What is Shopify and How Does it Work

Shopify is one of the most popular platforms to sell online. It can help you create an online store quickly and easily. But what is Shopify, how does it work, or is Shopify good for your business?

We will explore everything you should know before opening your Shopify online store.

What is Shopify?

Shopify is an eCommerce platform that helps businesses run their online stores. It offers an excellent alternative to opening brick-and-mortar stores to reach customers on a global level. It enables you to increase both your sales and reach without experiencing the growing pains that come with outlet expansion.

How Does Shopify Work?

Shopify is an easy-to-use application to start selling online. It also comes with a Point Of Sale (POS) app for payment of goods in physical locations.

Shopify offers merchants the ability to create a multi-channel experience that helps showcase the brand. With this subscription-based platform, you can create a website and use their shopping cart solution to sell, ship, and manage your products.

The Shopify eCommerce platform comes with a range of tools that help you analyze every aspect of your online store. With these tools, users can design customized online experiences for customers and maximize the Return on Investment (ROI) on their marketing spending.

The technology also helps cut costs across the board by automating customer relationship management, inventory management, transactions, and more.

Is Shopify Good for Small Businesses?

Shopify comes with a full suite of features that helps you launch and manage your online store. And it doesn’t require any coding for users to start using it and requires no software installation or hosting services. So whether you sell crafts online or want to start a large dropshipping enterprise, the platform can work for your needs.

What’s more, Shopify is also cost-effective with plans ranging from $29 to $299/month. Plus, there are no additional transaction fees if you use Shopify Payments.

The basic plan comes with features that include:

• Abandoned cart recovery, gift cards
• Discount creation
• Fraud analysis

Shopify starter plan also offers the ability to sell in a whopping 133 currencies. Also, you can easily assign inventory to retail stores, warehouses, or other locations you store products. Shopify is best known for its ease of use and modern web design feature.

Additional perks include the ability to include unlimited products and a custom domain. What’s more, Shopify Payment lets you accept credit cards (in addition to PayPal payments) without setting up a third-party payment gateway, customer support, and more.

Additional plans are also available if you need more users and advanced features for growing businesses which is good news if you are experiencing growth.

In addition to the above features, Shopify also enables online retailers to sell on social media such as Facebook, generate reports and analytics, and even offer mobile access.

What is Shopify Used for?

The Shopify platform is one of the most popular eCommerce platforms, allowing business owners to set up their online stores quickly and effortlessly. The web-based platform, Shopify offers everything eCommerce shop owners require to succeed.

Here is what Shopify allows you to do:

Launch Your Own Online Store

With Shopify, you can easily set up your online store with minimal technical knowledge or experience.

From web hosting to integrated payment processing to shipping, the platform makes creating a fully functional eCommerce website easy.

On the Shopify theme store, you can find various customizable Shopify themes that allow you to create a unique look and feel for your online store.

Do Inventory Management Easily

Shopify allows you to manage your products and inventory, including adding, editing, and deleting products, setting pricing, and managing stock levels.

Process Payments Quickly

A great thing about Shopify is you can quickly process payments. You can integrate leading payment gateways to accept customer payments using multiple payment methods, including Apple Pay, PayPal, credit cards, and others.

Manage Orders

With Shopify, you can easily manage customer orders, process payments, track shipments, and issue refunds.

Check Finance

Shopify sellers can check critical financial information about their businesses easily. So if you want an overview of your sales, payments, pending sales data, or full finance reports, the Shopify platform is the way to go.

Grow Your eCommerce Business

The platform offers a wide range of marketing and sales features to help Shopify online stores grow their businesses.

From email marketing to social media integration to discounts and promotions, you have multiple tools at your disposal to grow your eCommerce sales. You can check the Shopify app store to find the right apps to build your business.

Pros of Shopify

Shopify comes with a set of tools that helps ease your e-commerce efforts. Besides creating additional revenue and accessing more customers for your business through online sales, it also offers the following benefits.

Ease of Use

Shopify helps you sell goods or services with a minimal amount of configuration. It comes with an intuitive drag-and-drop editor where you can edit the look of your online store homepage without the need for any coding.

Plus, it offers a good alternative for those who want a complete solution, with no technicalities related to site development and hosting.

If you want more control over the look and feel of your homepage, you have the option to edit your site using code as well.

