Smart business owners will understand the value of using an eCommerce platform for their online store and there are no shortages of systems to choose from. Squarespace is one of many — including WooCommerce, BigCommerce, Magento, Weebly, and Shopify — competing to be installed and used as the bridge between a customer and the merchant.
When researching the best eCommerce platforms, online retailers need to keep an eye on whether there are any transaction fees that come with their eCommerce platform package.
Transaction fees: what are they?
Transaction fees are a charge that a business incurs when processing a credit or debit card transaction and range between 2-4% of the overall purchase price. While this may not sound like a lot, transaction fees can add up.
For example, a small online retailer processes around 100 transactions a month with an average order value (AOV) of $50. Their eCommerce platform charges the retailer 3% per transaction and their payment gateway charges 2% to process the payment. For every $50 spent with the online store $2.50 is automatically deducted in these two different types of transaction fees. Over a month this amounts to a loss of $250.
Business owners need to take into account the impact of transaction fees when researching viable eCommerce platforms for their business. No business wants to incur a loss that can potentially be avoided.
Fees can be overwhelming, especially when they are not clearly labeled. Take a look at all the fees PayPal merchants should be aware of.
Understanding Squarespace and Stripe transaction fees
Squarespace is a content management system (CMS) that offers customers a choice of two platforms: Website or Online Store. Within each platform is an entry level and a more advanced tier, cumulating in four eCommerce platform options overall.
The main benefit of choosing Squarespace as an eCommerce platform is its ease of setup — especially when compared to other eCommerce platforms. Squarespace has also won awards for their visually striking and customizable themes, making the CMS a go-to for business owners who want an eye-catching design.
Squarespace enables owners to scale their business. This is because Squarespace offers four tiers of eCommerce platforms, meaning that there is no need to switch platforms as your business grows.
Squarespace Website Transaction Fees
Using the Squarespace Website platform is best suited for an eCommerce business that is in its first year of business and is expecting to sell a minimal amount of products. The website package from Squarespace offers benefits such as free custom domain, the ability to sell unlimited products, and mobile optimization.
The transaction fees for using Squarespace’s Website platform begin at 3% for the personal package and lowers to 2% for the business package.
Squarespace Online Store Transaction Fees
The Squarespace Online Store platform is similar to the Website offering, albeit with a few additional features including integrated accounting, inventory management, abandon checkout recovery, and real-time carrier shipping. The Online Store option is targeted toward more established businesses and those that will benefit from the aforementioned additional features.
There are zero transaction fees for Squarespace’s Online Store.
Squarespace partners with Stripe to allow for businesses to accept payments to their online store. Squarespace doesn’t use any other payment gateway in their business.
In the US, Stripe sets its fees as 2.9% + 30 cents per transaction. These rates do change depending on the country that is being traded from. In the UK, the Stripe fee is 1.4% + 20p.
How can I avoid transaction fees?
Transaction fees can be avoided when using Squarespace, as long as you invest in the Online Store platforms. Priced at $26 or $40 per month (when billed annually) an upfront investment could save you money in the long run — especially if you have a medium to high transaction rate.
There is no way to avoid paying Stripe fees, this rate is set in stone for all businesses, no matter how big or small.
Some simple math can help business owners calculate whether they will be better off paying for a transaction fee free eCommerce platform.
If a business owner is set to lose more than the subscription cost in transaction fees, it would make financial sense to invest in the Squarespace platform that has a 0% transaction fee for $26 or $40 per month.
Business owners should think carefully and analyze transaction fees before committing (or not committing) to an eCommerce platform. Not doing so could end up losing your business money, especially if you’re going to be seeing a higher amount of transactions.
Control offers the tools to help you keep track of your Stripe payments and business revenue metrics, including AOV. Sign up today for a 14-day trial.