What Is Shopify and How Does It Work?

What Is Shopify and How Does It Work? The Complete Guide for Ecommerce Newbies

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Shopify is a widely-used ecommerce platform that lets you set up an online store, sell products, and manage the entire process all in one place. This guide will show you how Shopify works and what it offers, the pros and cons of using Shopify, and which plan is right for your business.

What is Shopify?

Shopify is an ecommerce platform you can use to build an online store. It lets you sell both online from your own website and/or in person using a point-of-sale app. Shopify is easy to use, whether you're a beginner dropshipper or a high-growth D2C brand.

You can sign up for a free trial of Shopify to test it out for yourself. During your trial, you can build your own store, test out free Shopify apps, and start selling products online.

Shopify offers several subscription tiers to meet different business needs. The Basic plan costs $29 per month when billed annually, making it the most popular choice for solo entrepreneurs. 

For businesses requiring additional features, the Grow plan supports small teams, while the Advanced plan helps companies scale effectively. Large enterprises can choose the Plus plan for complex business operations. The platform also offers a Starter plan at $5 monthly for creators focused primarily on social media sales.

How does Shopify work?

Shopify works by unifying your online and retail sales on a single platform. With Shopify, you can bridge functions like inventory, marketing, payments, and shipping. This enables you to streamline your business and integrate any tools you need.

Shopify is cloud-based software, meaning you can access it from any internet-enabled device. Plus, it's a fully hosted ecommerce solution, which means Shopify merchants do not have to worry about hosting their own website.

how does Shopify work

What's included with Shopify?

Shopify starts with a core subscription that provides everything you need to turn your idea into a business and start selling. It includes an online store with a fast and secure checkout, customizable templates, and tools to sell across different channels.

Core subscription

Here's what you get with your Shopify subscription:

  • A custom domain: Shopify lets you register and host a domain securely with its platform.
  • Customizable themes: The Shopify theme store has many free themes with integrated support for animations, including hover effects and dynamic scrolling.
  • AI features: Shopify Magic helps you create on-brand content, set up auto-replies, and write product descriptions.
  • Access to mobile shoppers: Reach millions on the Shop app. You can personalize your mobile store to reflect your online store with customizable collections, categories, and navigation.
  • The world's best checkout: All Shopify plans include a high-converting one-click checkout trusted by top brands.

Shopify checkout

Additional products, plans, and services

As your business grows, Shopify grows with you. You can add powerful upgrades directly through your admin area, often without extra cost.

Shopify POS. For in-person sales at a single location or across multiple retail spots, try Shopify POS. Shopify's retail plans cover both your online and physical store sales.

Shopify Plus. If you're scaling up, Shopify Plus is a customizable solution for high-volume businesses. It's a robust platform used by world-renowned brands. With Shopify Plus, you can sell everywhere, benefit from powerful insights, and access strategic partnerships.

Shopify Enterprise. For corporations requiring maximum flexibility and performance, Shopify Enterprise delivers scalable architecture designed for massive operations. This solution provides flexible infrastructure options, including headless configurations, while maintaining unified control over direct-to-consumer, business-to-business, and retail channels. Enterprise clients benefit from premium support services and optimized conversion performance at scale.

Shopify Plus

Tools for building customer relationships 

Shopify also provides tools to build and maintain long-term relationships with your customers, including:

  • Shopify Markets: Expand your reach globally. Sell to customers around the world from one online store.
  • Messaging tools: Communicate with customers directly using Shopify Inbox. Set up automated messages and use insights to focus on conversations that lead to sales.
  • B2B on Shopify: Provide personalized experiences for B2B customers. Manage B2B and direct-to-consumer sales, storefronts, and inventory all from one platform.
  • Shopify analytics: Use the platform’s analytics toolkit to make informed decisions with detailed reports on customer behavior.
  • Shopify Forms: Capture emails easily with this free app. Forms integrates with Shopify discounts, email marketing, automations, and more for effective segmentation.

Shopify forms

These features and tools help you engage with your customers more personally and effectively.

Customize how you sell with Shopify’s App Store

Shopify's App Store features various apps for customizing your storefront. You can browse by category, sort by popularity or new additions, and choose apps that improve your site’s functionality, help boost sales, streamline customer service, or address other specific needs. 