Mobile-Friendly Designs for Your Online Store

The benefits of having an online store are that it allows for a rapid buying/selling process and ease in terms of finding the best product for customers.

Online stores operate 24/7, allowing customers to get online any time of the day and buy products and services. This has led to more and more customers moving from the traditional brick-and-mortar store to buying goods and services on the Internet.

Shopify comes with a mobile-friendly design that helps customers use their mobile devices to shop at your e-commerce store. Shopify’s mobile responsive themes help draw more customers to your store from the palm of their hands. Installing the Shopify app lets you log in to your account and start running your store from your mobile device.

Shopify’s app runs both on iPhone and Android devices.

Excellent Shopify Support

With Shopify’s e-commerce platform, you get round-the-clock customer support.

Support comes from experts available 24/7 through email, live chat, or phone to help resolve any issues.

Through Shopify Learn, you get access to free tutorials, online courses, and webinars to get a better understanding of online sales.

Ability to Use Your Own Domain Name

With Shopify, you can use your domain name and connect it to the platform from your Shopify admin. In case you don’t have a domain name, you can either buy a domain name through Shopify or a third-party provider.

Social Media Integration

With Shopify, you can sell not only on the web but through social media, online marketplaces, brick-and-mortar locations, and pop-up shops. To boost your marketing and sales, you can integrate Shopify with Facebook and Instagram to reach your target audience as well. This makes Shopify one of the most popular social media business ideas today.

Amazing Themes

With Shopify, you can customize or build the look and feel of your store by changing the website theme to suit your branding needs. Shopify’s Theme Store offers a collection of over 70 premium and free e-commerce templates.

Among Shopify’s best selling points is the availability of high-quality visual Shopify themes. Shopify offers diverse shop templates, of which a number of them are available for free. The templates are compatible with products, clothing and fashion, electronics, art, and other types of e-commerce sites.

These themes can be tweaked without requiring HTML or CSS knowledge and allow you to upload logos, change fonts, colors, and more. Users can also customize the layout of their homepage, add banners, slideshows, and more.

Dropshipper Friendly

Shopify touts to provide users with a lower-risk approach to start dropshipping. If you’re unfamiliar with this concept, consider taking a dropshipping course or reading more about What is Shopify dropshipping?

Simply put, Shopify dropshipping lets you sell products by using a supplier that holds the inventory and ships the product for you. Through it, you can find a product to sell, find a dropshipping supplier, build your e-commerce store, upload your products onto your site, and launch and start marketing your dropshipping store.

Cons of Shopify

Like any application, Shopify can fall short in some aspects. For example, Shopify charges a monthly fee to use the platform while open source solutions are free to download, some of the cons of Shopify may include:

Theme Customization Challenges

The most common type of Shopify theme issue is probably compatibility with HTML, CSS, or JavaScript code.

Often these issues relate to how different browsers, operating systems, and devices display your Shopify theme’s design and layout.

Transaction Fees

Although most shopping carts have dropped their transaction fees entirely over the years, Shopify has retained its 0.5% to 2.0% fees transaction fees. Users, however, have the option to have Shopify waive these fees when you accept payments through Shopify Payments.

Expensive Add Ons

Though Shopify offers almost every basic feature, it does lack many advanced features that e-commerce businesses might need.

To get these advanced features, you will need to purchase add-ons. In some cases, the cost of add-ons can significantly increase your monthly subscription fees.

Content Management Issues

Some issues related to content management when it comes to Shopify include the inability to edit tag pages; duplicate content; duplicate page titles; forced URL structure; and limits on page titles and meta descriptions.

Shopify Pricing

Shopify has something to offer for businesses of all stages and sizes. Shopify offers multiple plans: Basic, Shopify, Advanced, Starter, and Shopify Plus.

Though pricing is an essential aspect of any service, it is important to consider what solutions you need the most and which might not apply to you. The different Shopify plans on offer bring with them different features and abilities.

Shopify also offers a 14-day free trial for you to try out a Shopify account and see if the platform is the right fit for you.

Shopify Starter 

This plan comes with a budget-conscious monthly subscription of $5. With this plan, you can sell products through WhatsApp, SMS, email, social media, and more. It has essential features like a simple storefront, checkout, inbox, product pages, Linkpop, Shopify order management & integrated fulfillment network, and more.

