Daily ArchivesMarch 16, 2022

All businesses incur transaction fees when a customer’s credit card payment is processed, reducing the money earned per sale.

But transaction fees can hurt ecommerce businesses even more. Platforms like Shopify, Etsy, Wix, and Squarespace add transaction fees onto your sales, cutting into your hard-earned profits.

Navigating through the world of transaction fees is a messy endeavor, so this article breaks down Shopify transaction fees, along with other popular platforms like Squarespace, Wix, and more.

Keep reading to learn about:

• How ecommerce transaction fees work
• Ebay transaction fees
• Etsy transaction fees
• Shopify transaction fees
• Wix transaction fees
• Squarespace transaction fees
• Weebly transaction fees
• WordPress transaction

And see if there are better ecommerce platform options for your business.

How Ecommerce Transaction Fees Work

Two standard fees occur during a sale: processor fees and transaction fees.

A processor fee, also known as a processor payment or credit card processing payment, is the charge from the credit card processor, like PayPal, Stripe, or Intuit. It acts as an intermediary between your business and a customer’s credit card company.

A transaction fee is the amount of each sale transaction paid via credit card and can vary depending on the ecommerce platform, subscription plan, type of product, and more. Essentially, a transaction fee is like a commission set by the ecommerce platform your business utilizes.

Comparing Ecommerce Transaction Fees

eBay Transaction Fee

eBay’s transaction fees are known as “final value fees.” The final value fee covers the total amount of the sale, including the item cost, shipping and handling costs, sales tax, and any additional applicable fees. Businesses incur extra fees depending on the type of products the customer purchases.

Except for athletic shoes over $100, all products cost the seller an additional $0.30 per order. Final value fees range between 0.5% and 15% depending on the category and the total amount of the sale.

Most product categories charge 12.55% of the sale up to $7,500 calculated per item and an additional 2.35% for the sale portion greater than $7,500.

So if your business sells a high-priced product for $8,000, the fees on the item are $941.25 (12.55% of $7,500) plus $11.75 (2.35% of $500).

Each fee adds up.

Related reading: Ecommerce Platform vs. Marketplace: Moving to Your Own Site >>

Etsy Transaction Fee

Etsy’s transaction fees recently increased to a 6.5% transaction fee on the sale price, including shipping. However, if your business utilizes the Etsy Payments feature, that will be an additional processing fee of 3% of the sale price plus $0.25.

So, for example, a product that costs $10 that the customer pays via Etsy Payments will generate $1.05 in transaction fees, which is over 10% of the cost of the item sold.

Shopify Transaction Fee

Does Shopify charge a transaction fee? Yes, they do. Shopify transaction fees charge your business 0.5% to 2% for making a sale, and the plan subscription determines the percent.

The Shopify Payments feature, which incorporates Shopify’s own payment gateway, eliminates transaction fees.

However, if you do not utilize Shopify Payments, an additional transaction fee of 2.4% to 2.9% plus $0.30 is added per transaction.

Shopify Payments may sound ideal, but Shopify can hold your funds at its discretion. It is only available in 17 countries and businesses like cryptocurrency, Internet gaming, telehealth services, and cannabis-related businesses, amongst others, are ineligible from using the feature.

Related reading: Shopify: Is It The Best Option For Your Online Store? >>

Wix Transaction Fees

You may be wondering, Does Wix charge transaction fees?

While Wix charges the standard processing fees of 2.9% plus $0.30 of the sale for credit card payments, it does not currently charge any additional transaction fees.

Squarespace Transaction Fee

Squarespace charges both processor and transaction fees.

The Squarespace Website Business plan charges a 3% transaction fee on order totals (including shipping), while the Commerce Basic and Commerce Advanced plans do not charge transaction fees.

Related reading: Should I Switch From Squarespace to WordPress? 9 Considerations >>

Weebly Transaction Fees

Weebly charges a 3% transaction fee for its Free, Starter, and Pro plans, but no transaction fees are incurred for its Business plan.

WordPress Ecommerce Transaction Fees

You may not know that WordPress can be used for ecommerce. By using WordPress with WooCommerce, you can turn your site into a WordPress online store.

