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What is Shopify and How Does Shopify Work - A 2023 Guide

Dan Nistor Avatar

Dan Nistor

01 Oct 2022 ● 18 min read

Shopify has been around for many years but has grown a lot since the start of the pandemic. Let's take a look at what Shopify actually is and how can you leverage its features to start a business in 2023.
Home/Blog/What is Shopify and How Does Shopify Work - A 2023 Guide

One of the most popular eCommerce store builders available out there, Shopify sits at the forefront of the digital transformation of brick-and-mortar retailers around the globe, with almost 2.6 million new stores being added to the platform since March 2020.

And it’s not only new merchants who build and launch their online shops on this platform. Many small businesses rely on Shopify to streamline the user experience and cost-effectively scale their operations. At the same time, larger companies leverage the premium Shopify Plus features to handle increased demand, build automated workflows, and boost conversion rates. 

And the reason for that is simple — Shopify offers brands all the key tools and features they need to customise their digital storefronts, create personalised, engaging shopping experiences, and manage multiple sales channels in one place.

Want to know what Shopify could do for your business? Keep reading our in-depth guide as we delve into how Shopify works, the pros and cons of using this eCommerce platform, and how to sell more with Shopify in 2023. 

What is Shopify

What is Shopify?

Shopify is an affordable subscription-based eCommerce platform that allows anyone, regardless of their web design or coding skills, to quickly and effortlessly launch their online stores. By definition, Shopify is intuitive enough to be a favourite among beginners and powerful enough to meet the specific business needs and customisation requirements of top-leading companies. 

That is to say, everyone from your knitting-addicted grandma to popular brands like Kylie Cosmetics, Steve Madden, and Gymshark can build a customised store, process orders, handle payments, manage inventory, and ship products all from Shopify’s platform. 

With mobile-friendly themes, custom domain names, advanced store analytics, and effective multi-channel integrations, Shopify is designed to help merchants hit the ground running and provide frictionless customer interactions as their business grows and retail trends come and go. 

How does Shopify work?

Shopify works as a cloud-based Software-as-a-Service (SaaS) solution that lets you set up, customise, and run your online store from anywhere in the world, provided your internet connection is good enough to handle such operations. 

Regardless of the plan you choose, Shopify’s core product offers you the essential tools you need to build an online business from the ground up. Among Shopify’s out-of-the-box features, you’ll find the following: 

  • easily customisable online storefront 

  • unlimited products and user bandwidth

  • integrated sales channels

  • built-in payment processor

  • abandoned cart recovery 

  • marketing automation capabilities

  • sales analytics dashboard

  • real-time inventory management

  • shipping services

  • 24/7 support

On top of all that, Shopify also comes with a modern POS system, allowing you to sell your products in multiple places — from your digital store to online marketplaces like Amazon or Etsy, social media platforms or brick-and-mortar and pop-up stores. 

Not to mention, with Shopify, you can easily manage every aspect of your omnichannel sales strategy from one single dashboard across multiple devices. 

What can you sell on Shopify?

What to sell on Shopify

Except for restricted items such as gambling products, fireworks, weapons and munitions, drug paraphernalia, and counterfeit/ unauthorised goods (see the complete list here), you can sell a wide variety of physical and digital products on Shopify. 

Here are a few examples of popular product categories you’ll see on this eCommerce platform:

  • Clothing

  • Jewellery & Watches

  • Shoes

  • Beauty 

  • Home & Garden

  • Electronics

  • Pet products

  • Travel & Outdoors

  • Books

  • Pregnancy & Maternity products

  • Handcrafted items

  • Event tickets

  • Courses & Workshops

  • Online services

  • Digital templates

So, can I sell NFTs on Shopify then? 

For now, only US-based Shopify Plus merchants can apply for Shopify’s NFT Beta Program. Therefore, if you find yourself in that group, you’re one step closer to the web 3 version of eCommerce. 

Once accepted into this beta program, you can start selling your NFTs directly through your Shopify store with the help of a minting app partner. Customers who acquire these NFTs will be able to access the exclusive collections, products, and discounts within your online store. 

How to set up your online store and start selling with Shopify

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Whether you’re looking for an eCommerce platform to help you grow your business or want to test the success of your potential online products, Shopify lets you set up your digital store within minutes while providing all the tools you need to sell online. 