Shopify Starter plan is ideal for businesses who want to test their business idea of selling online without opening a fully-functional eCommerce website.

Basic Shopify

This plan starts with a monthly subscription of $29 per month (if billed annually) and is ideal for businesses trying to build an online storefront.

It comes with basic e-commerce functionality. With this plan, you get to include two staff accounts, 24/7 support, unlimited products, an online store with a blog, and sales channels.

You also get a free SSL certificate, discount codes, manual order creation, and abandoned cart recovery. The downside is that if your products are expensive, there is a 2% transaction fee.

Shopify Plan

Shopify’s standard pricing plan is available for $79 per month (if billed annually) and is touted to offer everything you need for growing an eCommerce business.

It comes with everything you get in your Basic Shopify plan, including gift cards, professional reports, and five staff accounts. With this plan, you can add unlimited products with the abandoned cart recovery tool, which is a huge selling point.

With the abandoned cart tool, you can send automated emails based on your preferences. Transaction fees for this plan are set at 1% when not using Shopify payments.

Shopify Plus

Shopify Plus offers you all the tools needed to run a large operation. This plan comes with a whopping $2,000 monthly fee in exchange for whatever additional features you need.

Unlike other plans, this plan offers tailored-made solutions to your particular business model. Shopify advertises that you can get up to 18% higher conversion with Shop Pay and a 60% faster checkout.

You also get AR, video, and 3D media on product pages, along with localized shopping experiences with multiple stores, currencies, and languages, for B2B and direct to customers.

Additionally, you can customize your checkout, offer advanced discounts and shipping rates, and get unlimited transactions, products, and 99.99% uptime.

Advanced Shopify Plan

The Advanced Shopify Plan is designed for medium to large online businesses for a monthly subscription of $299 (billed annually). This plan comes with shipping, rock-bottom transaction fees, and more advanced reporting.

Also, the advanced plan offers users the ability to create custom reports that include reports on your at-risk and loyal customers. You also get unlimited product uploads, and your transaction percentage fees go down a bit when using external payment gateways.

You can upload as many products as you want, post as many videos and images as needed, and bring in all the traffic you require. Abandoned cart recovery also comes with this plan, which ensures you can reach those sales numbers that make the increased plan pricing worthwhile.

Transaction fees when not using Shopify payments for this plan are set at 0.5 %.

Taxes

As a business, you might need to charge taxes on your sales and then report and remit those taxes to the government.

Bear in mind that tax laws and regulations can be somewhat complex and can change often. In this regard, Shopify can be set to automatically handle the most common sales tax calculations.

You also have the option to set up tax overrides to address unique tax laws and situations.

Shopify doesn’t file or remit your sales taxes for you. This means you will need to register your business with your local or federal tax authority to handle your sales tax. The calculations and reports that Shopify provides can help make things easier when it’s time to file and pay your taxes.

How to Grow Your Shopify Business

Shopify has you covered when it comes to building your online store; however, having a web presence is only the beginning.

You will need to attract customers, promote your products, and offer excellent customer service to make sure you remain competitive. There’s no single sure-shot formula to guarantee the success of your online store.

However, there are some great tips that can raise your chances of success. Here are some tips to grow your online store.

Test Your Mobile Settings

Let’s face it, mobile devices are the new online frontier when it comes to online sales. Devices like tablets and smartphones are now the number one go-to devices for Internet browsing and purchasing. If you want to succeed in the online market, ensure your online store is mobile-responsive for maximum success.

Optimize for SEO

You will need to optimize your web store for SEO in order to drive more traffic to your store.

Your store’s online traffic will mostly come from search engines like Google. As such, you will need to rank high among your competition.

Ranking high in search engines can get you more daily traffic and is a cheaper form of capturing customers through search engines versus paid advertising.

Use High-quality Photos

The quality of images in your store impacts your brand image. If all the images on your eCommerce store are top-quality, your audience will perceive your store as more professional.

So always use high-quality images for products, social media, Instagram, or Pinterest.

Create Some Ads

To harness the power of online selling, you will need to effectively and efficiently reach your target audience.

You can run ads on Facebook, Google, Instagram, and other social networks. To be effective, however, you will need to identify the platform where your audience spends the most time and the media that are best for your niche.

