What Is Shopify and How Does It Work? – A Guide For Dummies

What Is Shopify and How Does It Work? – A Guide For Dummies

Today i’m going to be answering the following question: What is Shopify?

Why? I hear you ask…

Well, because i have been selling products online for almost five years now and shopify has been an important part of my journey.

This article is basically a shopify guide for dummies

Now i’m not saying you are a dummy (that would be rude), i’m just trying to give you a comprehensive understanding of the platform.

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My name is Nick (Hello, that’s me above) and i sell products online full time.

I started using Shopify a few years a go as i wanted to create another stream of income.

Today i’m going to run you through everything you need to know about the platform.

I’m also going to explain why it has become an important part of my eCommerce strategy.

If you are completely new to shopify don’t worry… you are in the right place.

I’d recommend taking the time to read this article all the way through to the end…

If you do i’m confident you will know everything you need to know about the platform.

I want to give you the facts so you can work out if it’s a good fit for you and your business.

Something You Probably Didn’t Know

Shopify as we now know it has been created for anyone that wants to sell products online.

It is a SAAS Product (Software as a service) for anyone looking to create their own eCommerce website.

With shopify anyone can build and manage their own store.

Their main target market is online retailers that would like to create their own website / online store.

The platform integrates with all sorts of other software; Amazon, Printful, Oberlo and Clickfunnels just to name a few (More on this later).

Shopify is a Canadian company, their head quarters is based in Ontario.

The company was set up by Tobias Lutke, Daniel Weinand and Scott Lake in 2004.

In the beginning it was something entirely different.

It was created to sell high end snowboarding equipment, the original name of the company was actually “Snowdevil“.

Pretty crazy right? A lot of people don’t know that…

Anyway Shopify was reborn and launched as a platform in 2006.

Since then it’s grown from strength to strength.

In June 2019 Shopify are known to have over 820,000 merchants using the platform…

They must be doing something right.

Anyway let’s jump into the details.

What is a Shopify Store?

Think of your shopify store as your online shop.

It’s up to you to put your products in the shop window and make it look as inviting as you can for your customers.

Once you have created an account or signed up for the free trial, you can start uploading products and customizing the look of your store.

As the years go on branding is becoming more and more important…

In my opinion if you want to grow a long term business you need to build trust around your brand and reputation.

Ideally you want to create a store that compliments your brand.

If you are struggling to come up with a colour scheme and identify for your brand you may find this article useful.

But don’t read it now, save it for later!

To change the look of your store shopify provide you with a range of themes (Free & Paid)…

There are hundreds to choose from.

They’ve made it really easy for anyone to create a professional looking store, you don’t need any coding skills whatsoever.

Of course if you’ve got those sort of skills you do have the option to use custom HTML and CSS – The sky’s the limit.

What is shopify?

Once you’ve chosen your theme, your store really starts to take shape.

From there on in you can upload your logos, product and marketing images and away you go.

You can add as many products as you like, you can see why entrepreneurs LOVE this platform…

You’ll have to write up your product titles, descriptions and product pricing.

Shopify also give you the ability to group and organize products as you see fit…

Maybe you offer slightly different products for Men, Women or even Kids…

It would make sense for these to be organised into their own relevant sections.

Once you’ve created your store you’ll have to decide on your payment gateway.

Shopify have their own payment gateway or you can use a third party solution like stripe or whatever you are used to.

They provide you with all the reporting options so you can easily access your sales figures etc at any given moment.

If this all seems a little overwhelming don’t worry…

I’m going to run through a complete shopify set-up checklist later in this article.

How Does Shopify Work?

Hopefully you now have a pretty good grasp of what shopify is all about.

But How does Shopify actually work?

There is obviously a very complicated answer to this question but i’m going to stick with the simple version.

Shopify is cloud based and hosted, this means that when you create a store you don’t have to worry about maintaining web servers etc.

You also don’t have to worry about the software itself…

Shopify have a team of more than 1200 people.

Any issues with the software itself is quickly sorted by a team of dedicated software engineers.

That’s one less thing to worry about.

I also use wordpress and this content management system differs in a big way…

With WordPress it’s up to you to solve any issues or problems with your individual website…

Where as with Shopify they’ve got you covered.

I suppose you don’t have to worry too much about how shopify works…

All you need to do is pay your monthly fee and focus on growing your business.

With shopify you are given access to an dashboard panel where you can manage all of your stores information.

Here is the dashboard view of a shopify store I created not so long ago.

how does shopify work

As you can see on the left hand side you have a navigation menu…

You can use this menu to do pretty much anything within your store.

It’s very easy to navigate, after a few weeks i felt like a pro.

Who Uses Shopify?

If you are reading this article you are probably considering using shopify…

Either that or you just want to learn more about the software.

Wise move, i always like to do my research first!

