What is Shopify and how does it work?

Shopify helps anyone build an online store and sell products through its subscription software. No coding needed. That’s why the platform works well for users who want to sell online, even without technical knowledge.

E-commerce sales in the United States hit $289.2 billion in the first quarter of 2024. This growth has pushed more businesses toward platforms like Shopify. The company’s success shows in its numbers, with total revenue reaching $2 billion in Q2 of 2024 – a 21% jump from the previous quarter.

Shopify’s strength lies in its adaptable design. The platform serves as a detailed e-commerce solution that handles all aspects of online selling: payment systems, shipping, emails, store management and more.

Sellers benefit from automated processes that make running an online store easier. Shopify’s checkout system proves its reliability with over 2.5 billion processed orders. The system keeps improving its speed, conversion rates, and customer experience. This piece explains everything about this all-in-one e-commerce solution that revolutionizes online retail – from starting a store to understanding how sellers use the platform.

What is Shopify and what is it used for?

Shopify works as a complete commerce platform that does more than just create online stores. Merchants can sell anywhere through a unified system – online, in-person, locally, globally, directly to customers, or wholesale.

Shopify as an all-in-one ecommerce platform

Most tools offer just one function, but Shopify operates as a complete commerce ecosystem with everything merchants need in one place. The platform has built-in tools for website building, inventory management, payment processing, order tracking, and analytics. Business owners can manage their entire operation from a single dashboard without having deep technical knowledge.

Merchants worldwide have generated over $1 trillion in sales using Shopify, and that’s no small achievement.

Types of businesses that use Shopify

Businesses of all sizes and types thrive on Shopify 

The platform works great for:

• Dropshipping operations
• Subscription-based businesses
• Physical retailers expanding online
• Multi-channel sellers (website, social media, marketplaces)
• Digital product creators

Gymshark stands out as one of Shopify’s success stories. The company grew from a garage startup to a global athleisure brand that generates over $500 million in annual sales.

What can you sell on Shopify?

Shopify lets you sell almost anything. While most merchants sell physical items like fashion, beauty products, home goods, and electronics, the platform easily handles:

• Digital products (downloads, courses, fonts)
• Services and consultations
• Event tickets and experiences
• Memberships and subscriptions
• Rentals and installations
• Digital gift cards

The platform’s flexibility helps founders get creative. Many merchants find innovative ways to sell just about anything on Shopify.

How Does Shopify Work for Sellers?

Starting a successful online business on Shopify needs a good grasp of how the platform works. Sellers can use its features to create and expand their online stores effectively.

Store Setup: Shopify Themes, Templates, and Customization

Shopify’s theme editor helps sellers personalize their storefronts after signing up.

The platform comes with free and premium themes that cost between $180 and $350.

These ready-made designs match your brand’s look perfectly. You can adjust colors, fonts, layouts, and content blocks without any coding skills. Shopify also lets you make advanced changes through HTML, CSS, and Liquid code if you need more control.

Product Management: Adding, Categorizing, and Inventory

Shopify makes product organization simple. Merchants can:

• Set up product listings with descriptions, images, pricing, and variants
• Create smart or manual collections to group products
• Keep track of inventory across multiple locations

The inventory management system updates stock numbers instantly when customers place orders. This prevents you from selling items you don’t have. The inventory dashboard shows stock levels and highlights your best-selling products. You’ll get alerts when items need restocking.

Checkout and Payments: Shopify Payments and Shop Pay

The platform’s secure checkout handles shipping details and payments smoothly. Shopify Payments lets merchants take different payment types, including credit cards, mobile wallets, and buy-now-pay-later options. Customers can complete their purchase quickly when items are in stock. The system holds inventory only after payment details are entered.

Top Eleven payment methods as a retailer to be aware of:

• Credit and debit cards
• Cash (COD)
• Mobile wallet
• Buy now, pay later
• Checks
• Bank transfer
• Autopay
• Cryptocurrency
• Rewards or points
• QR code payments
• Digital payment links

Shipping and Fulfillment: Shopify Shipping and 3PL Integration

Shopify Shipping gives sellers access to cheaper carrier rates. You can manage all shipping tasks from one dashboard. Growing businesses can connect with Shopify Fulfillment Network partners who take care of storage, packaging, and shipping.

Your products stay closer to customers for faster delivery. This lets you focus on growing your business instead of handling logistics.

POS Integration: Selling Online and In-Person

Shopify POS helps merchants sell products in physical stores while keeping inventory in sync with their online shop. The system works on iOS and Android devices.

