Shopify App Pricing: 3 Frustrations Merchants Face (And How We’re Avoiding Them)
Shopify App Pricing: 3 Frustrations Merchants Face (And How We’re Avoiding Them)
A look inside our pricing decisions at Early Bird, and a look at the complicated pricing, unfair fees, and pushy upgrade tactics out there.
We’ve been doing Pricing research for our Shopify app Early Bird.
Reading app reviews, scrolling through forums, and talking to Shopify store owners (referred to as merchants below).
3 Pricing frustrations Shopify merchants don't appreciate, but many Pre-order and Back-in-Stock apps do it anyway:
Confusing Pricing models
Commission fees per sale
Push Pricing
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Confusing Pricing Models:
Many apps make it a headache for merchants to figure out what they'll pay; usually a mix of the following:
Charging percentage-based commissions at a different % per tier
Some are gradually discounted to a lower % as you sell more (still within the same tier)
Charging you per email or SMS sent (as add-ons, not included in your subscription)
Charging you incrementally based on your monthly orders
Charging you based on your Shopify Plan
Gating the number of products you can choose to offer pre-orders and back orders
Gating different features for each tier.
That's a lot of different things to consider just for Pricing.
It shouldn't be this complicated. More than likely, these apps haven't done any Pricing research.
For Early Bird, it's a simple flat fee based on orders and emails, with no hidden costs.
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Commission fees per sale:
Predictability is important. Commission fees, especially percentage-based ones, make it hard for merchants to know exactly how much they'll pay for the app each month.
They usually have two questions:
How does your app help them make money, save money, or save time?
How many orders do they need per month for your app to pay for itself?
Sharing a couple of quotes from our qualitative research:
"If the app costs more than Shopify's subscription itself, I'm not using it."
"I think in how many orders do I need to break even the cost for this app, and can this app directly help me get more sales."
Commission fees per sale *might* suit a store that's just starting out, but for many other merchants, you're eating into their profits.
Sure, it means more revenue per merchant... but as some of the 1-3 star reviews show, your customers will churn once they find a better app with a different pricing model.
We're listening to our potential customers' frustrations and betting on a simple Pricing model.
Playing a positive-sum game for the long term, rather than squeezing every dollar out of merchants.
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Push Pricing:
Some apps force merchants to pay for a higher tier for just one feature, and often for a big jump in Price.
This puts more pressure on the app to drastically generate more revenue than before or the merchant churns and it becomes a lose-lose situation.
Push Pricing used to be the norm. With so many Shopify apps out there offering the same features nowadays (although poorly built), merchants will likely churn once they find an app with a fairer Pricing model.
(This is true across SaaS, not just Shopify apps.)
Early Bird's tiers are based on usage and value metrics:
X pre-orders per tier
X back orders per tier
X emails per tier
With non-product value added for our higher tiers:
Personalised 1:1 onboarding and first campaign launch by yours truly
Advanced product analytics to help optimise your launches and inventory planning
Priority feature development (i.e. Have a say on prioritising what's already on our roadmap.)
Bonus: I'll take you to a delicious hot pot or Korean BBQ dinner
We have a strong conviction that Pull Pricing is the right approach.
If we help you grow, your business will naturally require an upgrade. Win-win.
All thanks to bootstrapping - we don't have to meet made-up growth targets and get to decide on what's best and most fair for our customers.
I’ve published a 1-min interactive demo for our Shopify Pre-order app on our landing page. You can check it out here. (Shout out to our friends at HowdyGo!)
If you’re thinking of setting up your own Shopify store and need some feedback, you can leave a comment below or connect with me on LinkedIn.
Until next time,
Josiah