Here’s how you can get started with Shopify in 5 easy steps:

1. Sign up for a Shopify account

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First, you’ll need an account. Shopify’s 14-day trial is an excellent opportunity to have a look around, see what the platform can do, test its core functionalities and add-ins, and visualise what your online store would look like — all without having to insert your credit card number.  Nevertheless, keep in mind that you won’t be able to process payments or get customers to your store without a password until you select a paid plan.  

Go to Shopify’s main page, click on the ‘Start free trial’ button, and fill in your email address, password, and store name. The store name you’ve chosen will become your default URL, for example, storename.myshopify.com. But don’t worry about picking the perfect name now, as Shopify allows you to add a custom domain later on. 

After selecting your product category, preferred sales channels, and store location, you’ll be directed to the main dashboard, where the eCommerce magic happens.

2. Add products to your store

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The next step in setting up your store is adding your products. You can do that either by clicking on the ‘Add product’ button on the admin homepage or going to the Products section in the left-side navigation menu. 

Adding a product on Shopify is a pretty straightforward process — you just fill in the product title and description while keeping everything as SEO-friendly as possible, upload attention-grabbing product photos, select pricing details and shipping options, determine the inventory and include product variants if available. 

Once you have more products listed in your store, you can start organising them into collections to improve your customers’ shopping experience. Product collections can be created based on a specific target audience (e.g., products for teens), a product category (e.g., art supplies), or a theme (e.g., New in or Halloween must-haves) from the ‘Collections’ tab.

You can also decide if you want to manually add the products to your collections or automate which product gets in what category based on title, product type, tags, or other conditions. To finish off, make these collections easily accessible on your website by updating your store’s navigation menu. 

3. Choose and customise your theme

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Your store comes with a pre-installed Shopify theme you can start customising straight away. Getting the look and feel of your store to match your brand and products can take some trial and error. So we recommend you first browse through the free and premium mobile-optimised themes available in the Shopify Theme library before selecting your best fit. 

After you choose your theme, you can use the theme editor to make changes to its content and settings and preview the future design of your online store. Since each business has specific needs, you might discover that the selected theme doesn’t have the necessary settings for the features you want to implement. 

In that case, unless you’re confident in your coding skills, customising your theme code can be a daunting challenge. Fortunately, you can leave the task of bringing the sleek, functional eCommerce store of your dreams to life for Shopify experts to handle. 

4. Set up your Shopify domain

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As mentioned before, your Shopify store is going to have a myshopify.com URL by default. 

However, you’ll want to switch to a more professional custom domain to enhance brand visibility and customer trust as your online store grows. 

Shopify lets you add a custom domain from a third-party provider if you already own one or register a new one directly from the dashboard. If you want to get a custom domain from Shopify, all you have to do is click on the ‘Add domain’ button and select the buy option. After you type in your desired domain name, the platform will show you if it’s available and how much it costs.

5. Configure the payment processor

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Shopify comes with a built-in payment processor in the form of Shopify Payments. This payment gateway allows you to seamlessly receive orders and process payments from customers, removing the hassle of having to set up a third-party payment processor and pay costly transaction fees. 

If Shopify Payments doesn’t support your location, you can choose between several other options, including Stripe, Authorize.net, Amazon Pay, Square, and 2Checkout. To set everything up, simply go to the Payments page in the Shopify settings. 

What are the pros and cons of having a Shopify store for your business?

In this section, we’ll explore the benefits and drawbacks of building and managing your online store on Shopify so you can make the best decision for your business. 

Shopify Pros

  • Easy-to-use & scalable eCommerce solution

Shopify is built to be an intuitive, all-in-one solution that optimises your online store’s daily operations and, at the same time, anticipates and supports your business growth and future needs. 

In short, this platform comes with a complete eCommerce toolkit and drag-and-drop online store builder that gives you more control over the look, feel, and functionality of your digital storefront but without the fuss of doing the coding yourself. 

  • Mobile-responsive theme design

Mobile commerce or m-commerce has been gaining traction in the last few years and will continue to do so thanks to emerging technologies such as branded shopping apps, 5G networks, social shopping, and augmented reality (AR) tools. Shopify’s mobile-optimised themes help you capitalise on this trend and create seamless customer experiences for people shopping from their smartphones.

