-party payment provider, they will also take an additional 2% transaction fee.

For a store just starting out, this is often the most cost-effective choice. However, as your volume grows, that 2.9% starts to represent a significant chunk of change. If unifying your stack is a priority, start by a simple, all-in-one price for unlimited courses.

The Shopify (Grow) Plan

Priced at $105 per month (or $79 annually), this is the mid-tier option for scaling brands. The percentage Shopify takes drops to 2.6% + $0.30. The third-party transaction fee also drops to 1%.

The "break-even" point between the Basic and Shopify plans usually happens when your monthly sales volume hits a level where the 0.3% savings on every transaction covers the $66 difference in subscription costs. For many merchants, the added benefit of better reporting and more staff accounts makes this a natural step up.

The Advanced Plan

For high-volume merchants, the Advanced plan at $399 per month (or $299 annually) offers the lowest standard rates: 2.4% + $0.30 per sale. The third-party transaction fee is halved again to 0.5%.

When you reach this stage, you are likely processing tens of thousands of dollars in sales. At this volume, even a 0.2% difference in fees can result in thousands of dollars in savings over the course of a year. Merchants at this level often see how merchants are earning six figures by optimizing every decimal point of their operations.

Why the "Cut" Is Actually an Infrastructure Investment

It is tempting to think, "I could just host my own store on a cheaper platform and keep that percentage." But when you look under the hood, Shopify's cut is paying for several critical services that would be much more expensive to manage individually.

1. Security and PCI Compliance

Handling credit card data is a massive legal and technical responsibility. Shopify is Level 1 PCI DSS compliant, meaning they meet the highest standards of security. To achieve this on your own, you would need to invest heavily in specialized hosting and security audits. Shopify’s percentage covers the cost of keeping your customers' data safe and your business out of legal trouble.

2. Global Hosting and Uptime

Shopify provides lightning-fast hosting that can handle massive traffic spikes (like during a Black Friday sale) without crashing. They use a global Content Delivery Network (CDN) to ensure your store loads quickly for a customer in Tokyo just as fast as it does for a customer in New York. High load times are the number one killer of conversion rates; Shopify’s fee ensures your store stays "open" 24/7.

3. Continuous Feature Updates

E-commerce changes every week. New payment methods like Apple Pay, Google Pay, and "Buy Now, Pay Later" options are constantly being integrated. Shopify uses a portion of its revenue to fund the R&D required to keep their platform at the cutting edge, so you don't have to hire a developer every time a new technology emerges.

This is also why we chose to build our app as a native integration. We want you to enjoy all the key features for courses and communities while benefiting from the core stability Shopify provides.

Optimizing Your Margins: The Power of Digital Products

If you find that Shopify's percentage, combined with shipping, manufacturing, and marketing costs, is squeezing your margins too tight, it may be time to rethink what you are selling. This is where the Tevello philosophy comes into play.

Physical products have a "ceiling" on profitability because every unit sold carries a cost of goods sold (COGS). Digital products, such as courses, memberships, and downloadable guides, do not. Once you create a digital course, the cost to sell it to the 1,000th customer is virtually zero.

The Hybrid Model

We often see merchants "turn any Shopify store into a digital learning powerhouse" by adding a digital component to their existing physical business. Consider a merchant who sells high-end coffee beans.

The Challenge: Shipping heavy beans is expensive, and after Shopify's 2.9% cut and the cost of the beans, the margin might only be 20%. The Solution: The merchant creates a "Barista Basics" video course using Tevello. This course is sold as a high-margin upsell at checkout. The Result: Because there is no shipping or manufacturing cost for the course, even after Shopify's processing fee, the profit margin on that digital add-on is nearly 97%.

By integrating digital products, you aren't just selling a product; you are increasing the Customer Lifetime Value (LTV) without increasing your inventory risk. You can see how merchants are earning six figures by using this exact strategy to supplement their physical sales.

How Tevello Complements Your Shopify Fee Strategy

When you use Tevello to sell your digital products, we want to be part of the solution to your margin problems, not another fee to worry about. This is why we are transparent about our value proposition.

