Episode 15: Breaking Down the Bigcommerce Price IncreaseFebruary 4, 2016 in BigCommerce, Ecom-Crew-Podcast, Ecommerce, Shopify
Well Bigcommerce has announced they will be raising their prices. Today we will discuss what this price increase means for our personal businesses and the platform in general. It’s really easy to create a mob mentality against Bigcommerce during all this, but hopefully today we give you a broader picture of this change. We have differing views on Bigcommerce’s decision, but that might help you decide what is best for your own business.
Since Bigcommerce has announced this price increase there has been a lot of talk of migrating to Shopify. Both are strong platforms, but today’s episode is a balanced and intelligent conversation about the two.
Here are some of the points of our conversation:
- Bigcommerce’s reasoning for the price increase
- Services and features affected by the price increase
- Bigcommerce vs. Shopify
- The benefits of both platforms
Mentioned in Today’s Episode:
If you have any questions or anything you’d like us to discuss on the podcast please go to ecomcrew.com and fill out the contact form. Also we would really appreciate if you would leave us a review on iTunes. Thanks for listening!
Full Audio Transcript
Mike: Hey, everyone. This is Mike.
Grant: And this is Grant.
Mike: And welcome to this week’s edition of the EcomCrew podcast. This week, we’re going to be talking about Shopify and Bigcommerce and some of the price increases that have been going on over there. Grant and I actually both have a Shopify and a Bigcommerce store. I’m running IceWraps.com on Bigcommerce and I have ColorIt.com on Shopify and conversely, Grant has CuttingBoard.com on Bigcommerce and ChoppingBlocks on Shopify. So we both have experience running those stores and the main thing we want to talk about this week, the thing that kind of prompted this episode is that Bigcommerce’s prices are going to be going up. We’re members over at the eCommerceFuel forums and they’ve been talking about it quite a bit over there and we wanted to kind of talk about this because it’s pretty important. As a store owner, your shopping platform is the most important thing I would say, unless you’re selling on Amazon. Then maybe it’s the second most important thing. But obviously shopping cart’s really, really important.
So we’re going to kind of get into Bigcommerce here first and talk about their price increases that are coming up, I guess imminently. I haven’t gotten an email yet because I am on an annual plan, so I expect that email coming down the pipe sometime this summer, but Grant has gotten that email and has been talking to Bigcommerce and Bigcommerce finally has published on their website their price changes. So we’re going to talk about that first and, Grant, I’m going to kind of hand it off to you since you did get that email and have been talking to Bigcommerce, and then I’ll kind of give you some follow up on that.
Grant: Okay. Sounds good, Mike. So Bigcommerce has been telegraphing this move for quite some time and we are on the Partners program, which means that we have a little bit of an insight before the public kind of reaches out. And in my opinion, Bigcommerce has known that this pricing increase is going to be a very challenging PR piece to say the least. And it’s never going to be easy when you’ve got a bunch of customers and you raise the pricing on them. That said, the pricing has come out and I think it’s pretty shocking to a lot of people. Using CuttingBoard as my own example, I am going from one of the standard plans – it’s the Plus plan at $79.95 and my rate is going up to essentially $199 or $200 a month. Now, that’s over a 100% increase.
Now the first reaction is – I promised Mike not to swear, but WTF? And how can you possibly justify a 100% increase? And I think this is going to be the big thing that’s going to be hitting a lot of people. And Bigcommerce has essentially come out and said that due to the fact that they’ve got a lot of development needs that they need to be hitting, they’ve got a lot of stores that are taking more competing resources that they need to up their pricing. Now, for higher volume merchants it’s not just – I think what is happening is not just the fact that they’re upset about the pricing, but one of the big things that’s going on is that there doesn’t seem to be a huge leap in services to go along with the pricing. And Mike and I were kind of talking about that in terms of how can you increase your pricing without having some kind of value add to go with it? So the big trick for Bigcommerce is going to be to try to convince people that this is actually going to be for the good of the platform. And I’ve got some opinions on that but I’m going to kind of toss it back to Mike for the time being.