  • Built-in SEO and marketing tools

Shopify’s core features will take your marketing strategy to the next level. The SEO built-in features allow you to edit the title tags, meta descriptions, and URLs for products, collections, blog posts, and store pages. 

Moreover, the platform comes with marketing automation templates, a social media and newsletter campaign dashboard, and strong social media integrations with Pinterest, Instagram, Facebook, Twitter, and even Tumblr.

  • Secure & reliable infrastructure

Data security should always be a top priority for eCommerce businesses as they’re constantly handling sensitive personal and financial information. Plus, as malicious cyber attacks have increased by 600% since the pandemic started, merchants need to make sure that their online stores are not only user-friendly and loading fast but that they’re also secure. 

That’s why all Shopify plans come with a free SSL certificate and PCI-compliant payment processor, helping you protect your customers' information and business data against cyber threats.

  • Powerful third-party app integrations

Your business has specific needs, and those needs require more customisation than a pre-designed theme could offer. That’s where the Shopify App Store comes in. 

What Shopify’s core features can’t cover in terms of functionality, the library of over 7000 free and premium third-party apps is bound to do the trick. You’ll find marketing apps, customer support apps, accounting and reporting apps, shipping and delivery apps, and everything in between.

  • Abandoned cart recovery 

High cart abandonment is a common challenge across multiple industries, amounting to almost an average rate of 70%, according to recent data from the Baymard Institute. 

Shopify’s built-in abandoned cart recovery feature helps you efficiently mitigate this issue and increase your sales performance by enabling you to review abandoned carts and send personalised emails to customers, prompting them to complete their purchases. 

  • AR-powered shopping experiences

Displaying high-quality product images and writing compelling descriptions has been an industry standard for years now. But rapidly shifting customer expectations and digital-first experiences have brought forth the need to go one step further or risk losing your competitive advantage. 

Shopify AR lets you build immersive customer interactions through product pages that support 3D models and videos, thus providing buyers with a better sense of what your products look like in real life. And once your customers’ buying confidence increases, so does their eagerness to click that ‘add to cart’ button. 

  • Excellent customer support

As a Shopify merchant, you get access to 24/7 technical support through email, live chat, or phone to solve any issues you might encounter. At the same time, you can also find solutions to common problems on your own by looking through the comprehensive documentation available in the Shopify Help Center or joining the discussions in Shopify’s community forums.

Shopify Cons

  • Expensive Add-Ons 

While Shopify’s core product covers many of the basic functionalities of a modern eCommerce store, you might sometimes need to add third-party apps to increase the customisation and performance of your website. 

Unfortunately, purchasing these add-ons can increase your monthly fees, which already include the subscription fee, the credit card rates per transaction and other additional third-party fees. We encourage the use of custom code where possible as it can lower your monthly overhead and help you maintain a good Shopify speed score.

  • High third-party transaction fees

Unless you use Shopify Payments, you’ll need to pay costly third-party transaction fees of 0.5% to 2.0% depending on the pricing plan. Third-party transaction fees represent the amount Shopify charges for the integration with external payment providers and the security benefits you get for your processed payments. This additional cost is something you should consider, especially if Shopify’s built-in payment processor is not available in your country.

A quick review of Shopify’s pricing plans

Shopify Plans and Fees

We can’t talk about Shopify without having its pricing plans briefly explained. Let’s start with its three main monthly subscriptions. 

  • Basic

The basic plan is addressed to merchants who’ve just started their business and need an online storefront to sell their products. 

With this plan, you get two staff accounts, unlimited products with inventory management for up to 4 locations, sales channels, discount codes and gift cards, marketing automation, and abandoned cart recovery. The main downside is that the credit card fees (2.9% + 30¢) and third-party transaction fees (2%) are pricier compared to the other Shopify plans.

  • Shopify

This plan comes with a lower credit card rate (2.6% + 30¢) and third-party transaction fee (1%) and includes tools that support the growth of small eCommerce businesses. 

On top of the features of the Basic subscription, the Shopify plan also includes up to 5 staff accounts and inventory management covering 5 locations. Moreover, you gain access to professional reports that provide you with critical insights into the performance of your online store and help you spot trends and opportunities. 

  • Shopify Advanced

The Advanced Shopify plan is ideal for medium-sized to large eCommerce companies looking to grow their business and expand their customer base. Although this plan is the most expensive out of Shopify’s subscriptions for standard online stores, it has the lowest credit card payment rate (2.4% + 30¢) and third-party transaction fee (0.5%). 

