Shopify is a cloud-based global ecommerce solution that connects online merchants with buyers. As such, it uses the SaaS (software as a service) business model. Shopify has been in operation for more than a decade, and is currently in the spotlight due to the ease of opening an online store on its platform. This easy-to-use platform is highly and widely used among online merchants, especially among millennial and Gen Z entrepreneurs. However, many people do not know how Shopify actually works and what they need to know to start a Shopify store.
How does Shopify work?
Shopify is simply the platform that hosts your online store. As such, it provides the framework for online store and retail point of sale systems and offers a host of different services, including payment collection, marketing applications, and shipping and customer engagement tools. These features are all focused on making it easier for the ecommerce business owner to get their platform set up and start making sales quicker.
Once you have your platform set up, you’ll have to pick a Shopify plan and pay subscription fees. These grant you access to Shopify’s admin panel where you can manage your online store, upload your products, and make sales.
Shopify has several pricing plans to choose from according to your budget. The first of these plans is the Shopify Basic plan, which costs $29 monthly (and 2.9% + 30¢ per transaction). You can sell an unlimited number of products with this plan, but the drawback is that special features like accepting gift cards are not available. Next up is the Shopify Recommended plan, which costs $79 monthly (and 2.6% + 30¢ per transaction). It offers a lower credit card rate, and more features are available.
At the higher end of service is the Shopify Advanced plan. This plan runs at $299 monthly (and 2.4% + 30¢ per transaction). Not only does it have the lowest credit card rate, but it also offers the best shipping solutions. Finally, for enterprise level businesses, Shopify offers the Shopify Plus plan, which starts at $2000 monthly. This premium subscription offers more optimization and customization for your site; likewise, a 24/7 support team that will guide you in your business.
However, keep in mind that these plans do not cover the domain name costs. Domain names can be purchased at the rate of $14 and above per year. Additional transaction charges also apply if you are not using the Shopify payment system powered by Stripe. Shopify also runs a 14-day free trial system, after which you can pay $9 a month for access to Shopify Lite. This plan is perfect for those who want to try out their hands on an online business or people who are short of funds and don’t need a lot of features.
Third-party Shopify integrations
Shopify works with dropshipping apps like Oberlo, Ordoro, and Aliexpress. If you are using your store for dropshipping, you can contact sellers through the dropshipping platforms, upload the pictures of the products you intend selling as well as the price. Your price should also take your profits margins into account.
When a customer buys your product from your store, Shopify will process the payment transaction, and you get paid. After confirming the payment, you process the order and ship from the manufacturer to the customer using the Shopify shipping system, which is reliable and offers a great discount. On the plus side, you can use your Shopify store to sell offline through the Shopify point of sale system. This system allows you to complete offline retail transactions to individuals or other stores and make manual transactions that will still reflect in your dashboard.
Now that you know how Shopify works, what is there not to love about this fantastic platform? There is, of course, more to learn about Shopify, but the best way to do so is by signing up for a free trial and trying out the platform for yourself and seeing if it meets your ecommerce needs.