You cannot overlook the benefits of online advertising for your business to deliver relevant, personalized, and timely messages to your customers. You can use paid media to target the right market but watch out for mounting costs.

Add Positive Reviews to Your Site

Social proof comes in handy when customers are on the fence about buying your products. Good reviews and star ratings help shoppers shortcut their research and make decisions faster and with greater confidence.

A positive reputation by way of reviews on your products and services positively impacts your sales.

Encourage customers to write reviews of your product and services to help garner that much-needed third-party validation. Good reviews can boost sales because consumers actually go through customer reviews—even those written by strangers.

Also, you should make a practice of regularly responding to reviews your customers leave. Try to address the grievances of your customers proactively to let them feel that you care for your audience.

Use Social Media to Give Your Sales a Boost

You can use social media to create a relatable brand for customers to support.

Social media allow your business to connect with customers, leading to a direct increase in sales and interactions with your brand. You can integrate your Shopify store with your blog and social media accounts, including Facebook, Instagram, and Pinterest.

The key to success is to understand you need to be consistent with social media if you want to gain a bigger online presence. The more you engage your target audience, the more loyal they will be, and the more your followers will grow.

Shopify enables you to grow your audience across 100+ social media channels and 80+ online marketplaces. And the best part is you can manage your products from one place.

Put Shipping Tracking on Auto

By offering shipping tracking, you not only provide real-time updates on the status of the delivery but more importantly peace of mind that your delivery is en route.

One of the main advantages of investing in a shipment tracking system is that you can greatly lower your logistics costs. Shipment tracking can help you reduce your expenses, as it allows both you and your customers to gain better insights into the status of a package.

Add Blog Posts

You can add blogs to your online store to provide customers with information and updates on your products and services.

Your blog posts can also drive traffic to your site by boosting your store’s SEO, converting visitors into customers, and increasing customer engagement.

Unlike investing in ads that could impact your bottom line with content marketing, you can drive free organic traffic to your store.

Ideally, you should create and share helpful content on your blog to help your audience make informed decisions. How-to guides, product comparison guides, and gift guides are some blog post ideas for your Shopify blog.

You should also think about writing guest posts on relevant websites to increase your brand exposure.

Offer Free Shipping

Free shipping is a powerful tool to sway your audience’s mind into buying. If you don’t incorporate free shipping, you may lose tons of leads to your customers. This is because 68% of US customers don’t buy things online for at least half of the time if the retailers don’t offer free shipping.

If you’re not in the position to offer a no-string attached free shopping policy, you can opt for conditional free shipping. For example, customers can avail of free shopping if the cart reaches a certain (or more). Conditional free shipping is also an excellent strategy to increase average order value (AOV).

In addition to free shipping, you should also offer an easy-to-return policy to delight your customers. As 52% of customers don’t purchase online, fearing a difficult return policy, having an easy-to-return policy can help you increase your sales.

Use Upselling and Cross-Selling Techniques

Though two different tactics, cross-selling and upselling work in tandem to grow your store’s revenue.

Cross-selling persuades shoppers to buy complementary products, and upselling persuades them to upgrade their purchases.

For example, someone is interested in buying a coffee maker from you. Persuading them to buy coffee powder from your store would be cross-selling. And encouraging the shopper to buy a higher model of a coffee machine than the model they have already added would be upselling.

Cross-selling and upselling are often done by showing related products to the shopper.

Run Email Marketing Campaigns

Email marketing is the most effective tool to reach your target audience.

Plus, it is cheaper than other marketing avenues, like paid ads. And return on investment for email marketing is excellent. For every dollar you spend on email marketing, you will receive $42 in return.

Shopify makes it easy to leverage email marketing for small business owners. With Shopify Email, you can:

• Create branded emails easily
• Use a pre-built template that can automatically fetch products, pricing, and branding from your store
• Automate email campaigns quickly
• Manage and track all email campaigns in one place

The best part of Shopify Email is that you can send 10,000 emails (manual or automated) each month. After that, you just have to pay $1 per 1000 additional emails.

Shopify Email is available for all Shopify plans.

Take a Shopify Course

When you start selling on Shopify, you may not know all the things required to succeed. So taking a Shopify course can help you learn about how exactly Shopify works, SEO strategies to grow your business, and marketing strategies can set you on the path to success and increase your online retail sales.