Mike: Yeah. I mean in my way of putting it, I mean it’s the same thing that Grant kind of was, but typically as a company, you start providing better service and then expect to get more money for it. I mean I can give you a lot of examples. I mean StitchLabs I think is probably a good example. They keep on raising their price, but they keep on adding more features and functionality to it. I mean there’s still several things with them that drive me mad, mostly performance, but they’re making improvements month over month, adding new features and functionality, versus Bigcommerce in my opinion, really hasn’t done squat as far as new functionality at least over the last year and at least anything that’s important to us. And there’s been some stuff that’s just been real heartburn for me as a Bigcommerce merchant. The biggest is really the Yotpo integration. And Yotpo isn’t necessarily the be all/end all of review platforms but it is what we use and Bigcommerce does not allow in-line SEO or rich snippets with Yotpo and we haven’t been able to get the rich snippets to work properly, which, for us, for a site that – you know, when you have a site where you’re selling third party products, having rich snippets is even more important, I think, than when you’re selling your own stuff because search becomes such an important part for you when you’re trying to do organic searches for ABC ice wrap or whatever and people come to you through Google. I mean having those rich snippets there is incredibly important versus some – if you have your own brand, I mean it’s definitely still important but not quite as important.
So with IceWraps, it’s driving me crazy because I know as an SEO guys that we can be improving our click-through rate and getting more sales by having those rich snippets and search results. And then on top of it, the in-line SEO is another important factor. I mean IceWraps.com has thousands upon thousands of reviews and those would be great user-generated content on the product page and Bigcommerce doesn’t allow that and it’s something Shopify does do and so even that one thing alone has been kind of making me think about switching to Shopify. There are some other things that have been kind of coming down the pipe that have been bothering me as well, but the fact that Bigcommerce doesn’t play will with third party vendors, it frustrates the crap out of me.
When you look at Shopify’s app store and you see how many applications are in there – and it’s really opened my eyes now that we have a Shopify store with ColorIt. I mean there are just so many more options out there and you look at like the Klayvio integration, for instance. We’re using Klayvio with both Bigcommerce and IceWraps. I mean the Klayvio integration with Shopify is so much more tight because their API is just better and gives more information and they open it up to more stuff. There’s been several other applications – I can’t think of them off the top of my head – that are available for Shopify and not Bigcommerce and I’ve talked to the app developer and they’re like, “Yup, we’ve been trying to get Shopify to approve us for months, if not over a year and still can’t get approved.”
So yeah, I mean the fact that they’re raising their price and not raising their service is driving me crazy. And they have these town hall meetings they call them and I’ve watched a couple of them and they are touting all these new features, the biggest of which I think is their new checkout, but it isn’t here yet. And then to me, it’s like why not release those features and make yourself a better product than the other guy and then talk about raising your price? So I’m going to end rant and pass it back over to Grant.
Grant: Yeah. So before we turn it into like a lynch mob scenario against Bigcommerce, some of the things they do have coming down their pipeline, like Mike said, was one-step checkout. Now that said, Mike actually brought that up to be sometime – what was it? October? Or September? Last year.
Mike: I think it was actually like a month or two before that, but yeah, around that time of the year. Let’s say late summer, early fall.
Grant: Okay now, before we turn this into a lynch mob against Bigcommerce, I want to talk about some things that they do have coming up. And Mike mentioned that they talked about one-page checkout and that’s going to be a pretty big feature, and Mike wrote about that on EcomCrew and talked about the conversion and the uplift and it’s a pretty important feature. That said we were expecting this last year and Mike was actually on the beta team or was supposed to be on the beta test team for getting that on IceWraps, but it’s been over six months and no information. And that’s kind of the big problem with Bigcommerce, which is the lack of communication, the lack of transparency, and they always talk about that they really do want to be a bit more transparent, but that’s not really the situation.
On the other hand, as a developer, I definitely know the risks that you get into when you try to promise a feature before it’s ready for primetime because the last thing that you want to do, especially if you’ve got and entirely hosted solution like Bigcommerce to unroll a new feature and then have it fail. With the new plan right now, for example, another big feature that they have – and this is something I really do want to talk about – is that they have their negotiated credit card rates on the Pro plan. And like I said, my Pro plan is $199 a month, but you get 2.2% credit card transaction, plus 30¢ fees. Now, we had talked on EcomCrew before about using your own merchant provider and getting negotiated rates and interchange and whatnot, and I have to say that 2.2% is a very competitive rate.