You can create customer carts, change orders, and take various payments in person. This keeps all your sales data, inventory levels, and customer information consistent across every sales channel.

Shopify Plans and Pricing Explained

Shopify has pricing options that work well for businesses of all sizes and needs. These plans make it easy for merchants to pick what works best for them.

Shopify Starter: $5/month for social selling

The Shopify Starter plan is the most budget-friendly way to join the Shopify ecosystem at $5 monthly. This simple option works great for entrepreneurs who want to sell products without building a complete online store.

The Starter plan doesn’t give you a standalone website or customizable storefront like the higher-tier plans do. It’s a social-first approach that lets you sell through social media platforms, messaging apps, and your existing websites. You can sell your products on Instagram, WhatsApp, TikTok, Facebook, and anywhere else you can share links.

The plan has these key features:

• Unlimited product listings
• Shopify’s secure checkout system
• Basic order management tools
• Mobile point-of-sale capabilities
• Access to Shopify apps, including Linkpop (Shopify’s “link in bio” tool)

The low price comes with some trade-offs. Using Shopify Payments means you’ll pay higher transaction fees at 5% plus 30¢ per transaction compared to premium plans. Despite that, this plan is perfect for:

• Social media influencers and content creators
• Small businesses that sell mostly through social channels
• Entrepreneurs testing new product ideas
• Sellers who need just checkout features for their existing websites

New users can try it out with a three-day free trial. After that, there’s a special rate of $1 monthly for three months before the regular $5 monthly fee kicks in.

For more details, you can visit the Shopify Pricing page.

Key Features That Make Shopify Stand Out

Shopify’s ecosystem goes beyond its core features and lets merchants create truly unique businesses.

These tools are the foundations of what makes the platform so powerful for online sellers.

App Store: 8,000+ Integrations

Shopify’s marketplace has over 8,000 applications that boost store functionality. Each app goes through a thorough 100-checkpoint review process before publication to ensure quality and security.

This extensive collection helps merchants add specialized capabilities for inventory management, marketing automation, shipping logistics, or any business need without coding knowledge.

Marketing Tools: Email, SEO, and Social Media

Shopify delivers integrated marketing capabilities in multiple channels. The platform has built-in email marketing with drag-and-drop editors and pre-built automation templates.

Merchants can access tools for keyword research, site audits, and performance tracking to optimize SEO. Social media management features let you schedule and publish content on multiple platforms at once.

Analytics and Reporting

The platform’s analytics dashboard delivers up-to-the-minute data analysis with customizable metrics cards. Pre-built commerce reports give immediate insights without setup requirements. Merchants can modify existing reports or create custom explorations by adding more metrics and dimensions for deeper analysis. This evidence-based approach helps identify bestsellers, and some merchants report 50% year-over-year revenue growth through strategic use of analytics.

Shopify Balance and Shopify Capital

Shopify Balance works as a business financial account without monthly fees or minimum balance requirements.

Account holders get rewards at rates of 2.72% APY (Basic, Grow, and Advanced plans) or 3.75% APY (Plus plan).

Shopify Capital provides flexible funding options with repayment tied to daily sales percentages. This funding needs no credit checks, personal liability, or compounding interest, unlike traditional loans.

How to Start a Shopify Store Step-by-Step

A successful Shopify store launch depends on several essential steps. This organized process makes the setup straightforward and manageable.

1. Choose a Shopify Plan

Start with Shopify’s three-day free trial to test the platform’s features without any commitment. The first three months cost just $1 per month.

Shopify Basic, the most popular plan, costs $29 monthly with annual billing. Your business goals should guide your plan selection – whether you sell online, in-person, or through social media.

The premium plans come with extra features like detailed reporting and lower transaction fees.

2. Pick a Theme and Customize Your Store

Your brand’s visual identity needs the right theme. The Shopify Theme Store features over 100 themes, both free and paid. Paid options range from $180 to $350.

 Here’s what you need to customize:

• Match colors with your brand guidelines
• Select 2-3 complementary fonts
• Use the block-based editor for layout changes
• Add your logos and favicons

You’ll find the theme editor in your Shopify admin under Online Store > Themes > Customize.

3. Add Products and Set Up Collections

Your product catalog needs proper organization from the start. The Products section in your admin dashboard has an “Add product” button.

Add your product details, descriptions, images, and prices.

Product collections help organize items into logical categories like clothing types, seasonal items, or sale merchandise. Shopify provides two collection types: smart collections that update automatically based on rules, and manual collections where you select products individually.

4. Configure Payments, Shipping, and Taxes

The Settings > Payments section lets you set up payment processing.

Shopify Payments users pay no transaction fees.

