Shopify eliminates revenue share for devs with less than $1 million in revenue
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Shopify app developers won’t have to pay the 20% revenue share on the first $1 million in app subscription fees each year, the company announced at its Unite developer event June 29, 2021.
Starting Aug. 1, 2021, Shopify will no longer withhold 20% of app subscription fees for app developers who opt into the new program until a developer and all of its associated apps reaches $1 million in annual revenue (as calculated in U.S. dollars).
If and when that threshold is hit, the revenue share will be 15% rather than 20% — and Shopify will only take revenue share on fees in excess of $1 million.
Shopify also noted that the meter resets each year, so a developer who hits the threshold one year won’t be locked into the share.
This will effectively boost app developer revenues, especially those with less than $1 million in revenue, significantly.
Shopify billed the move as a way to show its commitment to supporting its app development community.
It’s worth noting that by making this change, Shopify is effectively forfeiting just under $200,000 in revenue for an app generating $999,999.99 in revenue, just under the $1 million threshold. A more modest app generating $50,000 in subscriptions means Shopify will lose out on $10,000 in revenue share.
Under the new structure, Shopify will still charge 2.9% to cover payment processing fees.
Shopify says that Shopify partners will have to opt in to the new revenue share program starting Aug. 1.
Also starting Aug. 1, Shopify will charge developers a one time fee of $99 to start the processing of listing an offering in the app store. Developers can create accounts prior to Aug. 1 to avoid the fee, Shopify notes.
Later this year, Shopify will also start to offer new payout methods for app developer partners, including bank transfer. Currently only PayPal is supported.
For more details about these and other Unite announcements, read Shopify’s wrapup.