Small Business Loans For Beauty And Nail Salons

Whether you’re the owner of an established beauty salon or it’s your dream to open your own nail spa, one thing is clear: your business needs money. As the old saying goes, it takes money to make money, but what happens when the money’s just not there?

If you’re the owner of a beauty or nail salon and you need money to grow your business (or you’re ready to get your business off the ground), consider a small business loan as one of your best resources. With a small business loan, you can pay your business expenses, tackle that unexpected emergency, or expand your customer base with a new marketing campaign.

No matter what your needs, a small business loan has you covered. Before diving into the application process, know what to expect, the kinds of loans you’ll encounter, and which type of loan works best for your business. Read on to learn more about the options available to you to start or expand your beauty or nail salon.

Financing Need Best Loan Type Recommended Lender
Equipment Purchasing Equipment Financing Lendio
Business Expansion SBA 7(a) Loans SmartBiz
Supplies & Inventory Line Of Credit Fundbox
Emergency Funding Business Credit Cards Chase Ink Business Cash
Marketing & Advertising Short Term Loans Credibly
Cash Flow Cash Flow Loans StreetShares
Starting A Salon Startup Loans BlueVine

Equipment Purchasing

Your beauty salon equipment is outdated and desperately needs to be upgraded. Your nail salon is booming, and you need to purchase more stations and equipment to better serve your customers.

This equipment comes at a cost — a cost that your business may not be able to afford.

If you need to purchase equipment but don’t have the money to buy it outright, there’s a financing option. Instead of draining your bank account, consider equipment financing.

Equipment Financing

Equipment financing is a simple concept. A lender provides you with the money you need to purchase equipment. This allows you to take possession and put the equipment into use immediately. Because the lender provided the funds, you don’t have to pay the full equipment costs out-of-pocket. Instead, you’ll be able to pay back the loan through affordable scheduled payments.

Equipment financing can only be used toward the purchase of equipment for your business. For beauty and nail salons, this could include hair dryers, stylist chairs, or a point-of-sale system. Rates, terms, down payments, and loan amounts are based on creditworthiness. Most lenders look for credit scores in the high 600s, although some will accept lower credit scores. High-risk borrowers may be required to put more money down or pay higher interest rates.

Recommended Option: Lendio

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Lendio is a loan-matching service that connects you to over 75 business lenders. Through Lendio, you can receive offers from multiple lenders with just one application. This cuts down on the amount of time you’ll spend shopping for a loan while ensuring you receive the best offers.

Lendio offers equipment financing for business owners. Other loan products offered through Lendio’s network include term loans, SBA loans, lines of credit, and business credit cards.

For Lendio’s equipment financing programs, all borrowers must be in business for at least 12 months, bring in at least $10,000 per month in revenue, and have a credit score of 650.

Equipment loans of up to $5 million are available, with repayment terms between 1 and 5 years. Interest rates start at 7.5% for the most qualified borrowers. Fees vary by lender, and the equipment being financed typically serves as the collateral.

Business Expansion

Your business and customer base are growing so much, it’s time for your salon to expand. Maybe you want to build an addition to your existing salon, or you want to purchase commercial real estate to open a new location. While business expansion means that your business is growing, it also means additional expenses.

Most business owners don’t have the means to fund expansion expenses out-of-pocket. Even if they do, tying up such a large amount of their capital isn’t always the wisest move. Luckily, you don’t have to worry about taking on this burden by yourself. With a Small Business Administration loan, you’ll be able to break large expenses into smaller, more manageable monthly payments.

SBA 7(a) Loans

The Small Business Administration offers multiple loan programs, but the 7(a) loan is one of the most popular. With high loan limits, flexible repayment terms, and low interest rates, it’s easy to see why this is a top choice for qualified business owners.

The SBA 7(a) loan can be used for almost any business purpose, including business expansion. You can update your existing salon, purchase commercial real estate, or fund any other business expense with this loan.

SBA 7(a) loans are available in amounts up to $5 million. Repayment terms are 10 years for most purposes and maximum terms of 25 years are available for commercial real estate purchases. Interest rates are set at the prime rate plus a maximum of 4.75% based on the amount of your loan and repayment terms.

SBA 7(a) loans are typically reserved for the most qualified borrowers. To qualify for SBA loans, you must have a credit score in the high 600s and meet the SBA’s definition of a small business. Your credit report must be free of liens, collections, recent bankruptcies, and foreclosures. If you’ve previously defaulted on a government loan, you will not be eligible. Your business must be in an approved industry, based in the U.S., and have a time in business of at least 2 years.

Recommended Option: SmartBiz

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The process for receiving an SBA loan is notoriously long. Some borrowers wait months just to get the funding they need. SmartBiz is a lender that simplifies the process.

