What Is Shopify and How Does It Work?

If you are running an e-commerce business or a part of commerce, then surely you have heard about Shopify. It is one of the largest and widely popular e-commerce platforms in the world, trusted and used by millions of people. But still, many people do not know what Shopify is and how it works.

Shopify has a user-friendly UI, a vast ecosystem, and various flexible customization options that let businesses build and grow their online stores. It gives users excellent tools for product management, payments, and shipping, making it suitable for a beginner or a seasoned entrepreneur.

In this post, I will help you explore exactly what Shopify is, how it works, and provide a detailed review of its features, pros, and cons to help you decide whether it is the right choice for you.

What Is Shopify?

It is a cloud-based commerce platform that helps users sell their products online and offline. With Shopify, users can create and manage their own online stores and sell physical products, digital products, and even drop-shipped items. The platform has all the necessary tools to help you run an online business, from website designing and product listing to payment processing and inventory management.

It works by providing you with editable website templates, integrated payment processing, sales tools, and a centralized admin panel to manage products and inventory. Business owners need to pay a subscription fee to use the Shopify platform. This subscription includes secure hosting, order management, marketing features, and lots of apps from the Shopify App Store to extend store functionality.

How Shopify works

Shopify works as a centralized hub for your online business, as it handles all the technical aspects of running a store so you can focus more on sales. Its tools and products act as a unified system to help you sell products everywhere.

Build Your Online Store

The platform lets you use its friendly online store editor along with various free and premium themes to build your store in minutes. You can also use its AI feature (Shopify Magic) to develop custom store themes; just tell it about your brand or products, and it will build a perfect theme for you. It has 250+ pre-built business themes with dynamic scrolling and hover effects. This allows you to give a personalized look and feel of your online store to match your brand without writing a line of code.

Add and Manage Your Products

Now, add your products and connect with verified suppliers to sell them. You can source goods with a dropshipping app, design custom products using print-on-demand, or stock self-sustaining brands from the wholesale marketplace. It also lets you import items into your store, then ship orders directly from the supplier after the order is placed.

You can add any number of products to your store and manage your inventory from its interface. It also lets you track stock levels and organize products into collections.

Fulfill and Ship Orders

Shopify Checkout lets you provide your customers with a secure, fast checkout experience that ultimately leads to maximizing conversion rates. You can also add its Shop Pay checkout service that lets shoppers place orders with a single tap. The platform simplifies the shipping process; it allows you to print shipping labels and track orders from your dashboard.

Besides, Shipping on Shopify is easy and budget-friendly; it manages everything from printing labels to order tracking. You can use Shopify Fulfillment Network if you find a surge in orders. It will help you manage your inventory storage and returns, and suggest local delivery to nearby shoppers for additional delivery reassurance with Shop Promise.

Manage Your Payments and Finances

Shopify Payments allows you to accept all kinds of major payment methods in your store and offers secure and integrated payment processing. You can also use a wide range of other payment gateways and manage your business finances.

Shopify ensures you are gathering the right sales tax and increasing your cash flow with Shopify Credit, with 3% cashback on eligible commerce, shipping, or bulk purchases. Shopify also lets you monitor expenses and keep your bestsellers stocked with Shopify Capital funding.

Sell Across Multiple Channels

Shopify is not limited to online stores; you can use it to sell on various channels, including online marketplaces and social media platforms like FB, YT, Instagram, and even TikTok. It also lets you reach physical retail locations using the Shopify Point of Sale (POS) system. Using these options, you can grow your reach by providing services to customers worldwide and listing items on popular marketplaces such as Amazon, eBay, and Etsy.

Market and Grow Your Business

Shopify offers its premium users built-in marketing and SEO tools to drive traffic to their site and offline venues. This platform provides features like abandoned cart recovery emails, promotional discounts, and detailed analytics to track sales and customer behavior. Its Plus and Enterprise plans let you handle DTC, B2B, retail, and global sales from a single platform, making commerce flexible and scalable for you.

