What Is Shopify And How Does It Work (2024 Guide) – Forbes

Published: Feb 12, 2024, 2:26pm
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Shopify is a user-friendly e-commerce platform that helps small businesses build an online store and sell online through one streamlined dashboard. Shopify merchants can build a modern online store and sell on social media sites, seller marketplaces, other blogs and websites and via email, text and chat. In-person selling is a snap on Shopify too, with its built-in point-of-sale (POS) for retail stores, pop-up shops, market sales and more.
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In technical terms, Shopify is a subscription-based software-as-a-service (SaaS) sales platform. Shopify offers users to get started at INR 20 for three months, and opt for any Shopify plan as per their requirements with fees starting at INR 1,499 per month for annual subscription. All standard plans support a branded online store and a full array of in-person and online selling tools.
All plans deliver a full suite of business management tools. Essentials, such as product sourcing, sales and inventory tracking, payment processing, shipping, customer accounts, marketing and reporting, are built into every Shopify plan. Plus, you can expand your Shopify toolkit easily with hundreds of Shopify Apps. Learn more with our Shopify review.
Shopify works by centralizing your product data, customers and operational tasks in one system that connects to all of your sales channels seamlessly. Once the essentials are in place, Shopify makes it easy to explore and expand into new product lines and sales channels.
Here’s a step-by-step look at how Shopify works from initial set-up to managing sales.
You can test drive Shopify risk-free for two weeks. Shopify doesn’t even ask for your credit card upfront.
The account setup wizard connects your initial sales channels, which you can change and expand at any time.
If you want to sell through your social media accounts, you can connect those in the setup wizard too.
Enter item details, pricing and images for products that you make or source yourself or tap into Shopify’s Handshake wholesale network and dropship vendors to find items to sell.
Note that many sellers combine items they make or source themselves with related dropship products to offer a well-rounded collection. Learn more about how to start a dropshipping business.
You can activate Shopify Payments with one click to start accepting payments right away or connect your own payment processor to your dashboard. Shopify supports more than 100 external payment processors. For help choosing the right one, check out the best credit card processing companies.
Under the Settings tab, set up your shipping methods and fees and your applicable sales tax information.
You can start selling now while you build your Shopify online store. With Steps 1 through 5 in place, you’re all set to sell on various social media and marketplace channels, using the Buy Button tool and in-person with the POS card reader.
If you want to sell through your own branded website, your next step is setting up your Shopify online store. Again, Shopify makes this easy with an assortment of plug-and-play themes that require just a bit of setup and added content to make it your own.
As orders roll in, you’ll manage everything within your Shopify dashboard. Shopify’s built-in tools make it easy to set up efficient workflows for managing orders you ship yourself, dropship products and even virtual items like e-books and music downloads. Shopify emails order status and shipment tracking information automatically to your customers too.
Once your setup and workflow essentials are complete, you’re ready to explore Shopify’s sales-driving features like email marketing, abandoned cart remarketing and blogging.
Shopify pricing includes monthly fees based on your subscription plan, plus added fees for payment processing, shipping labels and advanced POS needs.
Each of Shopify’s five online store plans supports unlimited products, orders and customers and provides data security, Payment Card Industry (PCI) compliance, 24/7 support, plus a full range of sales and business management features.
Shopify also offers discounts if you pay in advance—save 10% if you pay annually and 20% if you pay biennially.
You can connect your own payment processor to Shopify or use the built-in Shopify Payments option. If you use your own payment processor, Shopify adds a transaction fee ranging from 0.5% to 2% of the total charge to every online sale. This fee does not apply if you use Shopify Payments.
Shopify Payments offers flat-rate payment processing with rates based on your subscription plan, as shown in the table above. Shopify Payments also supports in-person sales using Shopify’s mobile POS app and retail store POS system.
If you ship orders, you can use Shopify’s built-in shipping label printing on any plan. You’ll enjoy competitive discounted rates on USPS, UPS, DHL and other carriers and your discounts increase on higher-tier plans.
Shipping fees tally each time you process an order and print a shipping label. These costs are charged to your card when charges reach a threshold level based on your average shipping volume. However, if you ship just a few orders each month, shipping charges are added to your monthly Shopify bill.
Shopify’s POS feature enables in-person sales for mobile pop-up shops, market selling, services and even multiple retail store locations. POS-based sales connect with online sales, inventory, customer data and business reporting seamlessly too.
You can use the free POS Lite that’s built into every Shopify plan or add full retail checkout functionality for a monthly fee:
Shopify gives merchants nine free store themes, but many sellers opt for premium Shopify themes with specialty designs, added features and more customization options. Shopify’s theme store has more than 100 premium themes
Shopify supports sales for virtually all types of goods and services, including:
Shopify does have a list of prohibited items that includes alcohol and cigarettes, firearms, explosives, fireworks, live animals and medical devices―to name a few. Shopify will remove these types of items from a subscriber’s product pages and can terminate accounts that don’t meet their seller terms of service.
Shopify’s omnichannel sales reach is extensive. Some sales channels, such as the online store, top social media sites and POS are built into the platform. Other sales channels, such as seller marketplaces, in-app sales and online courses connect via Shopify Apps.
Here’s a snapshot of the many sales channels you can tap into using Shopify:
International marketplaces: Apps including Shopify Markets (worldwide), Rakuten Ichiba (Japan), JD Marketplace (China), IndiaMart (India), My Deal AU (Australia) integrate with Shopify to expand sales into international markets.
Shopify delivers a ton of sales options and business management features, but is it right for you? These pros and cons of using Shopify might help you decide.
Pros of Using Shopify
Shopify is virtually unmatched in the world of ecommerce platforms for ease of use and seamless connections to sales channels. Its few drawbacks, such as simplistic blogging features, limited store customization and basic SEO tools, are overshadowed by Shopify’s extensive selling opportunities and core business management tools. Startups and power sellers alike simply won’t find a platform that beats Shopify for simplicity, sales reach, growth potential and price.
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Yes, Shopify’s account setup wizard leads you through every step so you can be selling within minutes. The online store builder is very user-friendly, and you can even find products to sell through Shopify dropship vendors and its Handshake wholesale marketplace.
Yes, you can sell products that you make directly to customers and offer them at wholesale prices to other Shopify sellers through Shopify’s Handshake marketplace.
Shopify allows merchants to sell anywhere they want and unites all sales, customers, products and business data within a central platform. Many sellers build an online store on Shopify, then add other sales channels such as Facebook, Instagram, Amazon, a brick-and mortar store or in-person mobile sales. However, you can choose to just focus on social media sales, marketplaces like Amazon and Walmart, or combine an online store with pop-up shops.
Shopify gets good reviews for its customer support, which is available two ways. For those using the Shopify Lite, or free, plan, they have access to 24/7 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.
Shopify offers a free, 14-day trial so that users can try out the platform before committing to a purchase.
Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. Additionally, she manages a column at Inc. Magazine.
Krista Fabregas is a seasoned eCommerce and online content pro sharing more than 20 years of hands-on know-how with those looking to launch and grow tech-forward businesses. Her expertise includes eCommerce startups and growth, SMB operations and logistics, website platforms, payment systems, side-gig and affiliate income, and multichannel marketing. Krista holds a bachelor’s degree in English from The University of Texas at Austin and held senior positions at NASA, a Fortune 100 company, and several online startups.
Dipen Pradhan is a Staff Reporter for Forbes Advisor India. He has more than 10 years of experience in journalism. He covers the personal finance beat. When he is not writing, he enjoys documenting the community’s ethnic knowledge, and travels to explore rural hotspots.

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