SmartBiz offers SBA commercial real estate loans from $500,000 up to $5 million. Interest rates are 6.75% to 8% with repayment terms up to 25 years. Working capital loans up to $350,000 are available with fees between 8% and 9% and repayment terms of 10 years.

SmartBiz charges several fees for obtaining an SBA loan, including referral fees, packaging fees, guarantee fees, and closing costs. Collateral may be required to receive your loan. Loans can be funded in as quickly as seven days through SmartBiz.

Supplies & Inventory Purchasing

POS systems for spas

There are critical supplies you need for daily business operations, not to mention customer inventory — like shampoo, hair brushes, nail polish, etc. — that helps bring in additional revenue. When you don’t have the supplies you need, you’re unable to perform the services that customers seek. When your inventory is depleted, you’re missing out on this additional revenue stream.

Whether you’re running low on supplies and inventory or you forecast a seasonal increase in the near future, there comes a time when you need to replenish your stock. If you’re not in a financial position to pay cash for supplies and inventory, consider applying for a business line of credit.

Business Line Of Credit

A business line of credit is a type of revolving credit that can be accessed as needed. Once approved by a lender, you’ll be given a credit limit. You can make multiple draws on your account, so you can receive the money you need right when you need it.

With a business line of credit, interest or fees will be charged only on the used portion of funds. As you repay your loan through weekly or monthly payments, these funds will become available for you to use again.

Lines of credit are available for most salon owners, regardless of credit score. While some lenders have credit score requirements, others base their approval decision on the performance of the business. Most lenders have time in business limits typically between 6 and 12 months, but there are some lenders that do not have minimum requirements. Annual revenue requirements are between $50,000 and $100,000 to qualify for most business lines of credit, but again, certain lenders do not have requirements in place.

Recommended Option: Fundbox

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Fundbox is a lender that provides lines of credit up to $100,000. To qualify, a borrower must have at least two months of activity in an accounting software app supported by Fundbox. If the borrower is unable to meet this requirement, bank statements showing transactions over the last three months can be submitted.

There are no credit limit requirements to qualify for a Fundbox line of credit. The application process is quick and easy, and an approval can be given in just minutes. Once approved, funds are available for immediate withdrawal and are typically transferred as soon as the next business day.

Fees for using Fundbox begin at 4.66%. Repayment terms are set at 12 or 24 weeks, and there are no prepayment penalties.

Emergency Funding

It happens to the best of us: an unexpected expense. If an emergency arises, even the most financially responsible salon owner can be taken by surprise.

If you’re facing a financial emergency, don’t panic. Take a deep breath and know that there are options for getting over this financial hurdle. Read on to learn why a business credit card can be a critical resource in these stressful situations.

Business Credit Cards

A business credit card is just like a personal credit card, except it is used to cover business expenses. Once you’re approved for a credit card, the lender will set a credit limit. You can use the card as often as you wish anywhere credit cards are accepted, up to your assigned credit limit.

Credit card payments are due each month and will be applied toward the principal balance and the interest charged by the lender. As you pay back borrowed funds, they become available to use again.

A credit card is helpful during emergencies because you don’t have to wait for approval from the lender. If you’ve already received your card, you can use it as needed for any business expense, from covering operating costs to purchasing supplies. Credit cards can even be used for recurring expenses month after month.

With responsible use, a credit card can not only help you cover unexpected expenses but can also lead to great rewards. Many lenders offer rewards programs with their credit cards. Just by using your card, you can earn points with every qualified purchase that can be redeemed for cash or other perks.

Recommended Option: Chase Ink Business Cash

Chase Ink Business Cash



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Annual Fee:


$0

 

Purchase APR:


15.24% – 21.24%, Variable

If you have good to excellent credit, you can qualify for the Chase Ink Business Cash card. This card comes with no annual fee, an introductory APR of 0% for the first year, and variable APRs of 15.24% to 21.24% after the introductory period.

With this card, you can receive 5% cash back on the first $25,000 spent toward internet, cable, and phone purchases, as well as office supply store purchases. You’ll receive 2% on the first $25,000 spent at restaurants and gas stations and 1% cash back for all other purchases.

When you sign up for this credit card, you can receive $500 cash back just by spending $3,000 or more within 3 months of opening your account.

Unsure if this is the right card for you? Learn more about other Chase Ink credit cards for your business.

Marketing & Advertising

Customers are critical to the success of your beauty or nail salon. Without customers, you don’t have a business. While you may already have clientele, a growing business always needs more customers. To bring in these customers, marketing and advertising is critical.

Sure, you could rely on your social media presence alone, but if you really want to expand your business, you’ll need to launch a marketing and advertising campaign. If the cost of marketing and advertising is holding you back from growing your business, consider applying for a short-term loan to make this expense more manageable.