Which ever it is, it would be very difficult for me to guess what sort of business you have.

Mainly because Shopify fits so many different business models.

Here are a few business models that tend to work well with Shopify…

  • Amazon FBA – Sellers looking to grow their sales away from Amazon
  • Dropshipping – Users of Oberlo etc (Shopify now own Oberlo!)
  • Print on demand – Users of Printful, Printify, Teespring etc
  • Online Retailers – Maybe previous users of eBay, Facebook marketplace and so on
  • Physical Businesses – With POS alot of Merchants rely on shopify to help them organize their business
  • eCommerce Businesses – If you’ve got something to sell, shopify can probably help.

So… What can shopify do? 

Urm… A lot.

Too many things for me to mention really but hopefully this gives you an overview.

What Does Shopify Work Well With?

I’m guessing it would be useful for you to know what shopify works well with…

This way you can work out whether or not Shopify would be a good fit for you and your business.

Linking Shopify With Print On Demand

I have friends that have fairly big print on demand businesses….

Most of them use printful so i may aswell explain how shopify and printful work.

A lot of them use shopify and printful to great effect.

Basically they will use Shopify to set up shop and Printful for the creation and fulfillment of their merchandise (usually t-shirts).

This business set up is very hands off once it’s going.

All you have to worry about is managing your store and driving awareness to your products.

Can Shopify Link To Amazon?

Yes it can and it can work really well.

I combine Shopify with Amazon FBA to great effect.

My Shopify store handles the product organisation / order processing side of the business…

Whilst Amazon FBA handle the fulfillment side of things.

I store my goods within an Amazon FBA warehouse and they will pick, pack and send out my products as and when orders come in.

This allows me to focus on the brand building and marketing side of the business.

If you are in the USA – Shopify links seamlessly into Amazon FBA with a touch of a button.

If you are based in the UK or anywhere in Europe for that matter you will need to use a third party app to connect the two.

We have used orderdesk for sometime now and it’s always worked well for us.

Shopify have told me they are working on integrating Shopify directly to Amazon FBA across the whole of Europe.

As you may know i started my eCommerce career as an amazon seller…

A lot of people ask me, “Nick, which is better Shopify or Amazon?”

If you are interested in the answer you may find the article below useful…

Amazon Vs Shopify: Which Is Better?

Anyway…. Moving on.

Dropshipping On Shopify

This is another business model that integrates seamlessly with shopify.

I have never been into dropshipping myself, but i know plenty of people that are.

If you are a drop shipper you are free from the problems that come with inventory management.

Here is how the process works…

  • Customer buys an item from your Shopify Store
  • The order is sent to a third party supplier
  • The supplier then ships the product to your customer
  • You don’t touch the product
  • If done correctly you will make a profit on each item you sell
  • Rinse & Repeat

The reason i have avoided drop shipping is because i like to focus on business models that own the asset.

I know it comes with more responsibility but over the long term it’s much easier to sell a brand.

With that being said i have huge respect for drop shippers, it is definitely a skill!

Some people out there are making a fortune!

When it comes to dropshipping people tell me that shopify and oberlo are a match made in heaven.

Shopify now actually owns Oberlo, if that’s not evidence to say they work well together i don’t know what is.

Here is a video tutorial for anyone that wants help setting up Shopify and Oberlo.

This brings me nicely onto the next question.

What can you sell on Shopify?

The answer to this is simple…. Pretty much anything.

The question should be: What can’t you sell on shopify

So we all know that you can sell any physical items on shopify (unless it’s prohibited).

On that subject here’s a link to Shopify’s prohibitied items…

Shopify probably isn’t the place for you if you are looking to sell grenade launchers.

With physical items if you abide by the rules and have the capability to ship the product you should be fine.

You don’t just have to sell physical products on Shopify, here is a list of other things you could sell…

  • Digital Gift Cards
  • Tickets for Events
  • Services -Appointments etc
  • Consultations
  • Digital Products
  • Affiliate Products
  • Experiences
  • Classes and Workshops
  • Installations & Quotes

The list goes on!

Can Shopify Integrate With WordPress?

Yes to be fair there isn’t really much that Shopify doesn’t integrate with.

Let’s say you’ve got an existing wordpress website and you want to sell products…

For this shopify and wordpress is a match made in heaven.

All you need to do is sign up to shopify…

If you haven’t already i’d recommend taking up their free trial.

From their you’ll need to install the shopify eCommerce plugin and away you go.

Firstly you’ll need to upload your products to your shopify store…

But from there it’s pretty easy to add products to your wordpress site with a click of a button.

You can display your products via an image, price and button or just a button on its own – That’s up to you.

You could even add your product as a widget…

It has to be said Shopify and WordPress integrate nicely.

This brings me onto another winning combination.

Does Shopify Work With Clickfunnels?

The answer to this question is YES…

Like i’ve said Shopify will integrate with almost anything.