When you look at Shopify and you look at their tip tier plan, which is going to be the Unlimited plan, they have $179 per month and their rate for online is 2.4%, plus 30¢. Their in-person rate is 2.2%. Now, those are competitive rates as well, but 2.2% for online is a very, very good rate. And with interchange that we’re getting, I mean depending on the type of clientele you have and if a lot of your customers are using debit cards or credit cards or rewards cards, and these days, a lot of people are going towards rewards cards, especially if you have a larger transaction type store, 2.2% is probably better than even your interchange or interchange plus rate. And for me, it’s something that I look at ChoppingBlocks and I just assume that everybody there – because I do large ticket items – is using some kind of rewards card.
So 2.2% is very good and versus what they had before, which is if you’re using Stripe, you’re getting 2.9%. But the reality is that if you’re doing $100,000 in sales a year and you’re saving 0.7% on your transaction, that’s $700 in your pocket. Now, if your rate goes up by 120 per month at the end of the year, you’re going to be paying, you know $1,400 extra dollars at the savings of $700. So that doesn’t really make any sense. But if you’re doing $200,000 and you are saving $1,400 in transaction fees and then you have $1,400 in additional costs, then it’s a wash. So that said there’s obviously going to be a lot of transactions that are not being “powered by Braintree,” which is actually owned by PayPal. If you have a PayPal transaction, I think the greatest irony is that PayPal’s going to take their 2.9% cut so you’re actually doing far worse if you accept PayPal, even though Braintree is owned by PayPal. So take that on for size.
Now, for my store, I’m doing over $200,000 on CuttingBoard trailing 12 months. So to me, it’s really not quite a wash because my rates – I just signed up for another processor that got my rates down and it’s a flat fee service where I pay to have, essentially, interchange. So this is actually almost a kick in the nuts for me because I pay for an annual plan to get my rates down to interchange and Bigcommerce is essentially giving me interchange for free. So it looks like this plan starts in July so I’ve got four months of plan that I’ve paid for so I’m going to see if I can get that prorated. We’ll see if they work with me. But if you haven’t done any of our recommendations and you didn’t sign up for a merchant processor that was going to give you a better rate, the reality is that if you’re doing over $200,000 in sales, this is not such a bad thing. It’s really a wash.
And so that said, are you getting a lot of better services? Well, let’s take a look. What are we getting for the extra jump to the Pro plan? So you get Sift Science advanced fraud monitoring. What does that mean? Sift Science is a fraud monitoring third party algorithm or app that essentially takes a look at a bunch of different factors in your sales and it looks at things like velocity the IP. It actually matches up a lot of even like social signals of the person buying from their email, from their phone number, and looks up a bunch of stuff. I used Sift Science for a little bit. We used it on one of our other websites, WPHUB, and I can vouch for Sift Science being good stuff. And I got recently hit with a $3,000 chargeback which was no fun whatsoever and that one probably could have been detected by some fraud monitoring that I didn’t have at the time and it was actually due to that reason. I started incorporating more fraud monitoring into my different apps. That said, Sift Science I believe used to be Enterprise only, so now they’re dropping it to the Pro. So it is a little bit of a good thing.
For the price that you would pay normally for that kind of stuff, I had a quote from a sales guy for ChoppingBlocks for fraud monitoring software and they essentially wanted 1% or, if you manually wanted to insure an order, they would charge 4% to 5%. And what I mean by that is let’s say you’ve got an order going to, let’s just say a place that you’re not really sure Mr. Sketchy and you’ve got a $1,000 order going out to him and you really want to make that sale but you just don’t k now because the billing address and the shipping address are different and some things are kind of raising a red flag, you can use the software to insure that order and they’ll charge you a 5% premium. That said, they run it through their own back end and see if they even agree to insure it or not. So they’re kind of on a win/win or lose/lose with you.
So Sift Science is kind of worth 1%. Now, if you’re in a really sketchy business, that might be a great thing. If you’re in a business that just doesn’t really have a lot of chargebacks – and for me, unfortunately, that huge chargeback was actually my first so I just never assumed anybody would ever chargeback on cutting boards. So little did I know. So it could be worth your money, it could be not. If you don’t really care about it, then you’re kind of saying, “Well, I don’t care.”
