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Comment by joking | Hacker News Reader

you seem to forget about the credit card rates, which are the 2.9% of your sales. I don't know in other countries, but where I live you can get the same conditions than for a physical pos terminal from a bank with around 1% rate. a 2% of your sales can easily grow to something that you can optimize.

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I did almost mention those. Negotiating POS rates is in the realm of much bigger shops than I've run. At the 100k/mo mark, that's $2k/mo, which... I'd honestly still take shopify, but yeah, it starts to be worth asking about.

Shopify is a hair more expensive than some competing processors, but when I last dealt with it, they were in league of paypal, stripe, square, etc, so it wasn't a differentiating factor for us, and I suspect that's true for most businesses of our size.

Of course it's not perfect and would eventually be re-engineered, but I'd happily pay $3K/mo to make $100K/mo.

if you take in account that when selling physical items the selling margins are between 15% and 25%, you are paying 3k to make 15K profits, thats a 20% of your benefits. In much cases those 3k could be the difference between a profitable business and one that isn't profitable.

Yeah, that is the issue we have. Something like Stripe at 2.9% you don't think twice with a high margin SASS product, on 15% margins and enough volume though it makes sense to go through some pain to setup with a cheaper processor.

This isn't necessarily a fair comparison - card not present transactions have always had a much higher rate than point of sale transactions due to the increased risk of fraud. There's an open-ended question of if new entrants like Apple Pay can bring down those card not present fees thanks to their integration into your apple id, but tbd.

at least in europe with 3d secure authentication, it's easy to get rates under 1% for a new business. If you have big volume is easy to go downwards from that.

I get that using stripe or paypal it's easier sometimes, but for woocoomerce and alikes you usually have plugins already developed to use other payment platforms.

For 40 hrs/wk at $60/hr, is $10,000/mo.

If Shopify means they hire this guy for a tenth of the time, they save $9000.

They would have to be moving 300k/mo for hiring a full time to even break even.

In any case you can do what everyone else does, bake the fee into your prices and call it a day - it's not like you can compete with Amazon on the low-prices front anyways.

2.9% is the rate for their $30 a month plan, their $300 plan is 2.4% which leaves you within 1% from most of the cheapest payment processors while getting a ton more 'value' IMO.

In europe it’s even 1.8% on their $300 plan.

They let you choose among a wide range of processors

It`s important to note that they add a 2%/1%/0.5% transaction fee on top of your processor fee with Basic Shopify / Shopify / Advanced Shopify plans, respectively.

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