Short-Term Loans

A short-term loan is a loan for a specific amount of money that is paid back through smaller scheduled payments over a set period of time. While most short-term loans have repayment terms of one year or less, some lenders offer terms up to three years.

Most short-term loans don’t have an interest rate. Instead, these loans have a fee known as a factor rate. This multiplier is used to determine a one-time cost that is added to your loan.

Because short-term loans are for a specific amount, it’s important that you plan out your expenses to make sure you receive enough money. Do your research, calculate pricing, and form a plan for your marketing and advertising campaign before applying for a short-term loan.

Short-term loan requirements for time in business and annual revenue vary by lender. Your personal credit score will be considered, but scores in the 500s are accepted by some lenders. Borrowers with the best credit scores will be approved for higher loan amounts with lower fees and rates and better terms.

Recommended Option: Credibly

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Credibly provides short-term loans of up to $250,000 for eligible borrowers. Repayment terms are available for 6 to 17 months. Factor rates for the most qualified borrowers are as low as 1.15. A one-time origination fee of 2.5% of the total loan amount is charged by the lender. Credibly payments are made daily or weekly.

To qualify, borrowers must have a minimum credit score of 500. All borrowers must have been in business for at least 6 months and have at least $15,000 per month deposited to their bank accounts.

In addition to its short-term working capital loans, Credibly also provides business expansion loans and merchant cash advances.

Cash Flow

As a salon owner, it’s not uncommon to experience periods where business is slower than usual. Even when your cash flow slows down, you still have expenses … and this can be a problem.

Fortunately, a cash flow loan can provide you with the money you need to fill in these gaps. Whether you need funds to meet payroll or money for daily operating expenses, a cash flow loan can provide you with the capital you need when business slows down.

Cash Flow Loans

A cash flow loan provides you with the money you need when your cash flow has slowed. These funds are used to pay your expenses to keep your business running as it should.

There are several types of cash flow loans available. If you know the specific amount of money that you need, a term loan is a good choice. With this type of financing, you receive a lump sum and repay the loan, plus interest, through regular installments.

A line of credit is another type of cash flow loan. These loans are best for businesses that may have recurring expenses that require multiple draws.

Qualifying for a cash flow loan requires a minimum credit score of 500. Time in business and annual revenue requirements vary by lender.

Recommended Option: StreetShares

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StreetShares is a lender that offers multiple loan options to small- and medium-sized businesses. Term loans and lines of credit are available in amounts up to $250,000 with repayment terms up to 36 months. Contract financing is also available.

To qualify for a StreetShares loan, a business must be in operations for at least one year with minimum revenue of $25,000 per year. A credit score of at least 620 is required for all borrowers.

Starting A Salon

While we’ve addressed common financial challenges you’ll face when expanding your salon, what if you aren’t yet at that point? What if you’re the new business on the block, and you need extra money to really get your endeavor off the ground?

If you’re looking for money to start your own beauty or nail salon, qualifying for business loans can be difficult. However, it’s not impossible to receive the money you need to open your own salon if you know where to look. The first place to start is with a startup loan.

Startup Loans

A startup loan is a loan that is used to pay the expenses associated with starting a business, such as hiring employees, buying or leasing real estate, or purchasing equipment like POS systems and software.

For most startup loans from alternative lenders, a minimum credit score of around 600 is required. Interest rates are based on the borrower’s personal creditworthiness.

Some lenders require a minimum time in business. If this is a requirement, another option that can be considered is a personal loan. A personal loan can be used to fund startup costs and may come with a lower interest rate for borrowers with a solid credit profile.

Recommended Option: BlueVine

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BlueVine is an alternative lender that provides lines of credit up to $5 million for new businesses. Repayment terms of 6 months are available through BlueVine. The APR for receiving this financing is 15% to 78%.

To qualify, borrowers must be in business for at least 6 months. A minimum credit score of 600 and $120,000 in annual revenue is required to receive BlueVine’s line of credit. The application process is easy, there are no hidden fees, and lines of credit are funded quickly.

Bad Credit? Your Best Financing Options

The best business loans require high credit scores, so does that mean you’re left out in the cold if your credit history isn’t where it needs to be? Actually, there are financing options available for you if you have bad credit, but you should be aware that these loans come with higher interest rates, lower borrowing amounts, and a possible need for collateral.

Before applying for a loan, you should always know your credit score. You can obtain your free credit score quickly and easily online. Once you have your score, you can get a better idea of the types of loans available to you.

The best options for borrowers with bad credit are lines of credit, equipment financing, and short-term loans. These financing options typically have lower borrower requirements — including credit scores — than other loans.

Business credit cards are also a great choice for borrowers with poor credit. There are unsecured options available to borrowers with lower scores. Anyone that doesn’t qualify for an unsecured card can receive a secured card backed by a security deposit. After making several on-time payments, the borrower can build their credit and qualify for better financing options.