They’re adding a Square point of sale integration. If you don’t have a retail store – and I’m guessing most all of you guys don’t, then you probably don’t care. They have the Google Trusted stores. That used to be on a higher plan I believe but you’re either on it or you’re not. The eBay listing tool, let’s face it: the eBay listing tool on Bigcommerce is a complete joke. If you’re using it, don’t. It sucks. Abandoned cart saver, that was on the normal plan before so that’s not really a great thing. Customer groups, unless you’re really doing B2B, nobody really even cares about that. Of course, there’s a lot of people doing B2B so it could be worth it but it wasn’t anything special.
Bigcommerce analytics reports. I personally have disabled Bigcommerce analytics on my own website and it took a lot of work to disable those. They kind of stealthily put that in there, and I know I helped Mike to try to disable that too. One of the biggest reasons is simply that Bigcommerce can data mine me if they wanted to at the end of the day, but I really am not interested in having somebody free access to my sales information. It’s just free money that I’ve giving away to somebody because they want it. So that’s not really a feature in my opinion. Dedicated SSL certificate. That’s actually worth a little bit of money. That might be $50 to $100 for a year of SSL for what it’s worth. The real-time shipping quote, that’s always been a feature. And their 24/7 support which I’m not even going to get into that. So with that, I’m just going to pass it back to Mike.
Mike: Yeah, so I think now would probably be a good time to talk specifically about what this means to each of us. We’re both in a little bit different situation as far as volume. And this is one of the things that kind of annoys me with this type of thing. I mean, first off these plans start at dollar volume, so like the Standard’s up to $50,000 in online sales and then the Plus plan’s $125,00 in online sales, and then they go to an order volume method instead. And for us, we trip the wire for both, on Plus, the $125,000 and we’re also above 3,000 orders a year. And I don’t know if this if clear to you, Grant, or not, but like what it says under Pro here is up to 3,000 orders per year and it kind of makes it sound like if you do more than 3,000 orders, you’re going to be forced to go to Enterprise. Is that what you kind of read into that as well?
Grant: So I’m up to 2,000 orders and I’m right on the cusp of that and it says for every 1,000 orders over it, it’s another $80 a month. And I believe that the sales cap – I mean they have an annual sales cap of $1 million. So if you ever go over $1 million, then you’re automatically I think boosted into the Enterprise plan. I do believe if you do something like 5,000 – and this is where the transparency comes into play. Everybody’s looking at a different dashboard and nobody sees the actual breakdown unless you’re a partner and you specifically ask for it. But I believe I’m thinking 5,000 order and they bump you to Enterprise or something like that because at some point – you know, if it’s $80 a month for every 1,000 orders and you’re paying like a $250 premium just on the order volume in addition to your Pro plan, I mean you’re close to $500 a month, which is getting toward the Enterprise grade anyways for your negotiated rates.
Mike: Yup. And the thing that is frustrating to me is that they don’t tell you what the Enterprise level is. I mean that’s one of the things that drives me crazy about it. I actually have like a personal vendetta against companies that don’t publish their rates for SAS type products. They basically call us and they just basically tell you whatever number they pull out their rear end that day and if you’re dumb enough to pay it, you pay it and if you want to negotiate and go through a lot of hoops to get the price down, you can. And I just prefer the transparency thing. It’s like tell me what the things costs and I’ll just say whether or not I want to pay that or not, and if you want to offer an annual discount or something, then that’s fine too. But there’s really no clear data that I’m aware of, or price sheet, on what they want to charge you for Enterprise.
And for me, we’re in this like in-between spot between Pro and Enterprise. I mean I was just looking here. Based on our order volume on IceWraps, we do just over 5,000 orders annually. So we’d be at $360 a month, going up from – we’re paying $179 right now. We’re on an old annual plan that basically is a quasi-Pro and Enterprise mix. Some of the features we get were in Enterprise but now they’re going to be in Pro. It’s kind of interesting how they’ve done this here because I think before, in order to get Google Trusted stores, they made that Enterprise for a while and then they put it back in Pro again. I think that particular feature’s been bouncing back and forth and that’s one that we needed because we use Google Shopping and Google Trusted stores is incredibly important for Google Shopping, just to have that badge in Google Shopping. Plus, it’s on our site that we’re a Google trusted store, which I know has increase our conversion rate.