Shopify app store

If you can't find what you need, you can work with Shopify Expert Partners to build custom solutions for you.

Why Shopify? The pros of selling with Shopify

Setting up an ecommerce business with Shopify comes with many advantages. Here we cover several key differentiators:

1. Detailed Shopify admin

Shopify is a comprehensive tool for an online retailer, allowing you to understand your store's setup in-depth.

In the back end of your Shopify store, you'll find a whole range of reports and features that help you understand how your online store is performing.

You can find your best-performing product pages. You can view the number of orders at a glance. And you can even watch a real-time view of your website visitors to see what stage of the sales funnel they're in.

2. Free features

If you're building a new website, you probably need to pay for a theme (the design/look of your website). But on Shopify, you get a free customizable theme by default.

You can modify your free Shopify theme to suit your brands. You can change the font, modify the color scheme, add photos, and more. This is why Shopify is ideal for beginners wanting to dive in or play around to see the possibilities. 

3. Shopify is on the cloud

Another advantage of Shopify is that your website is hosted on a cloud network instead of a server. Anyone who has ever paid for a server knows they can crash at the wrong times, leading to losses and customer churn.

For example, servers often go down on Black Friday or during big events. If you share a server (which is what most new entrepreneurs can afford), you have to hope that the other websites aren't as popular.

Cloud hosting reduces the odds of your website being down, allowing you to run your business easily. And the hosting cost is bundled into your subscription, making it one less thing to worry about.

4. There's a plan for everyone

Launching an ecommerce store can get expensive quickly. You need to pay for products, marketing, a new domain, and ecommerce software, and premium features beyond the basics can add up quickly. 

But Shopify has a pricing plan for everyone. If you're on a really tight budget, you can pay for Shopify Starter for only $5 a month. If you're looking for a more comprehensive, premium service, you can use Shopify Plus. You can upgrade your plans as your business grows, too.

5. Tons of apps

There's an app in the Shopify App Store for almost everything. You'll find countdown timers, image background removers, product sourcing apps, and more. While you need to pay for some Shopify apps, many are free to access.

Adding an app to your website isn't necessary. But if you're looking to add products to your store, consider checking out the DSers app (the Basic plan is free and lets you include up to 3,000 products in your store).

6. Low barrier to entry

Did you know people had to mail checks to Amazon when it first launched? Those days are over. Starting an online business is much easier now, and it will get even easier as time passes.

Shopify is leading the initiative of lowering the barrier for entrepreneurs to create online stores. Compare Shopify with other solutions and you'll know why thousands of people sign up for the platform annually.

Compare Shopify

Why not? The cons of selling with Shopify

While there are many benefits to opening and operating an ecommerce business via Shopify, you should get familiar with the potential downsides. Here are several cons:

1. It takes time to see the results

When building a Shopify store, what you're really building is a business, not a passive income stream.

And starting a business isn't necessarily an easy thing to do. Figuring out how to use Shopify and building a profitable store takes months of experimentation. It can take a while to know where every section of your store is located in the Shopify dashboard.

For the most part, Shopify is quite intuitive, but remember that it takes trial and error and a lot of practice. 

2. Shopify alone won't guarantee your success

Shopify has many features and apps that make running an online storefront easier than building something custom from scratch.

The catch is that it's up to you to make your store successful. You need to have the right mindset pushing you to learn. You need the marketing chops to promote your business better than the competition.

Overall, your success is in your hands, not Shopify's.

How to start selling on Shopify

If you're thinking of launching an ecommerce site using Shopify, there are a few steps you'll need to take before you can start.

Sign up for the free trial

Shopify offers a free trial that you can access without providing any payment information. Simply enter your contact details and some business information to gain access. After your trial period ends, you can continue using Shopify for just $1 monthly during your first three months, making it affordable to launch your business with minimal upfront costs.

Find the products you want to sell

To be successful on Shopify, it's important to find products that interest consumers and have the potential to turn a profit. With tools like Spocket, you can find the right products and add them to your online store in a few clicks.