Bad credit limits your lending options and results in a higher overall cost for loans. If your funding need isn’t immediate, your best move is to take steps to raise your personal credit score. Although this option takes time, you’ll receive better loan offers that are more affordable for your business.

If you need financing urgently before you can build up your credit, consider applying for the Capital One Spark Classic business credit card. This credit card is available to borrowers with scores as low as 580.

Capital One Spark Classic For Business


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Annual Fee:


$0

 

Purchase APR:


24.74%, Variable

With this credit card, you’ll be able to receive unlimited 1% cash back rewards on all purchases. Because this card is designed for borrowers with lower credit scores, the APR is fairly high at 24.74%. However, there is no annual fee, and Capital One reports to multiple credit agencies, allowing you to build your credit (provided you make your payment on time each month). As your credit score rises, you’ll be qualified to apply for business credit cards and other loan options with lower interest rates and better terms.

What You Need To Apply For Beauty & Nail Salon Business Loans

What you need to apply for a beauty or nail salon business loan varies based on the lender you work with and the type of loan you’re seeking. For example, a business credit card application typically requires some basic information, including your business name, federal tax ID number, annual revenue, social security number, and contact information.

For other financial products, such as SBA loans and startup loans, more extensive documentation is required. This includes but is not limited to:

  • Personal Financial Statements
  • Business & Personal Tax Returns
  • Balance Sheets
  • Income Statements
  • Profit & Loss Statements
  • Bank Statements
  • Future Financial Projections
  • Owner Resumes
  • Business Licenses

Requirements vary by lender, so once you’ve chosen a lender, make sure you discuss what documentation and information are required. Make yourself available throughout the lending process to provide more information as needed. Learn more about small business loan requirements before you apply.

Final Thoughts

It’s common to encounter financial hurdles while growing your salon, which is when taking out a loan just makes sense. By doing your research and becoming a responsible borrower, you’ll be able to boost and expand your business without clearing out your checking account. That’s the beauty of small business loans.

The post Small Business Loans For Beauty And Nail Salons appeared first on Merchant Maverick.

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Shopify VS Squarespace

Shopify VS Squarespace

Pricing

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Cloud-Based Or Locally-Installed

Tie

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Specific Size Of Business

Tie

Hardware & Software Requirements

Tie

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Ease Of Use

✓

Features

Web Design

✓

✓

Integrations & Add-Ons

✓

Payment Processing

✓

Customer Service & Technical Support

Negative Reviews & Testimonials

✓

Tie

Positive Reviews & Testimonials

Tie

✓

Security

Winner

Final Verdict

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Right away, Shopify and Squarespace both score points in my book for their names. Shopify is all about helping you build an online store where customers can shop — “shop-ify-ing” a regular website, as it were. Squarespace, by comparison, is a more traditional website builder, allowing you to create a literal “square space” (or series of square spaces) where people can view your content and images on the internet.

Thank you, Shopify and Squarespace. Your names actually make sense.

Indeed, Shopify is a household name in the world of shopping cart software, whereas Squarespace is well-known for its attractive and modern site design capabilities. Squarespace is more than just a pretty face, though. In the last few years, this platform has added ecommerce functionality at a surprising level of sophistication.

If you’re here for an epic cage match between Squarespace and Shopify, I’m guessing you’re thinking about both of these platforms in terms of ecommerce. You’re in luck, because this is the precise focus of our comparison. How does Squarespace’s ecommerce functionality and design measure up to the ecommerce powerhouse that is Shopify? How do they compare in terms of pricing, customer service, and payment processing? Keep reading for our take on these and other key facets of Shopify and Squarespace.

Don’t have time to read an entire article? Take a look at our top-rated eCommerce solutions for a few quick recommendations. Every option we present here offers excellent customer support, superb web templates, and easy-to-use software, all for a reasonable price.

 

Pricing

Winner: Squarespace

Both Shopify and Squarespace offer free 14-day trials with no credit card required, and neither charge setup or cancellation fees. From there, the two platforms begin to diverge. Here’s how the differences play out:

Shopify

  • Price Range: Choose from $29/month (Basic), $79/month (Shopify), or $299/month (Advanced) plans. There’s also a $9/month plan (Lite) for selling in-person, for embedding little “buy” buttons on other sites, and for selling on Facebook — but you don’t get an actual online store at all, so we’re leaving this plan out of our comparison for the most part.
  • Annual Subscription Discount: Save 10% when your subscription is paid annually upfront, or 20% if you pony up for two full years. For example, the Basic Plan becomes $26 or $23/month, and the Shopify Plan becomes $71 or $63/month.
  • Subscription Structure: All Basic ($29/month) plans and above include unlimited storage, products, and bandwidth. Higher subscription levels add a few features and additional staff accounts. Subscription levels also affect your Shopify transaction fees and your payment processing fees. Which leads us to…
  • Additional Transaction Fees: If you choose Shopify Payments (powered by Stripe) as your payment gateway, you are not charged any separate transaction fees. As an added bonus, you also see a gradual decrease in your payment processing fees with Shopify Payments as you climb the subscription ladder. However, if you use an alternative payment processor and not Shopify Payments, Shopify does charge extra transaction fees, beginning at 2.0% on the Basic plan. Thankfully, these fees gradually decrease to 1.0% and 0.5% as you increase your subscription.