So yeah, I mean basically, what we’re looking at for us is we’re going to go from $179 to – and this is a guess – we think to $360 based on what we’re seeing here, and again, for no additional functionality. We aren’t using their credit card processing. I guess we could switch to it but we already have HTTPS as a feature because we’re on the Enterprise plan right now but it looks like that’s going to be something else that’s going to jump down the Pro plan. So for me, they’re effectively doubling our rates and I’m already irritated with Bigcommerce and it’s probably going to be the straw that broke the camel’s back for me and pushes me to Shopify. So I’m still waiting for them to talk to me about this because they haven’t actually reached out to me yet and I do believe that’s because we’re on that annual plan and they’re waiting for people to come off their annual plans before reaching out to them.
So, Grant, can you, maybe just for the audience, just specifically talk about what this does for you and your pricing, what plan you’re on right now with CuttingBoard, and specifically what you think you’ll be paying? You kind of went into it a little bit here just a second ago but just kind of talk about it specifically for a second.
Grant: Yeah, so I’m just shy of 2,000 orders for the 12 months trailing and I mean my growth has been just going up and up and up. So I know I’m going to be hitting that 3,000 mark in terms of actual orders and so yeah I’m going to most likely be going from $200 a month to $280 a month if I had to guess. And then on ChoppingBlocks which is just on a Basic Shopify plan, which is kind of the comedy factor, but I mean that one’s just stuck at $29 plus app fees and whatnot. So yup, that’s where I’m going to be on this.
Mike: Gotcha. So talking about Shopify here real quick, I’m going to just talk real quick about what we’re paying and one thing I want to do real quick before getting into that is encourage everyone – if you aren’t familiar with Google Trends, the website Google Trends I’d head over there. We’ll put a link to this in the show notes, but just go over to Google Trends and then type into the box “Shopify, Bigcommerce.” And basically what it’ll do is Google has a way of showing you a trend of what has been the search volume for Bigcommerce and for Shopify if that’s the search you do. You can put anything in there that you want, but I would encourage you to go over and take a look at what the trends are for Bigcommerce and Shopify.
And Shopify is about 9.5 to 10 times larger than Bigcommerce. Now, I don’t know that that necessarily translates into 10 times more customers. I’m actually fairly sure that it does. I actually think it’s even larger than that but what that result is is that there’s just more of an ecosystem on that Shopify platform. If 10 times more people are searching for it and they have 10 times more customers, that means there’s 10 times more money to be made there for app developers. And for me the analogy that’s been thrown out there over and over again for the last couple of years is basically the VHS versus Betamax conversation. And to me, Shopify has one the VHS versus Betamax war, but the thing that’s funny here about that is that Betamax is actually a better technology, it just wasn’t the one that won. In this case, I think Shopify is a better technology and they also are eating Bigcommerce’s lunch. And Bigcommerce is doing everything they can to scramble and prove things, like Grant mentioned earlier and I mentioned earlier, these town halls that they’ve been doing.
And the checkout to me is the number one discrepancy between Bigcommerce and Shopify. We talk lots about this. It’s probably the thing that we’re most known for is this case study that we did for Bigcommerce’s checkout and they did reach out to me and were supposedly going to make me a part of their beta program that was supposed to launch in October and I’ve never heard from them. But their checkout is a disaster and what they’re going to, the new checkout that I’ve seen, actually looks like it’s going to be better than Shopify, so maybe for a while they’ll have something better, but in the end, I still think that, for me, I’m going to be moving everything to Shopify just because they are the 800-pound gorilla. The ecosystem’s the best over there and as a user of both – you know, I’ve been using both now for a few months – I just prefer the Shopify interface.
So at any rate, enough about that. Let me talk real quick about the pricing of Shopify, which is substantially cheaper right now and if we were to move IceWraps over to Shopify, we’d actually be paying significantly less than we are now, so that’s obviously another bonus. Now I’m sure that Shopify is keeping an eye out with what Bigcommerce is doing since they are their number one competitor, so I wouldn’t be surprised is Shopify has price increases that they’re going to do. But for right now like Grant mentioned, he’s on the Basic plan of $29 a month. For ColorIt, we just upgraded to the Pro plan, which is an extra $50 a month. The 0.3% credit card fee difference almost makes up for it for us. It actually is a $30 a month difference based on our volume right now. But the main reason we upgraded was to get gift cards. We’re going to be doing some stuff where we’re going to hand out gift cards to customers and we wanted that functionality. The abandoned cart recovery is useless to us because we’re using Klayvio already and we already have our own abandoned cart sequence, so that wasn’t anything special. And the professional reports we have our own reporting. The reports in Shopify haven’t really been that useful. So the main thing that we upgraded for was to get gift cards.
