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What is Shopify and How Does It Work? (2023 Guide)

This probably isn’t the first Shopify guide you are looking at, is it?

But perhaps you won’t ever need to look for other guides about how Shopify works.

Why is that?

Because we have covered all that you need.

Table of Contents

  • What is the meaning of Shopify?
  • How Does Shopify Work?
  • What is Shopify’s Pricing?
  • What Can I Sell On Shopify?
  • Where Can I Sell Using Shopify?
  • Shopify Pros and Cons
  • Bottom Line.
  • Frequently Asked Questions (FAQs).

You might have come across this word, ‘Shopify’ while browsing the web. However, you are still unsure of how it operates or, why you should take note. Well, don’t worry because we are here to provide some breakthrough insights.

What Is the Meaning of Shopify?

In simple terms, Shopify is a fully hosted, cloud-based e-commerce platform you can use to start, grow, and manage an online store. Technically, Shopify is part of a subscription-based software-as-service(SaaS) sales platform.

Boasting of having millions of merchants at its disposal, Shopify is one of the leading platforms in the provision of e-commerce services.

As opposed to other e-commerce platforms, there is no requirement for software installation or a hosting service; Shopify has gotten you covered as it has everything essential to the success of any online store.

How Does Shopify Work?

Shopify unifies all your e-commerce on a single platform. In other words, it integrates your product data, customers as well as operational tasks in a single system that connects to all your sales channels seamlessly. With this highly coveted platform, merchants can build and customize an online store and then sell in multiple places, including but not limited to websites, smartphones, brick-and-mortar locations as well as pop-up shops, and other multiple channels from social media to online marketplaces.

Let’s dig deeper and have a look at how Shopify works from initial set-up to eventually managing sales.

  • Sign up to gain full access to the Shopify platform

As a new user, enjoy the exclusive benefits which come as a result of signing to the platform, a 14-day free trial. No credit card upfront. This is a risk-free two weeks trial!

  • Connect Your Sales Channels

            The presence of the account setup wizard connects your initial sales channels, which you are free to change and enhance at any given time.

             In case your preference is selling through social media accounts, just connect them in the setup wizard too as shown below.

  • Feed in Your Product Data or Find Items to Sell

The next step is to enter your product details, pricing, and images for products that probably you create or source yourself. You can as well tap into Shopify’s Handshake wholesale network and dropship vendors to find items to sell.

You should take note that the majority of sellers combine items they make or source themselves with related Dropshipping products to offer a versatile collection. Get more Information about Dropshipping business here.

  • Set up Your Payments

You can activate Shopify Payments with a single click to begin accepting payments immediately. You can also connect your payment processor to your dashboard. Luckily, Shopify supports over 100 external payment processors.

  • Set Up Shipping and Taxes

Click on to the setting tab and set up your shipping methods and fees and your applicable sales tax information.

As you continue to build your Shopify account, you can start selling once you have accomplished steps 1 to 5. Peruse through various marketplace channels, using the Buy button tool, and start selling. You can as well sell in-person with a POS card reader.

  • Set Up Your Shopify Online Store.

In case you want independently sell through your well-furnished and branded website, you are now ready to set up your Shopify online store. Shopify simplifies this with an assortment of plug-and-play themes that require a mere setup and added content to make it your own.

  • Process, Ship, and Track Order

As your order begins to roll in, you will manage everything within your Shopify dashboard. This is due to amazing Shopify built-in tools that make it easy to conveniently and effectively set up workflows for managing orders you ship yourself, dropshipping products, and even virtual items such as eBooks and music downloads. Shopify then emails order status and tracking information to your customers automatically.

You can count yourself lucky as you are now free and ready to explore Shopify’s sales-driving features like email marketing, abandoned cart remarketing, and blogging.

              What is Shopify’s Pricing?

To begin with, Shopify offers a cool three pricing plans ranging from the basic option ($29 per month) to their highest advanced option that is ($299 per month.).

 Here is a brief overview of Shopify’s pricing plan:

  • Shopify lite costs $9 per month with 2.9% +30¢ per online transaction
  • The basic cost of Shopify is $29 per month with 2.9% + 30¢ per online transaction.
  • The main Shopify plan costs $79 monthly with 2.6% + 30¢ per online transaction.

The cost of advanced Shopify is $299 monthly, with 2.4% + 30¢ per online transaction.

The fully hosted Shopify Plus platform starts at $2000 per month and Shopify Starter costs $5 per month.

Shopify’s monthly price plans range from $29 to $299.

Secret tip: save 10% on all your if you are up to an annual plan or 20% in case you sign up for two years.

Shopify Plans Comparison

Here is the rundown in table form on exactly what each plan offers.

 

Shopify lite ($9 per month)

It is a very rare feature and it supports in-person POS sales, and online Buy Button tools for non-Shopify websites, blogs, and email sales. Besides, it doesn’t provide the online store, social media as well as seller marketplace channels of the other plans.