Who is Shopify for?

Shopify’s all-in-one approach makes it an amazing option for people and businesses of all scales. Let’s see how this platform is helping them-

Startups and Beginners: Shopify offers a no-code platform that allows entrepreneurs and new business owners with little to no tech expertise to get an online store site up and running in no time.

Growing Businesses: The platform offers scalable plans to help businesses of all sizes, from small startups to large ones. Growing businesses can upgrade their current plans to more premium ones to get more features and benefits needed for a sustainable and profitable business.

Dropshippers: The Shopify platform can also be a popular choice for dropshipping, as it offers integrations with 8000+ apps that connect you to suppliers for sourcing and shipping products.

Businesses with Physical Stores: For businesses with physical or offline outlets, it offers the Shopify POS system. It is ideal for retailers who want to unify and streamline their online and in-person sales and manage everything from a single place.

Shopify Plans and Pricing

The platform offers various plans to accommodate the needs of every business, and businesses can change these plans as they grow. You can take a 3-day trial (then ₹20/month for 3 months) of any plan to find the best one for your store. Here is its pricing structure for its plans and features.

Basic Plan

It is a popular option among solo entrepreneurs and small businesses run by 1 or 2 people. Its pricing starts from ₹1,994 INR/month, with 2% card rate for 3rd-party payment providers.

Highlighted Features:

• 10 inventory locations
• In-person selling by phone or a POS device
• Unlimited products
• 24/7 chat support

Grow Plan

This plan starts at ₹7,447/month and is best suited for businesses with small teams (up to 5 members). Its card rates start at 1% 3rd-party payment providers.

Highlighted Features:

• All features of the basic plan +
• 5 staff accounts
• Full access to custom apps

Advanced Plan

The advanced plan is suitable for mid to large-scale businesses. Its pricing starts from ₹30,164/month, with card rates at 0.6% 3rd-party payment providers.

Highlighted Features:

• Includes all features of the grow plan +
• Local storefronts by market
• 15 staff accounts
• Available on a 1- or 3-year term

Plus Plan

It is created for more complex and large-scale businesses. Its monthly subscription starts at ₹1,75,000 on a 3-year term.

Highlighted Features:

• All the features of the advanced plan +
• Up to 200 POS Pro locations
• Sell wholesale/B2B
• 200 inventory locations
• Fully customizable checkout

If you choose an annual Shopify subscription, you save up to 25% on monthly rates.

Key pros and cons of using Shopify

Now you know what Shopify is and its working, it is time to learn its positive as well as negative aspects.

Pros:

• The Shopify platform helps you set up a professional-looking online store without any coding or tech skills.
• The platform includes all the core functions that you will need to run an e-commerce business, including hosting, security, and payment processing.
• It offers a robust App Store with over 8k+ that you can integrate to add extra features and functionality as your business grows.
• Shopify allows you to operate and manage all sales from a web store, social media platforms, and physical stores.
• Shopify handles all security updates and is PCI compliant, thus it provides a secure and stable environment for both you and your customers.

Cons:

• If you don’t use Shopify Payments, you will be charged an additional transaction fee for each sale. Also, your business is dependent on Shopify’s infrastructure and rules; migrating to another platform can be complex.
• Compared to other open-source platforms like WooCommerce, Shopify offers less flexibility for deep technical customizations.
• You will get a free trial, but it requires a paid Shopify subscription to start selling. Also, you can not use many advanced features; they are limited to higher-tier plans or expensive third-party apps.

Conclusion:

I hope this post helps discover the benefits of one of the most popular e-commerce platforms, Shopify, as well as its limitations or cons. Thanks to the integration of WordPress and Shopify, you easily start your online store, manage transactions, and monitor the growth of your business. Also, this e-commerce platform is solely designed to help businesses go online and boost sales of their products. So, if you want to grow your business into the online space or streamline your eCommerce operations, then Shopify is for you, as it has all the tools you need to scale your business.