I can’t imagine why we would ever want to upgrade to their $179 Unlimited plan. The extra functionality there is the advanced report builder and real-time carrier shipping. It might be more useful for Grant someone that’s shipping a wide variety of weights and a complex shipping metric, but for us it’s pretty simple. We have books and they all weigh about the same and we can build fairly reliable shipping metrics ourselves – and we’ve already done this – that doesn’t need to do real-time carrier shipping. So for us, we’re basically looking at $79 a month for Shopify. Now, their Plus plan, which is ambiguous just like Bigcommerce’s, they don’t really tell you all the different things that Shopify Plus does, but from what I understand, first off, you get no transaction fees so you can go to your own credit card processing company if you want and not have to pay any transaction fees. You get extra functionality on the checkout page. The one thing that I don’t like about Shopify is that your checkout page is off your own URL. You end up at ColorIt.Shopify.com or something along those lines.
And I really hate that but the thing is like their checkout is so good and refined that we haven’t seen a drop in conversion rates because of it. I mean we don’t have an apples to apples comparison because we haven’t moved IceWraps over to Shopify to see if we do experience a conversion rate drop, but just from my own experience of using the Shopify checkout, I mean it just works and it works well. It never has errors. You know, all the things that we were having problems with at Bigcommerce are just basically eliminated with Shopify. So, to me, while it’s a negative, it’s also a positive that I think is a wash. But going to Shopify Plus would be a major benefit for us in getting our checkout on the same URL so it would be ColorIt.com/checkout.
And the other thing you get on Shopify Plus is a more robust API, more API access. The only thing that we’ve come across so far that I know that would be useful for us is in Shopify Plus, you get access to the gift card API. And right now, we want to be able to dynamically generate gift cards to customers based on getting an email or some type of promotion that we’re doing and that’s not possible at all on any of the non-Shopify Plus plans. So we have to manually create gift cards which is a pain in the butt and there’s no way around it without going to Plus.
So now, Shopify Plus, again, from what I understand – I haven’t talked to them about this yet but their pricing is a little bit more out there more than with Bigcommerce where it seems to be like they’re charge you whatever they feel like. So Shopify Plus, from what I understand, the going rate was $1,000 a month and they raised that to $1,200 a month some time last year. And as of February 1st or somewhere around there, it’s going to $1,500 a month. So it’s pretty pricy. I mean for us to switch to Shopify Plus, I mean I think the reality is is that you need to be a multi-million dollar store. I don’t even know that if you’re doing a million dollars in business, it would be worth it. I think you need to be doing two or three million dollars a month and I think it’s a real shame that these companies don’t have plans that are kind of in between.
You know, I think that I look at Shopify Plus and I’d be happy to pay $300, $400, $500 a month. I wouldn’t say happy to pay, but I’d be willing to pay something above the Unlimited plan to get some more functionality and the biggest thing for me would be the checkout and maybe some of these API calls, but I’m not quite at the volume that Shopify Plus is at. I mean they’re advertising that they can do 500,000 transactions a minute. You know, that’s like Amazon level. I mean it’s crazy. You know, we’re never going to be at that level so I mean we’re getting way more than we need and for $1,500, I mean it’s a shame that there isn’t anything in between those levels. So that’s kind of the Shopify pricing levels and at the expense of rambling on any longer, I’ll pass it on over to Grant. I apologize for taking so long there.
Grant: Yeah. You know, I kind of want to step back a little bit and, again, trying to put a little bit more perspective here, especially from the opposite side because we spent the better part of this last half hour kind of bashing a little bit on both of them. And I want to say that from an economics point of view and a business model point of view, is Shopify making any money in the Light plan where they charge $9 a month? And is Bigcommerce making any money on a Standard plan where they charge $29.95 a month? The answer’s really no. And I should really compare – the Shopify Light plan’s not even a real plan. It’s the Basic plan. So both of their small plans are really $29 a month.