Customize your store

The look of your store can make or break the customer experience. Shopify offers more than 250 pre-built templates you can use to customize your store. These designs feature mobile-responsive layouts and require no coding knowledge to modify.

Activate payments

Shopify lets you accept payments via several methods, including Shopify Payments, PayPal, and Amazon Pay. You can even accept crypto payments by integrating relevant solutions into your payment processes.

Set up shipping

If you're buying and shipping your own inventory, you'll need to take care of the logistics. We recommend using Shopify Shipping for fulfillment, which reduces the chances of delays and offers some of the best carrier rates. 

To activate it, go to Settings > Shipping and Delivery and choose the relevant option.

Once you've completed these steps, you're ready to start selling on Shopify.

What can you sell on Shopify?

On Shopify, there are always new trending products you can sell on the platform. You can sell anything, from fashion and beauty products to goods for the home and garden. 

Here are a few popular products you can consider selling:

  • Clothing
  • Jewelry
  • Home accessories
  • Travel products
  • Baby or maternity products
  • Bags and luggage
  • Fitness accessories
  • Beauty products
  • Kitchenware
  • Pet products
  • Automotive accessories

Beyond physical merchandise, Shopify supports various business models including digital downloads, membership programs, subscription services, event tickets, and consulting services. This flexibility allows entrepreneurs to monetize different types of expertise and content.

However, Shopify also has some strict guidelines on what you can't sell. If you sell restricted products like the ones mentioned in Shopify's terms of service, you risk getting suspended from the platform. 

This list includes:

  • Certain firearms and their parts
  • Counterfeit or unauthorized goods
  • Gambling products
  • Regulated products or services
  • Adult products
  • Drug paraphernalia
  • Event tickets

Basically, if it's illegal or regulated, it's likely not permitted to be sold on Shopify. For those new to online selling, it helps to know how to avoid counterfeit goods when sourcing products for your business.

How to grow your Shopify store

You can grow your Shopify store in a number of ways. Here are a few ideas to get you started:

Create ads

You can run ads on various platforms, such as Facebook, Google, and almost any other social network. Ideally, you want to pick the platform where your audience spends the most time.

It's also important to choose a platform where the targeting options are expansive, allowing you to pinpoint your ideal customer exactly. To date, Facebook and Google are the most popular ad platforms. 

But ultimately, you want to pick the one that's best for your niche.

Leverage SEO

SEO (search engine optimization) is a powerhouse at bringing relevant traffic to your website. Almost all new store owners neglect ecommerce SEO as a growth tactic.

Often, new entrepreneurs want to make a quick buck, so they focus on ads. However, after months of investing in ads, they realize their acquisition costs are too high.

With SEO, GEO (generative engine optimization) and content marketing, you can drive organic traffic to your ecommerce website. The right strategy can also lower your acquisition costs and improve the conversion rate.

Promote on social media

Before making your store public, you should already have an audience. For example, starting an Instagram account a few weeks before launching your store allows you to promote to an audience at launch.

Shopify customer reviews

There are plenty of Shopify customer reviews on the web, so you can seek third-party validation about Shopify's credibility at any point. You'll find people sharing their experiences with Shopify on G2, Merchant Maverick, and many other websites.

Final verdict on Shopify

Shopify is an all-in-one commerce solution, built to empower entrepreneurs worldwide. With this platform, you can build your own online store and start selling in no time. Whether you want to start a new business or take your brick-and-mortar store online, Shopify has the features to support your launch.

Plus, Shopify lets you access discounted carrier rates via Shopify Shipping. This is an integrated tool that lets Shopify account holders buy and print shipping labels for their orders. 

To learn more about Shopify, sign up for a free trial and get to know the ecommerce platform on a more practical level. Shopify makes commerce better for everyone, so it might just be the perfect platform for you.

What is Shopify FAQ

Is Shopify legitimate?

Yes, Shopify is 100% safe and legit. Since launching in 2006, Shopify has released many features to help people create online stores. You can use the platform to set up, design, and manage your ecommerce store across multiple sales channels, including mobile, web, social media, and marketplaces, all safely and securely.

Is Shopify good for beginners?