Squarespace

  • Price Range: For ecommerce capability, you must skip over the $16/month plan and start at the $26/month (Business) level. However, merchants who’d really want to take advantage of Squarespace’s ecommerce features in a manner that’s comparable to Shopify are likely opting for the $30/month (Commerce Basic) or $46/month (Commerce Advanced) plans.
  • Annual Subscription Discount: The Business plan drops to $18, Commerce Basic to $26, and Commerce Advanced to $40 per month when paid upfront in one annual lump sum. You also qualify for a free domain registration for one year when you pay your main subscription annually.
  • Subscription Structure: Similar to Shopify, features are added as you increase your Squarespace subscription level. Bumping up to Commerce Basic or Advanced will eliminate separate Squarespace transaction fees.
  • Additional Transaction Fees: A 3.0% fee (above your gateway fees) is incurred by Squarespace on every purchase if you’re on the Business Plan. This additional transaction fee is eliminated, however, on Commerce Basic and Advanced.

For a direct comparison with Shopify, use the smaller print, month-to-month figures for Squarespace (Commerce Basic $30 and Commerce Advanced $46). Shopify promotes month-to-month figures ($29, $79, or $299).

Confusing enough for you? With all these pricing components, you can’t actually perform a true apples-to-apples comparison of cost. In truth, both Shopify and Squarespace offer a fair market price for their services. I will say that the transaction fee issue is problematic with both companies, especially since many competing platforms have eliminated these extra charges altogether. The good news is that each platform at least offers some way out of these fees.

In the end, I’m primarily basing my pricing verdict on one key factor: Squarespace offers its complete arsenal of features for only $46/month ($40/month if paid annually). In contrast, Shopify reserves its premium features for sellers with much deeper pockets (six and a half times deeper, to be exact). The big question is: does Squarespace offer enough ecommerce features at that $46/month level? The answer will depend on your business needs, but you can keep reading to develop a clearer picture of each platform.

Cloud-Based Or Locally-Installed

Winner: Tie

Your Shopify or Squarespace store will be fully-hosted. No need to download and install either one locally.

Specific Size Of Business

Winner: Shopify

Both platforms allow unlimited bandwidth and products, but Shopify is better at accommodating a wider range of business sizes and product catalogs. In addition, Shopify provides a natural growth option via Shopify Plus, whereas Squarespace offers no enterprise-level plan at this time. On the other hand, if you happen to sell a handful of very expensive products (and that’s what makes your business “big”), Squarespace could still work swimmingly for you.

Hardware & Software Requirements

Winner: Tie

Since Squarespace and Shopify are both SaaS (Software as a Service) platforms, you only need a computer, an internet connection, and an up-to-date browser to use either service. Both also provide Android and iOS apps for managing and editing your store.

Regarding supported browsers, Squarespace edges out Shopify by offering Chrome and Safari support on Linux operating systems, while Shopify only works with Windows and Mac. Meanwhile, Shopify stores are optimized for Samsung Internet in addition to Chrome and Safari browsers when viewed on mobile. Depending on your point of view, these finer points may or may not make a difference, so I’m still calling it a draw in this category.

Ease Of Use

Winner: Shopify

With both platforms specializing in general ease of use, we really need to examine Squarespace and Shopify in terms of usability for ecommerce.

Neither platform has a dedicated setup tutorial inside the dashboard, but both have documentation and instructional videos handy. If you’re accustomed to using or testing popular ecommerce platforms like Shopify, Squarespace will definitely have its own learning curve. Once I got the hang of it, though, I could operate the backend quite smoothly.

When you create a trial account with Shopify, you’re taken to the main admin panel. Shopify’s admin is structured like most ecommerce dashboards I’ve seen. Although you can preview your storefront at any time, your backend functions are kept separate from the storefront.

Shopify Dashboard:

With Squarespace, however, you must choose a theme (you can change it later) before you even get to see your admin panel. Once the admin opens, your dashboard is actually a combination of your backend control panel on the left, and your storefront preview on the right.