Your shipping setup lives in Settings > Shipping and delivery, where you can set rates based on delivery zones.

Tax calculations happen automatically through Settings > Taxes and Duties, based on your store’s location.

5. Launch and Promote Your Store

The “Launch your site” option in the setup guide removes password protection.

Your store needs a proper homepage title, meta description, and social sharing image before going live.

SEO, social media marketing, and promotional campaigns will bring traffic to your new store. 

Shopify’s analytics tools help you track and improve based on how customers interact with your store.

Shopify Themes: Design and Customization

Shopify stores’ visual appeal and functionality depend on themes that are the foundations of their online presence.

Simple, Shopify, and Advanced Plans: Features and Costs

Shopify’s three core plans come with different features.

Plan	Monthly Cost (Annual Billing)	Online Transaction Fee	In-Person Rate
Basic	$29/month	2.9% + 30¢	2.6% + 10¢
Grow (formerly Shopify)	$79/month	2.7% + 30¢	2.5% + 10¢
Advanced	$299/month	2.5% + 30¢	2.4% + 10¢

What is Shopify Plus and How Much Does It Cost?

Big businesses can opt for Shopify Plus, which starts at $2,300/month with a 3-year commitment.

This plan improves features with 200 inventory locations, unlimited staff accounts, priority support, and customizable checkout.

Transaction Fees and Payment Processing Costs

Shopify Payments users see different transaction fees based on their plan.

Using other payment processors adds extra fees: 2% (Basic), 1% (Grow), 0.6% (Advanced), and 0.15% (Plus).

What is Shopify Theme?

A Shopify theme works as a pre-designed template that shapes your store’s look, layout, and functionality. The theme controls your store’s color schemes and navigation structure.

How to Choose a Shopify Theme

Your theme selection should match your industry, brand identity, and needed features. Mobile responsiveness matters along with customization options and loading speed.

The developer’s reputation plays a crucial role, too. Shopify’s Theme Store lets you filter themes by collection, industry, and features.

Best Shopify Themes (2025 Edition)

The standout themes for 2025 include Hyper for B2B/wholesale, Sleek for conversion optimization, Zest for mobile optimization, and Horizon as Shopify’s newest free option.

How Much Does a Shopify Theme Cost?

Theme prices range from free to $350.

Free themes give you simple features, while premium themes cost between $180-$350 and pack advanced functionality.

What Shopify Theme Is This? (How to Detect a Theme)

You can spot a theme on another Shopify store in three ways. Look at the page source with Ctrl+U, search for “themename” in the code, or use online tools like shopthemedetector.com.

What is Shopify Balance

Shopify Balance serves as a money management account built for e-commerce business owners. The service is available to stores in the United States or Puerto Rico. This financial tool lets merchants handle their store’s payments and transactions in one place.

The service stands out from regular banks with zero monthly fees, no minimum balance rules, and no overdraft or transfer charges. Your funds earn solid rewards – 2.72% annual percentage yield (APY:annual percentage yield) for Basic, Grow, and Advanced plans.

Plus plan users get an even better deal at 3.75% APY. These rewards add up daily and get paid monthly as credits to your Balance account.

You’ll get virtual and physical Visa® business cards that give up to 3% cashback on qualifying purchases. The service lets merchants set daily transfer limits up to $1,000,000. Your money becomes available by the next business day, which speeds up access to your funds.

The Shopify dashboard shows live insights that make financial management easier. You can track expenses, sort transactions, and check your balance without leaving the platform. Stores using Shopify Payments get their money up to seven days faster than traditional banks since Balance becomes their default payout account.

Shopify vs Other Platforms: Why Choose Shopify?

A comparison of e-commerce platforms shows why businesses choose Shopify. The differences between platforms help determine the best fit for your business needs.

Shopify vs Amazon

Amazon connects existing customers to products through its marketplace. Shopify lets merchants build their own branded stores.

Amazon boasts over 2.5 billion monthly visitors, but Shopify gives merchants total control over their brand experience. Sellers on Amazon must follow strict rules and face higher competition with referral fees from 8% to 45%.

Shopify’s success became evident in 2021 as it surpassed Walmart in US e-commerce sales, reaching $108.15 billion compared to Walmart’s $73.45 billion.

Shopify vs Ebay

Both platforms aid online selling, but eBay works mainly as a listing site with limited customization.

Shopify comes with nearly 200 templates while eBay has all but one of these options with just four storefront designs.

The ratings tell the story – Shopify scores well (4.4 stars on G2, 4.6 on Capterra) compared to eBay’s lower ratings (1 star on Trustpilot). Without doubt, Shopify’s App Store with thousands of integrations makes it more customizable.