0% Transaction Fees

While Shopify takes a percentage for processing the payment (which, as we discussed, is mostly going to the banks), Tevello charges 0% transaction fees. We don't believe in "success fees." Whether you sell 10 courses or 10,000, we don't take a cut of your hard-earned revenue. You pay our flat monthly fee, and the rest is yours.

Keeping Customers on Your URL

One of the biggest hidden "costs" of other platforms is the loss of brand equity. Many third-party course platforms redirect your customers to their own website (e.g., yourbrand.thirdpartyplatform.com). This breaks the trust of the customer and makes it harder for you to retarget them later.

Our approach focuses on keeping customers at home on the brand website. This ensures that the customer remains in your ecosystem, increasing the likelihood of repeat purchases and long-term loyalty. When you see how the app natively integrates with Shopify, you'll realize that the customer never feels like they are leaving your store.

Scalability with a Flat-Rate Plan

As your community grows, some apps will charge you per student or per member. We think that penalizes you for being successful. Our Unlimited Plan is $29.99 per month and includes a flat-rate plan that supports unlimited members. This allows you to scale your community from 100 members to 100,000 without your software bill exploding.

The Importance of Owning Your Customer Data

When Shopify takes its percentage, it is also providing you with one of the most valuable assets in business: data. Unlike selling on Amazon or Etsy, where the platform "owns" the customer and limits how you can contact them, Shopify allows you to own your customer list.

This is a core value at Tevello. We believe merchants should own their customer data and brand experience. When you sell a course or a membership through our platform, that data lives inside your Shopify admin. You can see which customers bought which physical products and which digital courses. This unified view allows for powerful marketing automation.

Imagine knowing exactly which customers bought a specific physical tool and sending them a targeted email for a course on how to use it. This kind of synergy is what drives 50% of sales from repeat course purchasers in some of our most successful stores. You can learn more by generating revenue from both physical and digital goods.

Real-World Scenario: Escaping the "Percentage Trap"

Let’s look at a practical scenario to illustrate how to navigate these fees. Imagine a merchant named Sarah who sells handmade crochet kits.

Initially, Sarah is on the Basic Shopify Plan.

• Physical Kit Price: $50
• Shopify Cut (2.9% + $0.30): $1.75
• Materials & Shipping: $25.00
• Marketing Cost per Sale: $10.00
• Sarah’s Net Profit: $13.25

Sarah decides to add a digital "Mastering the Magic Loop" course using Tevello.

• Course Price: $25
• Shopify Cut (2.9% + $0.30): $1.03
• Materials & Shipping: $0
• Marketing Cost (Bundle with kit): $0
• Sarah’s Net Profit: $23.97

By adding the digital course, Sarah has nearly tripled her profit on that customer interaction, even though Shopify still took a percentage. The "cut" becomes negligible when the cost of goods is removed from the equation. This is exactly how one brand sold $112K+ by bundling courses and changed their entire business trajectory.

Comparing Shopify Payments to Third-Party Gateways

If you are still asking "why does Shopify take a percentage of sales," you should specifically look at what happens when you don't use their preferred gateway.

Many merchants are tempted to use PayPal exclusively because of its brand recognition. However, if you are on the Basic plan and use PayPal, you are paying PayPal's fee (which can be as high as 3.49% + $0.49) plus Shopify's 2% transaction fee. Suddenly, you are losing over 5.5% of your sale before you even count your other expenses.

This is why we strongly recommend using Shopify Payments whenever possible. It removes the extra "transaction fee," leaving you with only the standard processing rate. This creates a much more predictable pricing without hidden transaction fees for your business.

Strategies for Reducing Your Shopify "Toll"

While you can't eliminate credit card fees entirely (as the banks will always want their cut), you can certainly optimize them.

1. The Annual Plan Discount

If you are committed to your business for the long haul, switching to annual billing for your Shopify plan can save you 25% on your subscription costs. While this doesn't change the transaction percentage, it lowers your fixed overhead, making the "cut" easier to swallow.

2. Time Your Upgrades

Don't wait until you are "rich" to upgrade your plan. Do the math. If you are on the Basic plan and doing $20,000 a month in sales, you are paying $580 in processing fees (at 2.9%). If you upgrade to the Shopify plan (at 2.6%), you would pay $520. That $60 saving almost entirely covers the cost of the plan upgrade, meaning you get all the extra features for free.