The good news is Shopify has a rich library of learning resources to help you succeed. In these courses, you can learn a wide range of skills, from email marketing to SEO to Facebook ads.

And the best part is it does not cost you much to access these courses. Select a plan starting at $9 per month, and you can access these courses for free.

Shopify Collabs

To boost the success of your Shopify store, you have to increase the reach of the store. And collaborating with creators, influencers, and other brands is one way to do it.

With Shopify Collabs, you connect to an active community of creators, influencers, affiliates, and brands. You have to set up your profile and connect with brands or influencers that are in line with your products/services.

Shopify Alternatives

If you find Shopify costs higher, you can pick another alternative to start selling online.

The most important thing to look for when shopping for an e-commerce website builder or platform is that it lets you build, customize, and run an online store.

Most platforms in the market come with tools to help walk you through the entire process of setting up your e-commerce venture.

They will also offer help in navigating through the steps involved, such as hosting, design, pricing and payment options, marketing tools, and reports. Below are some of the Shopify alternatives:

Woo Commerce

Woo Commerce is a customizable, open-source eCommerce platform built on WordPress.

You can add the WooCommerce plugin to any WordPress site and set up a new store in minutes. You can even add features and extend the functionality of your online store with official extensions from the WooCommerce Marketplace.

This online selling platform is easy to use for both vendors and customers. It comes with free features that offer complex coupon campaigns, product and inventory management, order management, sales reports, a customer account area, control over shipping and tax charges, and more.

You can also manage your online store on the go through WooComemrce’s mobile app.

Wiz Ecommerce

Wiz eCommerce is a multipurpose WordPress WooCommerce theme. Wiz’s theme is suitable for any kind of eCommerce store, is fully responsive, and is lightweight.

You can tweak your landing page to your heart’s content, including the color scheme, social icons, scroll-to-top, custom background, and other features.

Wix

Wix is a cloud-based web development platform that offers lots of flexibility to customize whatever you want to do with your eCommerce store.

You can use it to promote your online business or showcase using Wix’s website builder. Its unstructured editor lets you drag and drop elements anywhere you want on a page and packs tools like restaurant ordering, music distribution, appointment scheduling, and more.

When it comes to themes, you will not run out of options as it offers more than 500 themes.

Squarespace

Squarespace is yet another alternative to Shopify for small businesses. It offers some great templates that can help your business to draw attention to your products, and are also easy to customize.

It lets you explore which tools you want to add to your online business —whether it’s setting up an online store, booking services, or adding third-party extensions.

Additional tools under its hood include an inventory system and analytical tools. To market your business, it comes with built-in Search Engine Optimization (SEO) features, on-brand email campaigns, and social tools. These features make it easy to retain customers and grow your audience.

When it comes to Shopify Vs Squarespace, both offer free trial periods. So you can compare the features and user experience for yourself.

Is Shopify legit?

Yes, Shopify is legit. With Shopify, you can start your eCommerce business and manage it from anywhere, with no coding or design skills needed.

With it, you can sell products and services, add customer reviews, improve email marketing, publish your products on Facebook, or get in-depth analytics.

Shopify comes with a selection of free themes that can be loaded onto your store automatically, where you can start customizing any way you want.

You can choose free fonts or up the color scheme, add your own photos, arrange sections, and more. This makes Shopify ideal for beginners wanting to dive in or play around with the feel and look of their online store.

Shopify doesn’t limit the number of products you can offer in any way. You can sell unlimited products on all Shopify plans. It allows you to sell both online with your own website and/or in person with its Shopify POS system.

Shopify’s online store builder has features for everyone from novices to experts. There’s plenty of functionality that comes with this platform that can help you convert website visitors into buyers and one-time shoppers into loyal customers.

The Bottom Line

Shopify has established itself as one of the leading e-commerce platforms. It makes it easier than ever for businesses to start selling on Shopify.

The comprehensive suite of features offered by Shopify enables Shopify merchants to easily manage their stores, listing products and managing orders alike. On the Shopify dashboard, you can find the most valuable metrics that provide you with insight into the performance of your store and the behavior of your customers.

What are you waiting for? Register for a free trial of Shopify to check how this ever-popular e-commerce platform can help you start selling online.

Can I use Shopify on my phone?