A major benefit here is that the open source ecommerce platform WordPress does not charge any transaction fees. Processing fees depend on the card processor.

Related reading: What is WooCommerce? How It Works and 10 Reasons to Choose WooCommerce >>

Other Considerations Beyond Ecommerce Transaction Fees

Transaction fees are not the only important factor to take into consideration when starting an ecommerce business.

Keep in mind that if you choose one of the proprietary solutions, such as Shopify, your data is no longer yours, and you cannot take it with you should you decide to run your store on a different platform. If you choose to move, rebuilding your entire shop will be necessary.

WordPress and WooCommerce provide the most customizations, templates, scalability, and flexibility out of the mentioned solutions, as well as a robust assortment of plugins and integrations to help you manage your website. Plus, your data is truly yours.

Ecommerce Transaction Fee FAQs

Does Shopify Charge a Transaction Fee?

Yes. Shopify transaction fees range from 2% on its Basic plan, 1% on Shopify plan, and 0.5% on its Advanced plan.

What is Shopify Payments Fee?

Shopify Payments is Shopify’s payment gateway. It eliminates Shopify transaction fees but still charges credit card processing fees ranging from 2.4% to 2.9% plus $0.30 per transaction.

Does Wix Charge Transaction Fees?

Yes. Wix uses the industry-standard processing fee of 2.9% of the sale amount plus $0.30.

Does WordPress Charge a Transaction Fee?

No. There are no transaction fees for using the WordPress platform.

Is There a Transaction Fee for WooCommerce?

No. There are no transaction fees for using the WooCommerce platform.

How to Avoid WordPress Ecommerce Transaction Fees

While WordPress avoids charging customers transaction fees, there are still credit card processing fees. Those are universal costs that all online businesses and sellers are required to pay, right?

Nope!

There are plenty of free payment methods that can be utilized with your WooCommerce shop, like WooCommerce Payments, Amazon Pay, and ShipStation Integration.

These plugins to your WooCommerce store allow customers to remain on your website. WooCommerce Payments is a payment solution that has no hidden setup costs or monthly fees.

Try Fully Managed WooCommerce Hosting from Hostdedi

Avoid Wix, Squarespace, and Shopify transaction fees and go with a fee-free solution: WooCommerce.

Your website’s best bet not to incur fees is with a WooCommerce online store on WordPress. Fortunately, neither WordPress nor WooCommerce charges transaction fees, so you won’t be losing money from each sale.

And if you do decide to open a WooCommerce online store, consider hosting with Hostdedi.

Fully managed WooCommerce hosting from Hostdedi comes with smart monitoring, which sends alerts for sales trends, customer checkout problems, and if your site experiences slow loading times. It also comes with cart abandonment technology and advanced analytics to help understand the habits of your website visitors and customers.

Don’t let other ecommerce providers take their cut from your hard-earned profits while providing a lackluster shopping experience for customers and rigid website creation for your business.

Instead, stick with WooCommerce, where your profits are your own and your creativity knows no bounds.

Explore WooCommerce hosting plans today.

Ecommerce. Ebusiness. Same thing, right? Not exactly. So what is the difference between ecommerce and ebusiness?

Ecommerce is selling goods or services online. Ebusiness is conducting business online. So all ecommerce is ebusiness, but not all ebusiness is ecommerce.

It’s like how all squares are rectangles, but not all rectangles are squares. Confused? Don’t worry. We’re not about to launch into a geometry lesson.

At their core, ecommerce and ebusiness deal with using the internet for your business. In this post, we’ll look at the ways ecommerce and ebusiness can transform your business for success.

What is Ecommerce?

So, what is ecommerce?

Ecommerce refers to selling goods and services on the internet. Ecommerce covers everything from Amazon and Walmart to your local bakery selling cupcakes online.

Types of ecommerce include:

• B2C. Business-to-Consumer ecommerce includes most traditional retail businesses. The business sells directly to consumers.
• B2B. Business-to-Business ecommerce is about transactions between two business entities. For example, a distributor selling car parts to an auto parts store is a B2B transaction.