3. Incentivize Localized Payments

If you sell internationally, Shopify takes an extra percentage for currency conversion and international cards. Using Shopify Markets to offer localized pricing can sometimes help optimize these flows.

Regardless of your Shopify plan, you can always install Tevello from the Shopify App Store today to start building your high-margin digital catalog.

The Value of a "Native" Solution

One reason Shopify takes a percentage of sales is to ensure that the "Checkout" experience is world-class. Shopify's "Shop Pay" is one of the fastest converting checkouts on the internet.

When you use a non-native course platform, you often lose access to Shop Pay for your digital products. You are forcing your customers to fill out their credit card info all over again on a different site. This leads to cart abandonment.

Tevello is built as a Native Shopify Integration. This means when a customer buys your course, they use the exact same Shopify checkout they already trust. They can use Shop Pay, their saved addresses, and their preferred payment methods. By staying within the Shopify ecosystem, you are leveraging the infrastructure you are already paying for to maximize your conversion rates. This is a primary reason why how brands converted 15% of challenge participants into long-term customers.

Setting Realistic Business Expectations

We want to be clear: simply installing an app and launching a course won't make you a millionaire overnight. Shopify’s fees and Tevello’s tools are just that—tools. Success requires high-quality content, a clear understanding of your audience, and consistent marketing efforts.

However, the benefit of the Shopify + Tevello business model is the stability it provides. By diversifying your revenue streams between physical products and recurring memberships or one-time digital courses, you increase your Brand Loyalty and stability. You aren't just a shop; you are a destination for learning and community.

Our Unlimited plan includes everything you need to get started:

• Unlimited courses and students.
• Unlimited video hosting and bandwidth.
• Community features (profiles, member directories, social feeds).
• Drip content scheduling and quizzes.

All of this is available with a 14-day free trial, allowing you to build your entire curriculum before you even have to pay your first month's subscription.

Conclusion

Understanding why Shopify takes a percentage of sales is a vital step in moving from a hobbyist to a professional merchant. That percentage represents the cost of a world-class engine: security, hosting, payment flexibility, and global reach. Rather than viewing it as a lost profit, view it as the utility cost of doing business on the world's most powerful e-commerce platform.

The real key to long-term success on Shopify is not trying to avoid fees, but rather optimizing your product mix to ensure your margins can support them. By adding digital products and communities through Tevello, you can offset the costs of physical retail with high-profit, zero-inventory offerings. We are committed to an all-in-one ecosystem where physical products and digital learning live side-by-side, helping you turn your store into a powerhouse.

Start your journey today and take advantage of our simple, flat-rate model. Remember, while Shopify manages the payment processing, Tevello charges 0% transaction fees, meaning you keep 100% of the digital revenue you earn above the standard processing costs.

To build your community without leaving Shopify, start by reviewing the Shopify App Store listing merchants install from.

FAQ

1. Can I sell courses on the Shopify Basic plan?

Yes, you can absolutely sell courses on the Basic plan. While Shopify's transaction percentage is higher on this tier (2.9%), the lower monthly subscription fee makes it a great place to start. When you use Tevello, you can host unlimited courses and students on this plan, making it a very affordable way to launch your digital academy.

2. Does Tevello charge me more if I have more students?

No. Unlike many other platforms that increase their price as your community grows, Tevello offers an Unlimited Plan for $29.99 per month. This includes unlimited students, courses, and video hosting. We believe you should be rewarded for your growth, not penalized with higher fees.

3. Will my customers have a separate login for my courses?

No. Because Tevello is a native Shopify integration, it uses a unified login system. This means your customers use the same account for buying physical products and accessing their digital courses. This significantly reduces customer support friction and provides a seamless brand experience on your own URL.

4. Can I offer a free course to my existing customers?

Yes! Offering a free course is a fantastic way to build brand loyalty and increase the value of your physical products. With Tevello, you can easily enroll existing customers into a course or offer it as a free bonus when they purchase a specific physical item from your store.