And the reality is that when you first start up an ecommerce business, you’re going to go in and you’re going to like get lost. That’s a given. And you’re going to bumble your way through, emailing support probably five to ten times trying to figure out what’s going on and there’s a reason they have to pay their support people such a low fee, which is that, for the first year, there’s going to be a lot of guys that just come in and waste a bunch of resources. They have websites that have no traffic, so on a computing cycle, it doesn’t do a lot, but they’re in the back end, they’re playing around all the time, they’re using a lot of back end resources and just dallying around. But mostly they’re just wasting a lot of support time. And it costs money. And don’t forget the marketing cost to grab a customer and everything like that.
So the reality is that all of the small plans are really just a loss leader to get you into the store. It’s really like the BestBuy CD sales back in the day. You know, sell CDs for $12 gets you into the store. Maybe you’ll buy a TV someday. And that’s really what it come down to for the mid-level plans. Like the Pro plan on Shopify goes from $29 to $79 and the idea’s why is there not a $59? Or, on Bigcommerce, it goes from $429 to $79 too. Why is there not like $59 as well? The answer is really that once you’ve pretty much got your store running along kind of on the basic plan, they know that by the time you’re upgrading to the Pro plan, you’ve probably got a halfway decent business going. Maybe it’s not a great business but you’ve spent a lot of your own hours in there so you don’t really want to change.
And at the Pro level you’ve probably stopped emailing support all the time and you’re adding some apps in here, maybe you’ve got a developer or something, but now you’re more of a steady customer and they can rely on that. So they’re making some money off you there. The other side is that on the Unlimited plan or on the Enterprise plans and whatnot, once you start going past the Plus to the Pro plans is that that’s really where they make most of their money, on Enterprise. And that goes with almost every SAS app out there. The SAS industry, and again, that’s software as a service, they really make money off the Enterprise. All the other small plans are really like a teaser rate where they just get you into the door and they hope that once you’re there comfortable long enough that they’ll make money off you.
If I had to guess, the other way that some of these stores make money is just off probably people that just keep trying to keep the hope alive of an ecommerce store, then they just never cancel their small plan and maybe they just keep it as a side business or whatever and they’re willing to do it, but that doesn’t get anybody rich. That just kind of keeps the servers alive at the end of the day. So Enterprise is really where they make all their money. So going back to what Mike said why is there this huge jump from the Pro and Unlimited to the Enterprise? I think it’s really the fact that they know they’ve got you locked in at this point and they really are ready to take money off the table on their end, so that’s where they really want to do it.
So it’s a very big pain to migrate and I’m sure Mike’s not going to enjoy migrating IceWraps from Bigcommerce over to Shopify if he does it. So that’s a little bit of standing back and giving a little bit of insight into the business model of being a software business. And to go into another direction real quick, in terms of Shopify, I want to add a few points over here unless you have anything first you want to add to what I just said, Mike.
Mike: Nope. Just the fact that moving over to Shopify is definitely not going to be a fun project. I mean the biggest thing is as an SEO guy, and you know this as well as I do, I mean we have a site that ranks number one for every darn thing that we’re trying to really in that industry and the thought of moving and taking a chance at losing rankings makes my skin crawl. But that’s another whole story and we’re running late on this episode, so I’ll just let you kind of get to your point there.
Grant: Okay. Yeah, being like the first to really do the – I did the migration before, Mike, when I moved ChoppingBlocks from Miva Merchant to Shopify. I definitely knew about kind of the heartache there, but I guess when you don’t have traffic on Miva, it doesn’t really hurt. So now, to kind of balance out things a little bit because we’ve been a little bit pro-Shopify here. You know, I have moved one site to Shopify for a reason, but if you’re on BigCommerce and you’ve got your pitchfork, I’m just going to give you a reason reasons why you might want to reconsider.
One of them, like Mike said, is that the Shopify checkout is under their control and you can’t change your checkout whatsoever. That could be a good, that could be bad. I think it’s a little bit of a wash for the same reasons that Mike said because it’s on a different domain and that makes it cheaper for Shopify because they don’t have to issue SSL certificates for everybody and that costs money. It also prevents a lot of hair-brained idiots from going in and screwing up your checkout, which could be a bad thing. Sometimes you do want to be able to modify your checkout. If you’ve got some really custom type of products that you’re selling maybe you do actually want to go and modify those. Shopify, you’re SOL. There’s nothing you can do. So to some people, it could be worth it to have that checkout.
