What Is Shopify and How Does It Work?

Shopify can be good for small businesses that want an easy way to start selling and accepting payments online.
Tina OremNov 22, 2021

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What is Shopify?

Shopify is a popular online e-commerce platform that small businesses can use to build online stores to sell products on websites or via social media. The company also sells point-of-sale, or POS, software that small businesses can use in their brick-and-mortar stores.

Shopify has several add-ons that can help you do more. Notable add-ons include Shopify Payments, which are used to accept credit cards; Shopify Shipping, which generates shipping labels and discounts on shipping; and Shopify Markets, which lets businesses sell internationally. Those add-ons can generate additional fees.

How does Shopify work?

Shopify can help a small business get an online storefront up and operating fairly quickly. Here’s an overview of how Shopify works:

  • Build your store. Shopify has more than 70 store themes to choose from, and there are drag-and-drop capabilities to make things easier. You customize the colors, images and fonts. The site you build also automatically works on mobile. You can list an unlimited number of products.

  • Set up your payments. You can accept credit cards from customers using Shopify Payments, which is a separate service that allows you to accept payments.

  • Add a Buy button. You can embed a product card and checkout on a social media platform or other website.

  • Sell through multiple sales channels. You don’t have to sell your products just on your own website. You can use Shopify to list products on Google, eBay, Walmart, TikTok, Pinterest, Facebook, Instagram and other sites.

  • Set up the POS side if you have a brick-and-mortar business. You can learn more about Shopify POS here.

  • Track your business. Shopify has a dashboard that displays reports, analytics and other information on desktop and mobile. You can manage things from the Shopify Mobile app as well, including uploading product photos, setting pricing, dealing with refunds, seeing sales and visitor traffic, getting order notifications and communicating with your staff. The Shopify dashboard is available in Chinese, Czech, Danish, Dutch, English, Finnish, French, German, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Spanish, Swedish, Thai, Turkish and Vietnamese.

Shopify dashboard

Shopify provides 24/7 support via email, chat and phone. The company also maintains community forums that can be useful for asking questions, as well as a library of user guides and tutorials and a network of experts to consult.

Shopify support

How much does Shopify cost?

There are three plans: Basic Shopify, Shopify and Advanced Shopify. Shopify has a free 14-day trial, and it doesn’t require a credit card.

Plan

Basic Shopify

Shopify

Advanced Shopify

Monthly price

$29

$79

$299

People who can access admin and POS

2

5

15

Inventory locations

up to 4

up to 5

up to 8

Reports

No

Standard

Advanced

No matter which of the three Shopify packages you choose, you can create manual orders, support discount codes, get a free SSL certificate, recover abandoned carts and accept gift cards. Shopify also offers an enterprise version of its platform, called Shopify Plus. You can learn more about it here.

See how Shopify compares to these other e-commerce platform options:

Who uses Shopify?

Since most of its unique features are primarily relevant to online sales, Shopify is best suited for business owners who do most or all of their business online.

Also, if your business model particularly benefits from customers making frequent repeat purchases, Shopify’s add-on features could make those purchases easier and faster for them, which could boost customer loyalty and reduce the number of abandoned carts.

However, Shopify doesn’t work with some types of businesses, such as:

  • Investment, credit, money or legal services.

  • Virtual currency services.

  • Adult content.

  • Gambling.

  • Drug paraphernalia.

  • Psychic services.

  • Travel services.

  • Phone services.

  • Extended warranties.

  • Multilevel marketing.

  • Products that make unverified health claims.

  • Cannabis, tobacco, e-cigarettes and online pharmacies.

  • Fireworks.