Shopify is great for beginners to ecommerce, thanks in part to its intuitive drag-and-drop interface and ready-made templates. New users can quickly establish an online presence without technical expertise, while the built-in payment processing system allows immediate transaction acceptance. The platform also provides educational resources to help newcomers launch successfully.

Is Shopify good for small businesses?

In a word: yes. Shopify's pricing and user-friendliness make it one of the best options for small businesses. Signing up for the Basic Shopify plan gives you access to a store builder, free themes, payment gateways, unlimited products, and more.

For just $29 per month, you get all that, plus tons of learning resources to help you launch successfully. Shopify is also easy to use. You don't need any tech or coding skills to get the most out of its features.

How much does Shopify cost?

Shopify offers a range of pricing plans. Starter costs $5 per month and is ideal for creators looking to sell on social channels. If you need more features, you can sign up for the Basic plan, at $29 per month. Keep in mind, adding apps from the Shopify App Store may increase your monthly software expenses.

Is Shopify free?

Shopify provides a free trial period that lets you explore most features and plan options. Following this trial phase, new users can access Shopify for $1 monthly during their first three months, creating an affordable entry point for launching businesses. Various subscription tiers are available afterward to accommodate different business requirements.

What do I need to start selling online with Shopify?

To start selling online with Shopify, you'll need products to sell and a clear understanding of your target audience. Before fully committing, you can sign up for Shopify's free trial. This trial allows you to explore the platform, set up your store, and see how everything works, without any initial investment.

Where can I sell with Shopify?

With a Shopify online store, you can sell in various places. You can sell on your website, at physical locations like retail stores or trade shows, and through the Shop App. You can also list your products on marketplaces such as Amazon and eBay, on social media channels like Instagram and TikTok, and even engage in wholesale selling.

Is Shopify available in all countries?

Shopify is available in more than 175 countries and supports over 20 languages. You can accept Shopify Payments in the following countries:

  • United States
  • United Kingdom
  • Canada
  • Australia
  • Japan
  • Germany
  • France
  • Spain
  • Italy
  • Netherlands
  • Switzerland
  • Sweden
  • Denmark
  • Finland
  • Belgium
  • Austria
  • Portugal
  • Ireland
  • Czechia
  • Romania
  • New Zealand
  • Singapore
  • Hong Kong

If Shopify Payments is not available in your country, you can still use Shopify with approved third-party payment gateways (transaction fees may apply).

What is Shopify Payments?

Shopify Payments is an in-house payment processor by Shopify. It lets you accept payments through all popular payment methods, including debit cards, credit cards, Amazon Pay, Apple Pay, and even cryptocurrency.

Shopify Payments' main appeal is that it charges 0% extra transaction fees. This means you can keep a bigger portion of your net earnings after taxes and other deductions. Plus, the process works natively on Shopify online stores, eliminating the need to redirect customers to a third-party gateway, which creates an enhanced shopping experience.

What is Shopify Plus?

Shopify Plus is an advanced subscription tier targeting high-growth companies requiring sophisticated functionality, enhanced scalability, and specialized application access. This plan incorporates business-to-business tools, automated launch capabilities, professional point-of-sale features, and comprehensive support for multiple locations and international markets.

What are the benefits of Shopify?

Companies select Shopify for its adaptability and unified administration capabilities across multiple commerce functions. The platform enables business launches, brand-specific website creation, and multi-channel selling including physical locations and social media platforms. As operations expand, Shopify provides enterprise-level functionality, removing the need for expensive platform migrations.

What is Shopify for Enterprise?

Shopify's enterprise solution targets large-scale operations requiring maximum adaptability, performance optimization, and worldwide reach. This comprehensive system provides modular architecture options, managed infrastructure services, integrated sales channels spanning direct-to-consumer, business-to-business, and retail operations, plus premium enterprise support. Built for massive scale operations, it delivers optimal cost efficiency and conversion performance in commerce.

What can I sell on Shopify?

Shopify accommodates diverse product and service categories including physical merchandise, digital downloads, membership programs, subscription offerings, event experiences, and professional consulting. 

However, certain items are prohibited according to platform policies. Review Shopify's acceptable use guidelines to understand which products and services cannot be sold through the platform.

Want to learn more?