One company may utilize B2C and B2B ecommerce channels. A shoe company may sell directly to consumers on their website and have a place for shoe stores to purchase inventory.

Ecommerce is not limited to physical products. You can also sell services like a graphic designer offering logo design packages. Or, you can sell digital products.

Ecommerce can include traditional commerce models as well. Buy online and pick up in-store still utilizes a brick-and-mortar location but is an example of ecommerce since the transaction occurred on the internet.

What is Ebusiness?

Ebusiness refers to conducting business online. Business interactions that were handled in person, over the phone, or with pen and paper now occur on the internet.

You may have heard the buzzword “digital transformation” used to describe this evolution in how businesses operate. Ecommerce is one part of this transformation. Ecommerce covers the sales portion of ebusiness, but other functions from accounting to customer service also can be part of ebusiness.

Types of ebusiness include:

• Cloud Computing. Thanks to the rise of cloud computing and SaaS providers, many companies’ essential functions like accounting, human resources, and IT rely on internet-based software.
• Customer Relationships and Service. From maintaining a support and documentation website to enabling live chat, many customer service functions that required a telephone call now happen online.
• Supply Chain and Logistics. From procurement to shipping, many aspects of companies’ supply chain management rely on ebusiness.

Transitioning to ebusiness doesn’t require buying expensive cloud-based software like Salesforce, Oracle, or Workday. The popularity of open source platforms like WordPress allows businesses of all sizes to use ebusiness.

For example, as an alternative to buying project management software, you could use one of these project management plugins for WordPress to build a client portal to keep track of projects and communication between your teams and clients.

What is the Difference Between Ecommerce and Ebusiness?

The main difference between ecommerce and ebusiness is that ecommerce is solely focused on sales transactions while ebusiness incorporates other business functions.

Ecommerce vs. Ebusiness

Ecommerce vs. Ebusiness	Ecommerce	Ebusiness
Ecommerce vs. Ebusiness Differences	Ecommerce refers to selling goods or services online.	Ebusiness refers to performing any type of business activity online.
Ecommerce vs. Ebusiness Similarities	Ecommerce is one example of ebusiness.	Ebusiness encompasses ecommerce.
Ecommerce vs. Ebusiness Activities	Activities include buying and selling.	Activities include procurement of goods or materials, customer relations, selling, and financial transactions.
Ecommerce vs. Ebusiness Channels	Typically involves a website or application. Some companies also have social media sales channels that count as ecommerce.	Ebusiness includes any online sales channels and internet-based software systems like CRM, ERP, HCM, and ITSM.

When to Use Ecommerce and Ebusiness

It doesn’t really matter what you call ecommerce and ebusiness. The important thing is you start incorporating both into your business plan.

The COVID-19 pandemic accelerated digital transformation trends that were already disrupting nearly every industry. Think of how quickly Zoom meetings replaced the need for business travel for in-person meetings.

Ecommerce continues to grow rapidly for both pure-digital and combination online and brick-and-mortar retailers. If businesses don’t take advantage of the internet for ecommerce and ebusiness, they’ll get left behind. Their competitors are transitioning to use the internet more for all their business activities. Failing to make the switch puts companies at a disadvantage.

How to Get Started with Ecommerce and Ebusiness

Adding ecommerce to your business is not as difficult as you think. With StoreBuilder by Hostdedi, you can set up a new ecommerce website in less than a day.

StoreBuilder harnesses the power of WooCommerce, the most popular open source ecommerce platform. You get all the benefits of using WooCommerce without the headache of setting it up. Just answer a few questions about your business, and StoreBuilder does the rest. You can customize your store to match your brand with the included premium theme options and easy-to-use customizer.

StoreBuilder also includes sales and performance monitoring. StoreBuilder monitors your store’s sales and uses its sales history to alert you to any downward trends. StoreBuilder also monitors your site for any performance issues. Hostdedi’s exclusive plugin monitor notices when a change in a plugin begins slowing down your site so you can correct it.

Take the next step in your digital transformation and sign up for a StoreBuilder account today.