What is Shopify & How Does it Work? 2024 Guide

Known for its user-friendly features and highly customisable design, Shopify is an all-in-one e-commerce solution for businesses of all sizes. 

In this article, we’ll explain what Shopify is, how it works, who can use it and much more.

Want to know whether Shopify is right for your business? Read our Shopify review.

What is Shopify?

Shopify is an online platform that helps people create and manage their e-commerce stores. It allows businesses to sell products or services online by providing the tools to build a website, list products, and process payments. 

Whether you’re selling physical items, digital products, or services, Shopify makes it easy to start and run an online business without needing advanced technical skills.

How Does Shopify Work?

Shopify works by providing everything you need to create and run an online store. Here’s how it works:

1. Set Up Your Store: Sign up for Shopify and choose a design template. You can customise this template using drag-and-drop features to match your brand, like adding your logo, colours, and images.
2. Add Products: Once your store is set up, you add your products, upload photos, and decide on sizes or colours if your products have options.
3. Choose How to Get Paid: Connect your store to payment options like credit cards or PayPal. If you accept in-person payments, you can set up Shopify POS to process payments securely.
4. Manage Orders: Shopify will notify you when a customer purchases. You can manage your entire sales process, including shipping and inventory, through Shopify. 
5. Market Your Store: To attract buyers, you can use discount codes, email marketing, and social media ads.
6. Track Your Success: You can track sales, see which products are most popular, and find out where your customers are coming from.

Pros & Cons

Who Can Use Shopify?

Shopify can be used by almost anyone who wants to sell products or services online, including small business owners, entrepreneurs, brick-and-mortar stores, artists, creators, drop shippers, and nonprofits. 

If you want to use Shopify Payments as your payment provider, your business must meet the criteria below:

1. Location: Your business must be based in a country that supports Shopify Payments, including the UK, the US, Canada, Australia, and several others.
2. Business Type and Products: Your business and products must not be on Shopify’s prohibited list. Prohibited categories include:
   • Regulated or Illegal Products: Such as firearms, drugs, or medical devices.
   • Financial Products: Like money transfers or cryptocurrency services.
   • Adult Products: Containing explicit content.
   • Counterfeit Goods: Items infringing on intellectual property rights.
   • Gambling: Including lotteries and betting services.
3. Compliance: You must comply with all applicable laws, regulations, and Shopify Payments’ terms and conditions for your country and industry.
4. Security: You must enable two-step authentication on your Shopify account to enhance security and prevent payout issues.

If your business doesn’t meet these criteria, you can opt for third-party payment providers that Shopify supports.

What Can You Sell on Shopify?

On Shopify, you can sell almost anything you want, including

• Physical products like clothes, home goods, beauty products and electronics.
• Digital products like e-books, music, software and courses.
• Services and appointments include consulting, coaching, and design.
• Subscriptions including monthly boxes and content access.

You can’t sell items on Shopify’s prohibited list, such as illegal or regulated products, products involving adult content, or trademarks. Check Shopify’s policies to ensure your products comply with their rules.

Where Can You Sell Using Shopify?

Shopify’s international features, such as language translation, currency conversion, and global shipping options, allow you to sell products and services globally. 

With Shopify, you can sell your products in several places:

1. Your Online Store/ Website: Create a shop where customers can browse and buy your products directly. You can also add “Buy Now” buttons to other websites or blogs.
2. Social Media: Let your customers buy directly through social media by setting up a shop on Facebook or tagging your products in posts and stories on Instagram
3. Emails: Market your business and encourage your customers to buy through product links in emails. 
4. Online Marketplaces: Reach a larger audience by listing items on popular marketplaces, including Amazon, Etsy and eBay
5. Physical Stores: Use Shopify’s POS system to sell in person at your physical store or events and sync your sales with your online store.
6. Mobile Apps: You can create a custom app using Shopify APIs.

What’s Included With Shopify?

Shopify is a highly customisable platform that can be tailored to your business’s needs.

There are four subscription plans plus a range of optional add-ons from which to choose.

Core Features

Although each of Shopify’s subscription plans will give you access to different features, the core capabilities remain the same. 

All plans will have access to essential features, including the drag-and-drop online store builder, templates and themes, inventory management system, multiple sales channels, analytics, and 24/7 customer support.

Advanced Features

The Advanced and Plus plans are designed for larger businesses with more complex needs and give you access to a broader range of features.

The Plus plan customers benefit from exclusive features, including greater customisations to Shopify Checkout, the ability to sell B2B and wholesale, scheduled promotions, releases and updates and enhanced bot protection during flash sales.

Additional Products & Services

Shopify offers a range of upgrades and add-ons to enhance your custom solution. 

These optional extras include:

• Shopify POS Pro – Software and hardware designed for bricks-and-mortar businesses that automatically syncs with your physical and online operations. 
• Shopify Markets – Create targeted profiles customised to different countries and regions for an improved customer experience.
• Shopify Email  – Your first 100,000 branded emails monthly, with further emails incurring an additional charge.
• Shopify Bill Pay – Conveniently schedule and pay your business payments.
• Shopify Fulfilment Network – Manage your fulfilment process directly through your Shopify account.
• Shopify Marketplace Connect – Save time by syncing your listings, orders and inventories across multiple marketplaces. Your first 50 each month are free, after which an additional fee will apply.  
• Shopify Collabs – Connect with content creators and influencers to reach a wider audience.

3rd Party Apps

Need a feature not offered by Shopify? Chances are you’ll find it on Shopify’s App Store.

With thousands of 3rd party apps to choose from, you can extend the capabilities of your solution to make it work for your business.

What Is Shopify’s Pricing?

To access the Shopify platform, you must subscribe to one of the four subscription plans, paying either monthly or annually to receive up to a 25% discount. 

Each transaction processed, whether you use Shopify Payments or a 3rd party payment provider, will also incur a fee, as shown in the table below. 

Service	Basic	Shopify	Advanced	Plus
Subscription	£25 per month or £228 per year	£65 per month or £588 per year	£344 per month or £3108 per year	From $2,300 (approx £1755) per month on a 3-year term
Online British credit cards	2% + 25p	1.7% + 25p	1.5% + 25p	Best rates
Online Amex credit cards	3.1% + 25p	2.7% + 25p	2.5% + 25p	Best rates
Online international credit cards	3.1% + 25p	2.7% + 25p	2.5% + 25p	Best rates
In-person card transactions	1.7%	1.6%	1.5%	Best rates
3rd party provider transaction fee	2%	1%	0.6%	0.2%

Shopify FAQs