Shopify issues: Is It Bad for Small Businesses?

November 19, 2022

If you search for the term “eCommerce platform”, you'll probably see Shopify in the top results on search engines.

Shopify has a share of 28.51% (2.6 million) out of 9.2 million eCommerce websites in the USA. With such a massive share in the market, Shopify seems retailers' first choice to start their online business.

Shopify success rate of eCommerce stores is said to be around 5% to 10% (Store Leads). The reason why Shopify stores are said to fail can be for numerous reasons, not solely related to Shopify.

In this article, we’ll not re-state what’s been already said for Shopify issues, we'll share our own observations, which are based solely on our direct conversations with over 2,000 eCommerce merchants.

Why do Shopify businesses fail?

Though there might be hundreds of reasons why Shopify stores can fail, there’s also one thing we’d want to point out, which is nothing to do with Shopify issues.

We believe that Shopify stores can fail due to unrealistic expectations. It's common to come across blogs and YouTube videos promoting claims like "How I Made $10K on Shopify Dropshipping in Just 10 Days."

However, it is crucial for aspiring entrepreneurs to consider factors such as advertising budgets, effective marketing strategies, identifying their ideal customer profile (ICP), and achieving market fit. Falling for sensationalized hype can lead to business failures.

Is something wrong with Shopify?

So, if you search for the "Shopify issues" or "disadvantages of Shopify" on the Internet, you'll get a handful of search results consisting of things like multichannel integrations, poor website performance, integration of ERP, lack of email hosting, etc.

However, none of these are related to the real success rate of Shopify stores or the actual problems with Shopify.

Our experience with our previous project, Nextsale, was instrumental in guiding us to understand the issues with eCommerce giants, which eventually led to the birth of Uvodo.

Nextsale is a conversion optimization tool for Shopify, WooCommerce, and BigCommerce stores. At Nextsale, we were always in constant communication with our customers, gathering their feedback to help them succeed online.

Should you want to read more about the journey of Nextsale and the birth of Uvodo.

Believe us, common issues with eCommerce platforms, especially with Shopify, were not what you'd encounter through a Google search.

Now that we know what is not wrong with Shopify and the success numbers have nothing to do with Shopify issues, let's explore the real issues that come from real retail experience.

Shopify is too costly for small businesses

Although the Shopify platform offers a 14-day free trial, you will have to pay a monthly or annual fee to unlock its full features and make your online store go live on the web. Shopify fees can range from $19 to $299 monthly.

However, the cost of running a business on Shopify isn’t only about the pricing plans. What we’ve been told and seen is that in order to run a successful and fully operational online business on Shopify, you must install up to 10 apps from Shopify App marketplace.

The added up charges on the billing cycle is one of the problematic Shopify issues

And the cost of using apps add on to the monthly cost of $500 to $1000 per month.

It means that, even if you selected the Basic plan, it doesn’t mean that you’ll pay $19 monthly. At the end of your billing cycle, you’ll get additional charges for:

Shipping label fees
Domains, themes, and one-time app fees
Shopify tax (calculation fees)
Shopify email
Taxes
Billing credits

You can refer to Shopify Charges to learn more about what to expect on your invoices.

Transaction fees for using 3rd party payment gateways

If you want to utilize your preferred payment gateway for your market, such as Flutterwave or Mollie, you have to pay extra fees.

The lowest pricing plan includes a 2% transaction fee if you don’t use Shopify Payments and use third-party payment providers.

In addition to that, you will have to pay 2.9% of the value of the transaction + 30 cents per transaction. For a beginner with a limited budget, these costs can swell up to huge amounts, which might become too costly.

Complex setup and regulatory challenges

Based on our interactions with eCommerce retailers, complex setup and regulations are not only related to Shopify, but also other eCommerce platforms.

To sell on Shopify, you don't need a business license. It’s super easy to create an account on Shopify and start adding your products.

However, things can get complicated when you start selling your products, connecting payment gateway, regulating taxes, shipping, etc. These complexities can indeed vary depending on your location, the location of your customers, and the specific payment gateway you choose. It's important to research and understand these aspects to comply with local laws and create a smooth customer experience.

Shopify deters scalability

Shopify – like other SaaS platforms – is not ideal when you have business expansion in your mind and thinking long-term about selling online. Shopify is great for small to medium businesses, but it is not capable of supporting big online businesses that require a wide range of products and their variations. In fact, Shopify has a limitation on the number of product variations.

Consequently, to cope with your demanding online business, you’ll be siphoned into subscribing to the Shopify Plus plan which starts from $2,000 per month for standard setup and integrations along with hidden costs.

Plus, you have to pay 6 months ahead or the annual price to start using Shopify Plus. However, notice that this plan comes with its benefits, but this can become a real burden on your pocket considering other costs too.

Is Shopify good for small businesses?

Shopify is a great platform to start online business, only if you have a good budget to spend on your store customization, marketing, collaborate with Shopify Experts, and manage your expenses so you don't spend all your money too quickly.

The primary challenge for Shopify users can vary depending on the specific circumstances of the seller. As is the case with any eCommerce platform, one common challenge is attracting and retaining customers while continuing running your business online.

Shopify might be the best eCommerce platform to start an online business. However, the regulatory challenges, complex setup and high operational costs associated with running a business on Shopify can pose significant challenges, particularly for small and micro-sized businesses.

So, it doesn't matter if your business is small; what matters is your ability to manage and operate your Shopify store within your financial means. If you can do that, Shopify can be a viable option for your small business.

Best Shopify alternative for small businesses

We have listed some common Shopify issues that eCommerce retailers are facing.

Reflecting on the challenges that these eCommerce platforms bring, we built Uvodo to make online business easier for small businesses and solopreneurs.

We believe that Uvodo is an ideal eCommerce solution for small businesses, and here is why:

Uvodo offers a free plan that includes all the features available in the paid plans.
With Uvodo, there's no need to integrate additional tools or apps to manage your online business effectively.
Uvodo comes equipped with a suite of built-in marketing and eCommerce tools for small businesses.
Uvodo allows you to expand your reach by offering various shipping and delivery options, including cash on delivery and local pickup.
You can get paid faster with Uvodo Payments, eliminating transaction fees and the need for complex setups or merchant accounts.
Without any additional costs, you can access the payments you've received through Uvodo Payments via virtual Uvodo Card and multiple payout methods.
Uvodo provides specific payment gateways tailored to local markets such as Flutterwave, Razorpay, Mollie, Paystack, etc. Learn more about various ways to accept payments online with Uvodo.
With Uvodo, you can also create a payment link for your products or service and share it with customers to receive payments.