Shopify vs Walmart Marketplace

Walmart Marketplace has less competition than Amazon and integrates with physical stores, while Shopify’s fulfillment network gives sellers more control and lets them keep their brand identity throughout the customer experience. Merchants can employ custom packaging and manage multiple channels from one dashboard.

Why Shopify Is a Great Starting Point for eCommerce

We focused on businesses that want to build unique brand identities with Shopify. The platform comes with an easy-to-use design, a strong app ecosystem, and grows with you – no technical expertise needed.

On top of that, it costs less for growing businesses, especially those that want full control over their customer experience.

Integrating Shopify With Other Marketplaces

Merchants can accelerate growth by expanding beyond a standalone Shopify store through marketplace integrations. These platforms help unite inventory, streamline order management and reach new customers effectively.

Shopify and Amazon Integration

Shopify merchants can connect with Amazon through various methods that include first-party and third-party solutions.

The “MCF and Buy with Prime” app connects Shopify directly to Amazon’s Multi-Channel Fulfillment service and enables automated order processing without extra costs.

Merchants can sync inventory, manage pricing, and process orders from one central dashboard. With these businesses can reduce fulfillment costs by up to 36% for multi-unit orders through this integration.

Shopify and eBay Integration

EBay’s massive network of 133 million active buyers worldwide becomes accessible when merchants connect Shopify with eBay. Several apps enable immediate inventory syncing, bulk listings, and unified order management between platforms.

These include CedCommerce eBay Integration (free to $89/month), Shopify Marketplace Connect (free up to 50 orders/month), and eBay Importer by Infoshore ($59.99/month).

Multi-Channel Growth: Shopify, Walmart, and Target+

Walmart Marketplace ($673.82 billion revenue) and Target Plus (invite-only platform) create more opportunities beyond Amazon and eBay.

Target Plus carefully selects top e-commerce brands for its curated platform. This gives merchants access to Target’s loyal customers through Shopify integrations.

Shopify Plans Comparison Table

Feature	Shopify Starter	Simple Plan	Grow Plan	Advanced Plan	Shopify Plus
Monthly Cost	$5/month	$29/month (annual)	$79/month	$299/month	$2,300/month (3-year term)
Online Transaction Fee (Shopify Payments)	5% + 30¢	2.9% + 30¢	2.7% + 30¢	2.5% + 30¢	Not mentioned
In-Person Transaction Fee	Not mentioned	2.6% + 10¢	2.5% + 10¢	2.4% + 10¢	Not mentioned
Third-Party Payment Fee	Not mentioned	2%	1%	0.6%	0.15%
Balance Account APY	Not mentioned	2.72%	2.72%	2.72%	3.75%
Full Online Store	No	Yes	Yes	Yes	Yes
Inventory Locations	Not mentioned	Not mentioned	Not mentioned	Not mentioned	200
Main Focus	Social selling & links	Simple e-commerce	Growing businesses	Advanced features	Enterprise-level
Staff Accounts	Not mentioned	Not mentioned	Not mentioned	Not mentioned	Unlimited
Custom Checkout	No	No	No	No	Yes
Priority Support	No	No	No	No	Yes

Key Takeaways

Here is a brief answer to “What is Shopify and How Does it Work?”.
It is a comprehensive e-commerce platform that enables businesses to sell online, in-person, and across multiple channels from one unified system. Here are the essential insights for anyone considering this platform:

• All-in-one solution:

Shopify combines website building, inventory management, payment processing, and analytics in a single dashboard, which eliminates the need for multiple tools.

• Flexible pricing for every stage:

Plans range from $5/month for social selling to $2,300/month for enterprise, with most businesses starting at $29/month for full e-commerce functionality.

• Massive app ecosystem:

Over 8,000 vetted applications extend functionality, allowing merchants to customize their stores without coding knowledge.

• Multi-channel selling capability:

Integrate seamlessly with Amazon, eBay, Walmart, and social media platforms while maintaining centralized inventory and order management.

• Built for scalability:

From solo entrepreneurs to billion-dollar brands like Gymshark, Shopify’s infrastructure supports growth without requiring platform changes.

• Financial tools included:

Shopify Balance offers business banking with up to 3.75% APY and no fees, plus funding options through Shopify Capital.

The platform’s strength lies in giving merchants complete control over their brand experience while providing the technical infrastructure needed to compete in today’s e-commerce landscape. Whether you’re testing a product idea or scaling an established business, Shopify’s ecosystem adapts to your growth trajectory.

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