Squarespace Dashboard:

Although I can vouch that both platforms are very easy to use in the grand scheme, I find navigation of Squarespace’s backend to be slightly trickier than Shopify’s. The Squarespace UI is structured so that there are more dashboard layers to dig through — and then dig back out of again. Additionally, the left control panel menu changes (or even disappears) depending on what layer you happen to be in at the moment, which can be disorienting. This is in contrast to Shopify’s menu, which remains a fixed anchor point for admin navigation.

Take a quick look at the following screens from each platform to see what I mean:

Add A Product — Shopify:

You can see above that my main menu remains fixed on the left side of the dashboard as I enter my product details.

Add A Product — Squarespace:

With Squarespace, I’m already a couple of dashboard layers in, my left sidebar is gone, and I must dive one more screen deep from here to even enter my price. Also, what is not shown above is that you can’t just jump right in and start adding products with Squarespace like you can with Shopify and other online store builders. Even with Squarespace’s ecommerce-friendly templates, you must create a separate product page for your website first. I admit I had to resort to Squarespace’s documentation to figure this out, since I’m accustomed to ecommerce dashboards that make adding your first product a completely frictionless process.

Adding and managing inventory is just one piece of running an online store, but it remains a reliable ease of use test case. While you can list unlimited products with Squarespace, I think the backend interface is better designed for sellers offering a relatively small number of aesthetically-oriented products. Merchants with a large inventory will appreciate Shopify’s clear menus, efficient navigation, and the way in which product data is ultimately organized.

Features

Winner: Shopify

Shopify is the deserving winner in the features category. With solid out-of-the-box functionality and a rich add-on ecosystem, the blunt truth is that Shopify has spent much more time and resources cultivating features specifically for online sellers.

That said, there are a few features Squarespace offers that even Shopify lacks. Another thing to keep in mind is that Squarespace’s comparatively small feature set may still be just right for certain sizes and types of companies.

Key features of both platforms include:

  • Unlimited products, bandwidth, and storage
  • Free SSL certificate
  • Sell physical or digital products
  • Shipping & accounting integrations
  • Inventory & order management
  • Offer gift cards
  • Create discounts and coupons
  • Checkout on your domain
  • Abandoned cart recovery
  • Guest checkout & customer accounts
  • Real-time, carrier-calculated shipping
  • Analytics & reports
  • SEO tools

I’d say the Shopify versions of some of the above features are stronger or more versatile than the Squarespace versions. For example, the discount engine is much more flexible with Shopify.

Now, here are a few features that differentiate the two platforms:

Shopify

  • App store with thousands of integrations
  • Point of sale integration (Shopify POS or third-party POS)
  • Manual order creation (virtual terminal)
  • Proprietary shipping platform (Shopify Shipping) for carrier discounts and label printing
  • Extensive dropshipping capability
  • Enterprise expansion available via Shopify Plus
  • Abandoned cart recovery at cheaper plan level

Squarespace

  • Unlimited staff contributors on all ecommerce plans
  • G Suite integration (full year free)
  • $100 Google AdWords voucher
  • Free domain for a year if you pay annually
  • Customizable checkout forms
  • In-dashboard product image editing
  • Third-party calculated shipping rates at cheaper plan level

Web Design

Winner: Squarespace

Both platforms offer elegant, modern templates that are fully mobile responsive. Here’s a quick comparison of template stats:

Shopify Themes

  • 67 total templates, most with 2-4 style variations
  • 10 templates are free and supported by Shopify developers
  • Remaining third-party themes cost $140-$180

Squarespace Themes

  • 90 templates organized into 21 template families
  • All templates are free and supported by Squarespace developers

Within these themes, both platforms facilitate the adjustment of fonts, colors, and layouts without any coding experience. In fact, I’d say both services offer more flexibility in this area than the average ecommerce store builder. If you still run into design limitations or simply want to alter the code, each site builder makes it relatively easy to customize your store with HTML, CSS, and Javascript.

The overall web design winner is a tough one to call, because that decision really depends on the type and number of products you intend to sell, with Squarespace catering to smaller catalogs with visual interest. If we were deciding strictly based on the variety of pre-made templates designed for stores selling lots of stuff, Shopify would snag the win.

That said, here are some ways Squarespace stands out when it comes to design:

  • All templates are free, and all are created and supported by Squarespace.
  • Offers a more versatile drag-and-drop editor for page layout customization.
  • Allows you to edit your product images from within your dashboard.
  • Uses a common templating language (JSON), versus Shopify’s own invented language (Liquid).

Was this category too close to call? Share your thoughts in the comments!

Integrations & Add-Ons

Winner: Shopify

Shopify has an impressive app store with around 2500 integrations — more than the vast majority of SaaS ecommerce platforms at large. While add-ons can certainly increase your monthly expenditure with Shopify, there’s no denying that your choices are plentiful. Plus, since a huge community of developers and merchants interact with Shopify apps, you also have access to thousands upon thousands of detailed user reviews.