Yes, You can use Shopify on your phone. By installing the Shopify app, you can log in to your account and run your online store from your mobile device. Your staff can also log in to the Shopify app, but they will have limited access. They can only view the areas of the Shopify app that they have permission for. But with the right access, they can review orders, products, and customers.

What is Shopify Plus?

Simply put Shopify Plus is a more robust version of the core Shopify plan and includes the following:

A dedicated account manager: Unlike getting support through phone, email, and live chat Shopify Plus offers personalized and dedicated support to your store.

It assigns what it calls a Launch Engineer to your website to help you navigate any obstacles that may arise during your store’s setup or migration stages.

The Launch Engineer is on standby to help you iron out third-party integrations or find partners to work on projects specifically targeting your business.

More theme customization and access to Liquid: With Shopify’s standard plans, you can only customize your Shopify theme using the editor, and can be challenging to switch to a completely new theme.

However, Shopify Plus comes with a higher degree of flexibility in terms of customization, as you can access Shopify’s theme language, Liquid.

With Liquid, you can make changes at the code level and also have greater control.

Unlimited staff accounts: Shopify’s basic plan only allows a few limited staff accounts while Shopify Plus allows you to add unlimited staff accounts and additional permission settings.

More control over the checkout: Shopify Plus lets you offer clients personalized offers to high-spending customers. You can also customize the checkout experience based on shopping cart values or any other condition.

More API integrations: You also get more Application Programming Interface for your website to facilitate integrations with third-party apps such as GiftCard, User, and Multipass.

Exclusive apps: You also get access to some top-end exclusive Shopify apps that are not available to regular Shopify users.

What is Shopify Lite?

The Shopify Lite plan allows you to create a simple e-commerce store within a few minutes. For just a $9 monthly subscription, Shopify Lite can help integrate e-commerce into your website or social media page, including a blog and Facebook.

You can merge your store with your current Facebook Business page by simply adding a Shop tab on the page while also displaying product galleries along with your own shopping cart inside Facebook. Besides getting an integrated Facebook store, you also get a live chat module powered by the Facebook Messenger app.

In addition to selling on Facebook and blogs, the ‘Shopify Buy button’ is the prominent main draw for Shopify Lite. This plan gives you the ability to provide embeddable modules for products and collections. You can also embed a shopping cart and customize each module for your brand.

Note: Shopify Lite is not available to new merchants. So new merchants can try the Shopify Starter plan.

Can I choose my own domain name with Shopify?

If you buy a domain through Shopify, your domain will automatically be configured to work with your primary domain. Usually, your primary domain has the format’ ***.myshopify.com‘ when you sign up for Shopify. If you want to change the domain that’s displayed to customers while they browse your online store, then you can add a custom URL, such as www.****.com.

Alternatively, if you already own a custom domain from a third-party provider, then you can use a domain that you already own. You can either connect your custom domain to your online store or have the option to transfer management of the domain to Shopify.

Is Shopify good for beginners?

Yes, Shopify is widely considered to be beginner-friendly. It is an easy-to-use platform that lets users quickly set up an online storefront without learning complicated coding languages or having a deep understanding of web design.

What’s more, Shopify offers a range of easy-to-customizable themes. With a large active community of Shopify users, you can quickly get support and guidance whenever you are stuck.

The platform includes all of the tools and features needed to run an online store, including payment gateway integrations, shipping and tax options, and inventory management. So once you choose what to sell on Shopify, it’s easy to get up and running quickly.

So without any doubt, Shopify is an excellent choice for beginners to start selling online without having any coding or designing knowledge.

Can I pause my Shopify subscription?

Yes, if your store is eligible, you can pause your Shopify subscription.

To be eligible for this feature, your Shopify store should be on a paid plan, past the free trial. In case your Shopify store doesn’t meet these criteria, you cannot pause your Shopify subscription.

Eligible owners of Shopify stores should go to their Shopify admin panels and select Pause and Build.

Is Shopify better than Amazon?

It is difficult to say which platform scores more in Shopify vs. Amazon comparison. This is because both platforms serve different purposes.

Shopify is an e-commerce platform enabling you to build your own online e-commerce website and start selling online. On the other hand, Amazon is the biggest online marketplace that allows you to list and sell your products online.

The better platform between Shopify and Amazon is the one that aligns with your business goals.

Image: Depositphotos

This article, "What is Shopify and How Does it Work" was first published on Small Business Trends