There is a lot of discussion about the merits of both WooCommerce and Shopify on a technical and usability level, and aim of this article is to explore the business side of it – the costs and constraints of both systems.

After all, unless your website is a hobby, it needs to be professional and functional, representitive of you and your brand. When you are selling your products online, your process and the user experience needs to be slick and frictionless. Both of these systems provide an effective ecommerce tool in the right hands.

DISCLOSURE: Our core business is managing WooCommerce stores, providing customers with a similar solution to Shopify at a flat monthly rate.

We are not against Shopify, after all it provides one of the most robust builder type ecommerce solutions to small business far exceeding its nearest competitors, but we are exploring the cost of the solutions in South Africa, and as such local conditions around availability and cost of technical resources do define the overall solution cost.

eCommerce options for SMEs in South Africa - Costs and Considerations 1

What about build cost?

For a very basic WooCommerce site along the lines of a basic Shopify site the build costs are very similar.

Shopify gets expensive with the add-ons for functionality – E.g. product search which costs US$9.99 per month if you have over 25 products. But the costs relating to building of it and adding content is very similar to WooCommerce.

However, building WooCommerce gets far more costly when additional functionality is added to enhance the user experience. Generally however these are once-off costs, and are well worth it for the on-going success of the online business.

Read: Comparing Shopify and WooCommerce in South Africa Part 3 – Build Costs and Considerations

What difference is there in South Africa?

South Africa has very tight foreign exchange controls and as such overseas payment gateways simply do not work in South Africa. Paypal is supported if you have a RICA’ed FNB Account linked to Paypal. But other than that, all the main international payment gateways like Stripe are simply unusable.

This means that South African businesses need to use a local payment gateway like PayfastYoco or Paygate. These payment processors charge around 3% of the value of the sale, no matter if you are using Shopify or WooCommerce.

But on Shopify, an extra 1% or 2% is added to the transaction fee depending on the monthly subscription you are on because you are not using the Shopify Payment gateway. For the Basic Shopify Subscription of US$29 (Approx R 425 at time of writing) per month the transaction fee is 2%. On the main Shopify package at US$79 (Approx R1,200 at time of writing) per month, the fee is 1%.

WooCommerce does not have any fees other than the Payment Gateway’s 3%, although we recommend some budget is put towards maintenance of the site.

Breaking down the running costs

If we exclude build and functionality costs and use a simple ecommerce site with less than 20 products, based in South Africa, we can work out the running costs of the two platforms.

For WooCommerce we are using our basic Management Service as a cost for the maintenance, and including hosting at standard rates, increasing processing power as turnover gets higher.

We already know that whether on Shopify or WooCommerce, the payment processor takes 3% of each transaction, so we can leave that out of the equation.

We are left with the following as running costs:

  • Shopify:
    • Subscription
    • Transaction Fees
  • WooCommerce
    • Maintenance
    • Hosting

Shopify has two subscriptions applicable to most businesses:

  • Shopify Basic
    • US#29 per month
    • 2% Transaction Fee
    • 2 Users
  • Shopify
    • US$79 per month
    • 1% Transaction Fee
    • 5 Users

Shopify Basic vs WooCommerce

US$29 per month

2% Transaction Fee

2 Users

eCommerce options for SMEs in South Africa - Costs and Considerations 2
shopify basic vs woo
Cost to run eCommerce in South Africa

Shopify vs WooCommerce

US$79 per month

1% Transaction Fee

5 Users

eCommerce options for SMEs in South Africa - Costs and Considerations 2
eCommerce options for SMEs in South Africa - Costs and Considerations 4
eCommerce options for SMEs in South Africa - Costs and Considerations 5

Summary

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This is Part 3 of a 4 Part series of Articles - A Business comparison of Shopify and WooCommerce in South Africa

1 - Overview

2 - Build Costs

3 - Running Costs

4 - Other Options