Squarespace takes a completely different approach to integrations. No app store is offered, but Squarespace spins this as an advantage. Any pre-built integrations (about 70 in total) are already incorporated into your dashboard and fully tech-supported by Squarespace. Aside from payment providers (Stripe, PayPal, Apple Pay) and shipping carriers (UPS, USPS, and FedEx), there are just a small handful of official Squarespace integrations specifically related to ecommerce. Here are a few key add-ons:

  • ShipStation: Order fulfillment
  • Xero: Accounting
  • MailChimp: Email marketing
  • Zapier: Workflow automation, multi-app connector

Just like many Shopify apps, several Squarespace apps have monthly subscription fees of their own. And, just like with Shopify, you can always build custom integrations if you have those skills or can hire someone who does. To put things in quick perspective, however, Squarespace has one official shipping/fulfillment app in ShipStation. Shopify has over 280 choices in its “Orders & Shipping” category, and over 600 results pop up if I simply type “shipping” in the app store’s search bar.

The win in this category goes to Shopify, the reigning monarch of ecommerce integrations. Besides keeping decision-making overload at bay, the trick with Shopify add-ons is to always check the quality (including quality of developer support) and ongoing cost of each integration.

Payment Processing

Winner: Shopify

Shopify wins at payment processing for one primary reason: flexibility. Consider the sheer number of gateway options with Shopify — over 100. With Squarespace, Stripe and PayPal are your only choices. More gateway options means availability in more countries and currencies, more ways for your customers to pay, better odds of finding the perfect processor for your specific needs, and even the opportunity to customize your own pricing model and rates in some cases. With Shopify, you can also accept cryptocurrencies or set up manual payment methods like cash on delivery, money orders, and bank transfers.

This is not the end of the story, however. Factor in the additional transaction fees that may be charged by either platform depending on your situation, as well as Shopify’s payment processing discounts with Shopify Payments (powered by Stripe), and the comparison becomes more nuanced.

As we examine these complications further, keep in mind that the going rate to process ecommerce transactions with most gateways these days is 2.9% + $0.30.

Here’s how your processing will work with Squarespace according to your subscription level:

Squarespace + PayPal and/or Stripe

  • Business ($26/mo.): 2.9% + $0.30, + 3.0% Squarespace fee = 5.9% + $0.30 per transaction
  • Commerce Basic ($30/mo.): 2.9% + $0.30
  • Commerce Advanced ($46/mo.): 2.9% + $0.30

Those are the only potential processing costs you’re looking at with Squarespace. That additional 3.0% Squarespace fee on the Business plan is pretty brutal, but as soon as you upgrade to Commerce Basic for an extra $4/month, it disappears. For this reason, I don’t think the Business plan is a sustainable option for most ecommerce stores.

Now, let’s take a quick look at Shopify, remembering that using Shopify Payments as your gateway provides two perks: 1) no extra Shopify transaction fee on any plan, and 2) decreased payment processing fees as you upgrade your overall Shopify subscription.

Shopify + Shopify Payments

  • Basic ($29/mo.): 2.9% + $0.30
  • Shopify ($79/mo.): 2.6% + $0.30
  • Advanced ($299/mo.): 2.4% + $0.30

Shopify + Alternative Gateway (Generic Example)

  • Basic ($29/mo.): 2.9% + $0.30, + 2.0% Shopify fee = 4.9% + $0.30
  • Shopify ($79/mo.): 2.9% + $0.30, + 1.0% Shopify fee = 3.9% + $0.30
  • Advanced ($299/mo.): 2.9% + 0.30, + 0.5% Shopify fee = 3.4% + $0.30

Another twist is that Shopify Payments is currently only available for businesses located in 10 countries, so you’re stuck with an alternative gateway and that pesky Shopify transaction fee if your country isn’t included. (Squarespace at least doesn’t punish you for something you can’t control — your location.) On the flip side, if you are in one of the supported countries, you could opt to use Shopify Payments in addition to any of the other gateways Shopify offers to increase your customers’ payment options.

In a perfect world, both platforms would let you pick your own processor from among many, and never penalize you with extra transaction fees for any reason! Both Shopify and Squarespace have their own flaws in this regard.

So, what does this all mean for your business? The short answer is math. To determine the real winner in this category for your own company, you must consider your monthly subscription cost to either platform, your average number of transactions per month, and your average transaction size — not to mention the countries and currencies involved. Because the best platform and subscription level for your business depends on these and other factors, I award Shopify the payment processing win for at least making things interesting!