Compared to the Shopify plan, the Advanced subscription features 15 staff accounts, up to 8 inventory locations, customised reports, powerful eCommerce workflow automation, and third-party calculated shipping rates.

But that’s not all. 

Apart from the three plans above, Shopify also has two other subscriptions — Shopify Lite, which lets you add a buy button to your website and sell in-person via POS Lite, and Shopify Plus, which provides enterprise-level functionality for large retailers. 

  • Shopify Lite ($9.00 USD/month)

Although it doesn’t allow you to build an online store, this Shopify plan includes basic eCommerce features such as product and inventory management for one location, gift cards, financial reports, social selling tools, and buy buttons that integrate with WordPress, Squarespace, and Tumblr, among others. 

  • Shopify Plus (from $2.000 USD/month)

Shopify Plus provides you with all the tools and services you need to efficiently run a large eCommerce company — unlimited staff accounts, a dedicated support team, superfast checkouts with Shop Pay, automated workflows and campaigns, more access to Shopify’s proprietary theme language, and improved global audience reach with unlimited stores in multiple languages and currencies.

Optimise your online store for business growth with Shopify web development solutions

Although Shopify is one of the top eCommerce store builders out there, it’s not perfect. That’s why building and customising an online store on your own can oftentimes prove time-consuming and require expert coding skills. 

A Shopify web development partner like Vevol Media can help you get your products online faster and improve user experience and conversion rates so you can focus on growing your business. We help our clients design, develop, and optimise their Shopify and Shopify Plus stores to fit their brand identity and streamline their sales strategy.

Whether you’re looking to build a new online store, migrate from another eCommerce platform, or require more customisation on your website, our experts are ready to help you get the most out of Shopify. 

Get to know us better by checking out our portfolio to see what Shopify websites we’ve been working on lately or schedule a call to discuss your eCommerce project.

Shopify FAQ

  • What is Shopify used for?

Shopify is a beginner-friendly eCommerce platform that allows you to effortlessly build and design your online store and sell products on your website, online marketplaces, social media, pop-up stores, and brick-and-mortar locations from one place. 

  • Is selling on Shopify profitable?

With the shift from brick-and-mortar to eCommerce being accelerated by the pandemic, selling on Shopify represents an excellent opportunity for merchants to increase both their revenues and their customer base. According to Shopify’s Future of Ecommerce report, global eCommerce sales are expected to rise up to $5 trillion in 2022. 

  • Is Shopify good for SEO?

Shopify makes optimising your on-page SEO a painless process — editing the meta tags and URLs for your shop’s pages and products can be done without having to touch one line of code. 

Moreover, Shopify’s eCommerce store builder comes with a built-in Google Analytics integration, product structured data, XML sitemap generator, and numerous SEO plugins, helping your online store rank higher in search results and attract more customers.

  • What’s the difference between Shopify and Shopify Plus?

Shopify Plus is the enterprise version of the standard Shopify plan, starting at $2,000 per month. If you’re a large eCommerce business generating millions in sales annually, Shopify Plus can help you boost your store’s functionality with advanced omnichannel analytics, personalised checkout experiences, time-saving sales automation tools, and increased theme customisation through direct access to Liquid, Shopify’s theme language. 

Moreover, Shopify Plus comes with a headless architecture. Headless Shopify gives you complete control over the customisation of your store’s front end and allows you to build seamless eCommerce shopping experiences with powerful frameworks like Hydrogen or Gatsby. 

  • How does Shopify Plus work?

Shopify Plus empowers enterprise-level eCommerce brands to scale their operations through more robust customisation options and technical support. As part of the Shopify Plus monthly plan, you are assigned an Account Manager who helps you optimise your shop and leverage the features of this platform to the fullest. 

On top of that, you get access to exclusive Shopify tools such as Shopify Pay and Shopify Flow that help you streamline the checkout process and automate inventory operations.

Got questions? Contact us today!

About the author

Dan Nistor Avatar

Dan Nistor

Dan follows his passion for technology and eCommerce as a co-founder at Vevol Media. With a background in commerce and marketing, he decided to take advantage of his skills and today he is on a mission to help brands succeed in a competitive digital era.

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