The other thing is that you’re stuck using Stripe on Shopify. If you just don’t like Stripe for whatever reason, if you think they have bad support, or if you prefer your merchant provider maybe you enjoy running your merchant provider through BOA that uses first data or Chase or whoever, you can’t. You’re just stuck. You know, you’re on their label.
The other thing, what Mike said with carrier shipping and whatnot, that’s kind of a big deal for a lot of people. Most people don’t ship super-light small items and you need to charge shipping and whatnot. On Shopify, you can add that as an add-on separately. Even though it says that you need to be on the Unlimited plan for $179, you can actually be even on the basic plan and you can add it to your account. It’s a monthly fee. I think it’s around $19 to $30. It might be like $29 but you can add real-time shipping and that’s one thing they don’t show on their website, so that’s another.
The other thing, too, is that Shopify, at the end of the day, it’s a much cleaner and a much easier back end and UI, but Bigcommerce does beat it in features pound for pound, especially for the Pro plan and the basic plan because Bigcommerce has an unlimited amount of variants. Shopify tops out at 100, which creates all sorts of problems if you have different colors that have to match with different sizing. Like if you sell shoes you’re in serious doo-doo on Shopify unless you use like a third party app. Bigcommerce can handle it no problem.
Shopify has a stronger API so you get to work around a lot of the limitations, but at the point, you’re paying for apps and you’re upping your price. Bigcommerce just has a much, much superior system when it comes to anything doing with options, up selling, variations, and they have a much, much more advance couponing system than Shopify, which Shopify has just a completely one-dimension couponing system, which is a real big pain if you enjoy marketing as much as I do, and it doesn’t really give you a lot of room to move.
So out of the box, Bigcommerce, pound for pound, in my opinion, has much more features than Shopify. And so, at the end of the day what it really comes down to is what makes you more money. I’m actually going to say here that it’s really business-dependent on which platform you should be looking at in terms of what’s going to make you more money. If you’re simply looking at the baseline price of how much it costs to run your store on Bigcommerce or Shopify, that’s not the right way of approaching it. You need to be looking at which one has the most features to enable you to get your business going.
Shopify, it’s almost like a blank slate. You’ve got a lot more room to bulk on things to make it where you need to go, so it’s a little bit more customizable. And on the other hand, it’s a lot easier if you’ve got a simple store. Bigcommerce, again, it’s more of a little bit of a medium-tier winner. At the very basic entry level, Shopify has it beat hands down. At the Enterprise level, I think they’re a little bit neck and neck. But on the mid side, I tend to think that Bigcommerce has it beat in some categories, not all.
So anyhow, that’s just want I want to say to try to give it a bit more balance. That said, nobody’s happy with rate increases, but hopefully we’ll see something big coming out of Bigcommerce in the next year.
Mike: Yup. And with that, good stuff, Grant. I’ll wrap up this episode. We’re running a little bit late on this episode. Been trying to keep them to 30 minutes but he had a lot of good stuff to talk about this week. So hopefully, you got some insight into Bigcommerce and Shopify if you aren’t on either one of those platforms or if you are if it makes you want to switch or you kind of at least know about some other rate stuff coming down the pipeline. Hopefully it helps you with all that stuff. So real quick before we close up the show, if you have any questions that you want us to answer on a future podcast, feel free to head over to EcomCrew. Hit us up on the contact form over there or on Facebook, Twitter, any of that good stuff. We monitor all that and we’ll get back to you eventually. Sometimes it takes a little bit of time because we’re quite busy these days, but we see all those comments and we’ll definitely get back to you on those.
And if you have a second, please head on over to iTunes. We talk about this every week and very few people do it, but the ones we do get, we really enjoy reading those comments and we’re probably going to start reading those on the podcast when we get them in because we love reading them. So head over to iTunes, leave a comment. We’d love to see them. If you also have suggestions on ways to improve the show or if there’s particular things you like about it, leave that in the comment and we’ll see that and read those on the podcast. So until next week, everybody, have a good one and we’ll talk to you then.
Grant: All right. See you, everybody.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.