Customer Service & Technical Support

Winner: Shopify

In terms of overall quality of customer support, both Shopify and Squarespace receive mixed user reviews. That said, Merchant Maverick’s own experiences with customer service and technical support would award Shopify the victory in this category. We’ve had better luck contacting the Shopify support team through the available channels — even when they’ve been unaware that we are software reviewers on the prowl.

Shopify also has more available support channels and more open-hours. Take a look:

Shopify

  • Phone: 24/7
  • Email: 24/7
  • Live Chat: 24/7

Squarespace

  • Phone: None
  • Email: 24/7
  • Live Chat: Monday-Friday, 4AM-8PM

Squarespace publishes a whole manifesto on its website explaining why no phone support is offered if you’d like to read it for yourself. Although they don’t come right out and say it, the bottom line is that this helps keep overall costs down. Meanwhile, not being able to contact a live person (even via live chat) after 5pm Pacific time is pretty brutal if you’re running an online store. Squarespace should know better — ecommerce never sleeps:

One final note in this category: both platforms provide several self-help resources — community forums, blogs, video tutorials, webinars, knowledgebase articles, and the like. However, note that Shopify resources are 100% geared toward ecommerce, whereas you’ll have to wade through other topics to find ecommerce resources at the Squarespace site.

Negative Reviews & Complaints

Winner: Squarespace

When comparing user reviews for these platforms, it’s important to keep in mind the difficulty in teasing out feedback on Squarespace that is specifically related to ecommerce. Despite its growing ecommerce capability, Squarespace typically ends up in the generic website builder category on most review sites, with users discussing traditional website building issues.

Those caveats aside, here are some of the most common issues that come up for each platform:

Shopify

  • Extra transaction fees when not using Shopify Payments
  • Costly add-ons
  • Poor customer support
  • Frustration with Shopify Payments

Squarespace

  • Glitches & bugs
  • Poor/limited customer support
  • Limited theme customization

Of course, traditional website builders tend to get raked over the coals for the slightest theme customization limitations. We’ve already said Squarespace’s design capability is quite good overall, particularly when compared to a lot of shopping cart builders. When customers do criticize Squarespace specifically on ecommerce, there are no consistent patterns emerging so far. For this reason, I award this category to Squarespace based on a “no news is good news” argument. We’ll keep checking back for patterns.

Positive Reviews & Testimonials

Winner: Tie

Both Shopify and Squarespace tend to rate highly for overall customer satisfaction on user review websites. On top of that, both platforms are known for their ease of use and elegant templates. And, along with all the negative review of customer support both software programs have received, users of both platforms have been known to also sing praises for customer support. The combination of these factors led me to call this one a draw.

Once again, we’re faced with the dilemma that there’s not a whole lot of feedback about Squarespace’s ecommerce offerings. I have definitely seen several generic comments, such as “good for ecommerce!” Honestly, I think people are mostly pleased (and perhaps a bit surprised) that there’s some solid ecommerce capability available with Squarespace at all. I haven’t come across many users directly comparing their experiences with the two platforms.

Security

Winner: Shopify

Our combatants are quite close in this category. Both offer PCI (Payment Card Industry) compliance, a free SSL (Secure Socket Layer) certificate for your site, two-factor authentication for logging in to your account, a CDN (Content Delivery Network), and even provide methods for complying with the GDPR (General Data Protection Regulation) laws implemented by the EU in 2018.

The main difference I can see is that Shopify’s checkout pages are covered by an industry-standard, 256-bit shared SSL certificate. Squarespace’s checkout pages are covered by a less-robust, 128-bit certificate. My understanding is that while 128-bit encryption may end up working slightly faster, it’s technically less secure.

Final Verdict

Winner: Shopify

Squarespace put up a good fight in several categories, but Shopify emerges victorious as the better ecommerce website builder. Shopify’s pricing, core feature set, and vast app store can serve budding sellers on the Lite plan, all the way up to enterprise clients using Shopify Plus. Meanwhile, ecommerce was quite literally an afterthought for Squarespace. The platform’s developers have done an admirable job adding features for online selling, but they just can’t compete with Shopify’s dominance here.

As we’ve said time and again in this comparison, Squarespace still provides an interesting option for sellers who’d like to feature a small number of products with aesthetic appeal. Especially if you’ve already been using Squarespace to develop your company story and brand, I’d definitely recommend fully exploring the ecommerce feature set — perhaps by bumping up your subscription for just month or two — before completely abandoning ship for Shopify or another dedicated shopping cart builder.

I’ll offer one more interesting twist before you head off to test Shopify and/or Squarespace for yourself. Some users have actually used the two services in combination. How? By integrating those “buy now” buttons from a $9/month Shopify Lite plan into an existing Squarespace website. It’s a roundabout option, to be sure, but it also gives you access to in-person selling with the Shopify POS app. At any rate, take that as some final food for thought, and best of luck in your search for the perfect ecommerce platform.

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