What Is Shopify and How Does It Work?

Shopify is an e-commerce platform that helps you start an online store, manage payments, and monitor your business growth. In Q2 of 2024, Shopify reported total revenue of $2 billion, an increase of 21 percent from Q1 [1]. Additionally, e-commerce sales in the United States reached $289.2 billion in the first quarter of 2024 [2].

Since Shopify is cloud-based, you can use the Shopify app to monitor your store, transactions, inventory, and more from anywhere, as long as you have an internet connection. Shopify offers simple plans to get you started but has many services to customize your store to fit your business, including custom storefronts, third-party apps, and even Shopify experts who can build custom solutions. Once you have your products, sales, and operational tasks in place on Shopify, you can then grow your products and sales options. 

How does it work? 

Shopify functions as an e-commerce site where you can sell products. The company helps you set up an attractive site and offers a point of sale (POS) automatically when you set up your site. This allows you to accept full or partial payments, credit or debit cards, and gift cards. If you have a brick-and-mortar store, you can combine your transactions in your physical store with your online store using Shopify’s POS system, integrating your physical store into your digital store. 

This makes it easy for small businesses to track sales, inventory, marketing, payments, and more, all from one uniform place. In addition to offering free, customizable templates, Shopify handles security and has experts to answer your questions. Shopify also makes it easy for shoppers to find your store online by using the site’s built-in features. 

What is Shopify pricing?

Shopify offers various plans to meet your business's needs and scale, ranging from $29 per month for the Basic plan to $2,300 per month for the Shopify Plus services [3]. 

Find a Shopify plan that suits your businesses, with September 2024 pricing [3].

Shopify Starter

In addition to its Basic plans, Shopify offers an alternative plan for smaller businesses. The Shopify Starter plan costs $5 per month and may be helpful if you are new to selling online [3]. This option is best for selling through social media, SMS, WhatsApp, and anywhere that allows you to share product links. It uses a simple storefront and includes unlimited product pages like the rest of Shopify’s plans. While you cannot create your own store with the Starter plan, you can lead your customers and followers to your page. 

The Shopify Starter plan is a simple solution to selling online without the more in-depth features of the Basic plan. It is excellent for testing a product on the market and getting a taste of Shopify’s other plans before upgrading. The Starter plan is useful for sellers, such as bloggers and influencers, who already have an online audience to directly link to product pages on their Shopify store. With this plan, customers also get a fast and secure checkout and a contact page for inquiries.

Shopify Plus

Shopify Plus is an enterprise solution for larger businesses looking to take the next step in making more sales and retaining customers. By unifying additional tools into one place, Shopify Plus allows you to get a great return on ad spend while targeting customers looking for your product. It allows you to integrate even more apps into one place, such as Microsoft, QuickBooks, and Shopify POS. Plus, you can monitor many different Shopify stores all from one place. 

Shopify Plus is customizable, so you can build your online store with their editor or access the code yourself. You can offer personalized deals, shipping rates, flexible purchase options, and easy payment methods like Shop Pay and digital wallets. The Shopify Plus Plan starts at $2,300 per month [3].

Is Shopify right for you? Pros and cons of using Shopify

With the popularity of e-commerce, Shopify may be right for you as a solution to your online selling needs. This platform provides scalable options, making it equally well-suited for entrepreneurs and larger brands alike. Explore the possible benefits and drawbacks of using Shopify.

Pro: Shopify has a variety of plans.

From the $5-per-month Starter Plan to Shopify Advanced and even Shopify Plus, this e-commerce platform offers a plan for anyone looking to start or expand their reach in the industry. Shopify lets you upgrade your plan at any time so that when you need to grow, the extra features are already there. 

Con: Shopify charges payment processing fees.

Although its free three-day trial and low-cost starting plans make Shopify relatively affordable, the monthly fee isn’t the only cost consideration to factor into your budget. Shopify also charges transaction and processing fees. Fees vary according to your plan. Fees can include a domain name as well as premium themes and apps. Be sure to factor them into your total costs for using the e-commerce platform.

Pro: Shopify integrates e-commerce.

The core of Shopify is to consolidate the many factors that go into online selling, including marketing, payments, and shipping, all into one place. Shopify integrates these facets of e-commerce and even allows you to integrate your favorite third-party apps and choose from Shopify’s built-in apps and features. It’s also easy to set up and manage, which is why so many online sellers prefer it to other options. 

Con: No marketing automation or email hosting

Sellers who want to establish email addresses for their stores need to use third-party email hosting. This service allows you to send forwarded emails. If you have the Basic plan or higher, the requirements for marketing automation include installing the Spotify Flow app to fully access all the functions.

Shopify extends beyond e-commerce

With Shopify POS, you can integrate your brick-and-mortar store with your online store so that all your payments, inventory, marketing, and business analytics are in one place. Shopify POS uses the Shopify app, which makes selling in person just as easy as selling online. If you plan on selling in-person as well as online, this feature makes integration easy. Shopify POS is an additional $89 per month per physical location and is only available with a Basic plan [3]. To incorporate POS, you will need a subscription plan, the installation of the app on both your Shopify store and IOS/Android device, and the POS hardware. 

How to start selling on Shopify

Setting up a Shopify store involves deciding on the right plan and customizing your website. Follow these four steps as you venture into the world of online selling. 

1. Choose the plan that is right for you or your business. 

If you need a place to begin, the Shopify Starter is a great entryway. If you have an established business or need to use Shopify’s extra tools and features, look at their Basic, Shopify, and Advanced plans. You can always try a monthly plan to see if it meets your business's needs and update it if you want more from the site. 

2. Build your website.

For customers to find your products, you will need a website. You can use Shopify’s website builder to make your store functional and full of features. Shopify has built-in themes, drag-and-drop editing, and even the option to use custom coding. Some tips to keep in mind when creating your site include choosing the right theme for what you are selling, ensuring your page loads quickly, including ways for your users to link to your other sites, and keeping your site design clean with enough white space so that your viewers can concentrate on the pictures and photos while scrolling. 

3. Build your storefront.

You can customize your store to fit your brand and sell your products. Select one of its custom themes that load fast and will attract customers to your product. Then, you can offer discounts, build customer relationships, and start selling.

4. Run your business.

Once you are on Shopify’s e-commerce platform, you can use its apps, tools, and features to build and run your business. Shopify has various free business tools to help you make QR codes, shipping labels, and more. With Shopify, you always have room to grow, plus many marketing options to attract customers and build relationships. 

Learn more about Shopify and e-commerce

E-commerce is a great way to offer customers convenient access to purchase items from their computer or mobile device. To increase your e-commerce knowledge and understanding of services like Shopify, consider an online course. For example, you can start by gaining skills with a Professional Certificate, such as the Google Digital Marketing & E-commerce Professional, on Coursera. You’ll learn the basics of digital marketing and e-commerce to build your customer base.