Basic Shopify ($29 per month)

In case your store is relatively small or if you are just starting an average business, and you need a little e-commerce functionality, this plan is for you. It is the cheapest option available. It comes with all the fundamental requirements you need to start a new online business, including 2 staff accounts, 24/7 customer support, unlimited products, an online store with an existing blog, and sales channels. As if that is not enough, you also get a free SSL certificate, discount codes, manual order creation, as well as abandoned cart recovery.

Main Shopify plan ($79 per month)

This is the standard option. Slightly more expensive than the basic option. It comes with everything you get in your basic Shopify plan, which’s slightly enhanced. For instance, you get up 5 staff accounts, gift cards as well as professional reports

Advanced Shopify option ($299 per month)

It is the most expensive, yet highly modified Shopify plan. The advanced Shopify plan comes with a whopping 15 staff accounts and everything you get from the main Shopify package. You as well have access to an advanced report builder and third-party shipping rates.

Shopify Plus (from $2000 per month):

This exclusively offers enterprise-level features aimed at ensuring high volume, Multi-location, and multi-million dollar sellers. You should note the plan pricing, terms, and features are negotiated depending on sales volume and business needs at this level.

As it has been highlighted in our Shopify plan overview, Shopify also comes with a variety of  Shopify Payment terms.

Have a look at the breakdown of the terms below:

  • Basic Shopify plan: 2.9% + 30 cents
  • Main Shopify plan 2.6% + 30 cents
  • Advanced Shopify plan: 2.4% + 30 cents.

                          The in-person credit card rates include:

  • Basic shopping plan: 2.7%
  • Main Shopify plan: 2.4%
  • Advanced Shopping plan: 2.4%

Payment Processing and Transaction Fees

You have the option of either connecting your payment processor to Shopify or using the built-in Shopify payment option. With your payment processor, Shopify will add a transaction fee ranging from 0.5% to 0.2% of the total charge to every online sale. This fee doesn’t apply in case you use Shopify Payments.

Depending on your subscription plan, Shopify Payments offers flat-rate payment processing fees. It also supports in-person sales using Shopify’s mobile POS app and retail store POS system.

Shopify Shipping Cost

In any case, if you use shipping orders, you can use Shopify’s built-in shipping label printing on any plan. With this amazing feature, you will enjoy competitive discount rates on USPS, UPS, DHL, and other carriers, and be rest assured that your discounts increase on high-tier plans.

In addition, the shipping fee tallies each time an order is processed and a shipping label is printed. These costs are charged through your card when charges hit a threshold level depending on your average shipping volume. Nevertheless, in case you ship just a few orders every month, shipping charges are added to your monthly Shopify bill.

Other Shopify Plans, Pricing, and Costs

Here are additional costs to consider beyond what your plan offers if you want to add more functionality to your Shopify experience:

  • Shopify Point of Sale(POS), Hardware and Software.

With those demanding processes from the Shopify POS Software to devices like Shopify POS Go, it is possible that your online business needs in-person POS machines to process Payments, like at trade shows, and craft fairs, just to mention a few.

  • Shopify App Store Costs

This is only specific to third-party app providers in the Shopify Marketplace. They charge a small fee to allow you to add other functionality to your e-commerce store.

  • Domain name:

Expect a small of $14 per year when you register your unique domain name directly through the Shopify platform. It is also possible to buy your domain name elsewhere and migrate it to Shopify.

  • Email Hosting

Although Shopify doesn’t provide email hosting as an internal option, it gives room for you to set up email forwarding to your Shopify domain through a third-party hosting service. You in most cases pay for the service as part of your website hosting package.

                                         What Can I Sell On Shopify?

It is common knowledge that to succeed in an e-commerce business, three things are necessary; high –demand for products to sell, the skills to market them, and the insatiable zeal to succeed. Based on the discussion so far, you have already acquired the winner’s mindset—you ceaselessly learning, researching, and getting ready for success. However, finding a popular product to sell on Shopify can be a challenge. You should know that Shopify supports sales for virtually all types of goods and services, but the list below highlights the most underpinning ones for your e-commerce store:

  • Digital products that are delivered through download, including eBooks, music files as well as digital gift cards.
  • Health and fitness products.
  • Physical products that you ship by yourself.
  • Goods and services sellable in a retail store.
  • Dropshipping items that you ship to customers directly from your dropshipping suppliers.
  • Subscription boxes as well as memberships with automatic recurring payments
  • Online courses, tutorials, workshops, and webinars.
  • Tickets and passes for various events, local and international tours as well as attractions.
  • Products and services sold in-person via mobile locations.
  • Services sold and managed through online booking.
  • Donations and fundraisers.
  • Rentals sports equipment, formal wear, camera, and many more.

