If you started your online store on Shopify or Magento Open Source and you’re wondering whether you can get better value from making the switch... so were we, so we tried to figure it out.
For comparison, we looked at hypothetical online stores with between 100 – 2,500 transactions per month, and monthly sales between $10,000 and $50,000. If your business is much smaller, we’d recommend Shopify. If it’s much bigger, Adobe Commerce’s paid tiers are probably best value.
Magento Open Source is free, while Shopify costs around $50/month for a business doing a bit of volume.
Shopify looks even more expensive when transaction costs are considered – but that’s not the final word.
The short answer to whether Shopify or Magento is more cost effect is... “it depends.” First, here's a quick comparison of their main differences:
We modelled 10-12 factors that affect the running costs of a small to medium-sized online store. But the ones that impact the decision between Shopify and Magento Open Source the most were:
Why Transaction Fees are so Important
It’s almost impossible to tell a client how much they’ll pay in transaction fees until they get going. The big differentiator we found was whether the payment processor you choose charges a flat fee for each transaction as well as a percentage, or simply a percentage.
To make things more complicated, these charges usually taper as your volume grows, and all providers have different tiering.
The important thing is the difference in structure:
Size Matters
Based on transaction costs alone, your business should be doing over $5,000 in monthly sales AND have an average order value around $45-$55 before the switch to Magento makes sense.
As we said, this is a function of both average order size, transaction cost, and Shopify’s monthly fees. Here’s a simplified view of how it works out.
We’ve assumed at certain points that you’ll need Shopify’s $300 offering, but even if you scrape by on the cheaper package, it doesn’t help Shopify's case much.
When you factor in Shopify’s fees (and these go up as you scale and have more complex requirements), Magento works out cheaper at almost any scale provided you have the resources to set up and maintain it.
But that’s a big “if”
All else being equal, the true differentiator in TCO (Total Cost of Ownership) is going to be your infrastructure and headcount costs.
If you already have a web dev team and all the plumbing in place, these costs won’t increase substantially by moving to Magento. Shopify can be set up and maintained by one or two technical marketers. Magento requires a lot more tech muscle to deploy, run, and build onto.
If you only have a small Marketing team and few technical resources, moving from Magento to Shopify can make sense – if the added operational costs are lower than resourcing a Magento dev operation.
If you’re already on Magento and have the people to run it, a move to Shopify only makes sense if you’re looking to simplify operations at the expense of higher operational costs.
That decision comes down to how much you might save on tech resource headcount and infrastructure you can now outsource.
Conclusion:
If you’re looking to save money, Shopify probably isn’t right for a small to medium-sized business with some tech resources.
But if you’re looking to streamline operations or simply don’t have the resources to keep a Magento site running, the move to Shopify could make your life a lot easier, and help the bottom line by needing fewer bodies keeping the show on the road.
If you're already on Magento and decided to switch to Shopify, you might find our guide on How to Migrate from Magento to Shopify a helpful starting point
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