Kindly take note that Shopify has a list of prohibited items that include, but are not limited to alcohol and cigarette, firearms, explosives, live animals, and medical devices. If found selling such items they will be immediately removed from a subscriber’s product pages and your account may end up being terminated.

                                Where Can I Sell Using Shopify?

Being an inclusive online platform, Sales stores such as the online store, high-ranking social media sites, and POS are built into it. Also connected through it includes; Seller Marketplace, in-app sales, and online courses.

Below are a few highlights of the many sales channels you easily tap into using Shopify:

  • Social Media Sites: Include: The famous Facebook, Instagram, TikTok, Pinterest, Twitter, YouTube, and WhatsApp, all integrate with Shopify for the provision of seamless sales via shoppable posts, pins, and videos.
  • Shopify online store: This e-commerce store is the most ideal platform to build your brand and reach customers online.
  • Seller Marketplaces: List products on Amazon, Walmart, eBay, Etsy, and Lyst to connect with a wide range of market audiences.
  • In-person mobile selling: Shopify POS mobile card readers are ideal for pop-up stores, food trucks, mobile devices as well as local markets.
  • Retail store sales: Shopify POD Pro, supports retail store checkouts and store management workflows.
  • Non-Shopify websites and blogs: Shopify’s Buy Button embed, allows you to add shop features to reviews, articles, and posts found on other websites and blogs.
  • Branded mobile app: it also provides a branded in-app shopping experience with customized product recommendations as well as post-purchase offers.
  • Wholesale Buyers: Shopify’s handshake marketplace assists artisans and small manufacturers reach retail buyers for wholesale deals
  • Email and chat: Shopify’s Buy Button embed permits you to send shoppable emails, as the Shopify Inbox app converts chat sessions into sales opportunities.

Pros and Cons of Shopify

There exist pros and cons of Shopify, yet undoubtedly it is one of the biggest and most highly developed e-commerce platforms on the internet. As we have already covered above, this highly coveted platform comes with many tools and features that make it easy for you to set up an online storefront and manage it efficiently. Nonetheless, the existence of pros and cons of Shopify, might either make it an ideal or an unideal platform for you

 

                                                             Pros of Using Shopify
  1. Generally easy to use: This is one of the strongest wits of this app. Here, you do not need to go through a tedious process of launching and customizing your online business. It has a drag-drop tool that makes it possible for you to customize your store the way you want it without hustle and bustle.
  2. Availability of Customer Support: Knowing very well that it is almost inevitable to use technology without hitting the rock, Shopify, and Shopify has created a team of reliable and efficient people to help their users. Besides, it has a 24/7 support team that can attend to you at any time of the day.
  3. Multiple payment Processor: Shopify boasts of having multiple payment options including third-party platforms. In addition, is very easy and fast to process transactions from your store domain.
  4. Secure Technology: Luckily enough, Shopify’s all-time managed platform handles all the existing technical details for you.
  5. Built-in product sourcing: it also enhances your store with relatively little to no upfront investment using Shopify’s built-in Dropship and wholesale networks.
  6. Competitive monthly fees: Shopify gives freedom to choose between low monthly fees for entry-level plans and competitive rates for higher plans.
  7. Unlimited growth Potential: Shopify is to some of the most powerful brands online and it is more ready to be of aid to sudden and sustained growth.

Cons of Shopify

  • Pricing: it is costly especially if you are a beginner. There are quite a lot of low-cost Shopify alternatives especially if your operation is on a shoestring budget.
  • Limited Customization: even though the Shopify platform is customizable, it has limitations as it uses Liquid setup software which is hardly fathomable by many web designers. Most other platforms use PHP software.
  • It has fewer search engine optimization (SEO) options: Shopify platform has basic SEO features as opposed to platforms like WordPress.

Bottom Line

Although Shopify has a few shortcomings as has already been discussed in this article, its uses, as well as outstanding features, are incomparable in the world of virtual e-commerce platforms. It has vast selling opportunities as well as core management tools.  Today, it is still one of the most convenient, platforms for startups and power sellers alike. It is simple, has wide sales reach, and boasts of the highest growth potential.

FAQs

Do I need to be a designer or developer to use Shopify?

No, you do not have to be a designer or a developer to use Shopify.

By just signing up for Shopify, you will be able to:

  • Customer the general outward appearance and the feel of your store with the online store builder and themes.
  • Add features and functionality to your store with apps.

Can I use my domain name with Shopify?

Yes, you can use your domain name with Shopify. In case you already have an existing domain name, you can connect it to Shopify from your store’s admin. If you don’t have a domain name yet, you have the option of either buying one from Shopify or a third-party provider.

How good is Shopify’s customer support?

According to the reviews Shopify receives from its customers, it has very competent customers.  For those using the lite or free plan, they enjoy 24/7 access to the service providers through live chat and email support.  Users on one of Shopify’s paid plans have access to 24/7 phone support as well as live chat and email support.

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