In simple terms Clickfunnels is a market leading landing page builder, it’s an easy way to build online sales funnels.

Sales funnels can be an extremely effective eCommerce strategy if done in the right way.

If you don’t fully understand how a sales funnel works you may well find the following video useful.

To integrate shopify with clickfunnels you’ll need a clickfunnels account.

The integration works in a similar way to wordpress…

You’ll need to upload your products to shopify and from there you can add the products into your click funnel.

By integrating the two you can automatically take orders from Clickfunnels straight into your shopify account.

This could allow you to test out different front end marketing strategies whilst allowing Shopify to do all the other stuff.

Sell On Amazon With Shopify

Amazon and Shopify is a very popular integration…

As you may know I started my online journey selling products on Amazon, this was actually how I first discovered Shopify.

I’ve put together the following video to show you everything you need to know about the integration.

Anyway, enough about the integrations, let’s look at go through the pricing side of things.

How Much Does Shopify Cost?

Before we dive into this please know that Shopify offer a 14 day free trial…

I know i keep saying it but it’s important.

The free trial allows you to test things out before deciding if it is actually right for you.

Shopify offer several paid plans…

With all of their paid plans you’ll be given the following:

  • An online store
  • Unlimited Products
  • Multiple Sales Channels
  • Shopify Payments and the Shopify POS App

Let’s have a look at the different plans.

I should mention the screenshot below doesn’t include the “Lite” plan which is $9/month*

How much does shopify cost

The above screenshot does not include all of the features but don’t worry i’ll cover this.

The main difference between the three is the number of staff accounts you require…

As you go up the plans payment processing costs also reduce.

This is why it’s sensible to upgrade your plan as your start to sell more and more products.

For example…

Basic shopify plan is 2.9% + 30 cent per transaction.

“The Shopify Plan” is 2.6% + 30 cent per transaction.

Advanced Plan is 2.4% + 30 cent per transaction.

Shopify Plus is just 2.15% per transaction.

It must also be said that the professional reports are incredibly useful….

You will only get these with the Standard and Advanced accounts.

Basic Shopify Subscription

With this plan you can build a fully functioning store for just $29 per month plus the above transaction fees.

You can build a store with unlimited products, a blog, a free SSL certificate, 27/7 Support and more.

If you are only just starting out this is probably a good place to start.

I used this plan for quite some time, although my monthly amount increased because of the additional paid apps i like to use.

The Shopify Plan

This is the most popular shopify plan and the plan I now use.

For this plan you pay $79 a month + the above mentioned transaction fees.

In addition to everything you get with the basic plan you also get access to the professional reports, gift cards and the abandoned cart recovery tool.

I must say the cart recovery tool has boosted our monthly revenue, it prompts customers that left before finishing their order.

Once reminded it’s surprising how many people then go ahead and complete the order.

It makes sense, most of us are pretty busy nowadays and a gentle nudge towards the till can actually be a useful reminder.

Basically the customer will receive an automated email reminding them to finish their order.

The stats for cart abandonment and order recovery is staggering.

If you have a serious business without a huge number of staff i’d say this plan is the one for you.

The professional reporting is an important feature for anyone looking to scale and grow their business.

The Advanced Shopify Plan

This plan is best suited to high revenue companies that require advanced reporting, decreased transaction fees etc etc.

You can have up to 15 staff accounts, each member of staff will have dashboard access with the full suite of features.

This plan really has all the bells and whistles.

The cost is $299 a month + the above mentioned transaction fees.

With this plan pretty much everything is unlimited – Except the staff accounts.

If your business is bringing in more than $10,000 a month, i’d say this plan will be best suited to you.

You can take full advantage of unlimited cart recoveries…

This alone could pay for your subscription.

What Is Shopify Plus?

Shopify plus is for the big guys and gals.

The pricing starts from $2000 per month + 2.15% per transaction.

It’s really a solution for very big companies.

With shopify plus you can create up to nine stores.

With any other package you can only build one store per account…

This might be useful for any companies looking to move into new markets.

You are also given access to the Shopify plus academy…

This is basically a suite of online training resources to help you get the most out of your store.

Here is a list of the additional features:

  • Advanced Shopify Apps that have been designed for high growth stores
  • Fully Customizable checkout (You can do this on any store but coding skills are required)
  • Access to the Merchant Success Program
  • A Launch Engineer – They basically help you improve the speed of your online store (using third party integrations)
  • Unlimited Staff Accounts
  • Shopify plus academy as mentioned above + Access to the Shopify plus facebook group
  • A wholesale channel – This allows you to create a password-protected wholesale store

Full details on Shopify Plus can be found here.

What Is Shopify Lite?

Shopify lite is at the other end of the scale.

It’s basically a watered down version of shopify…

For starters you don’t get an online store.

I know that sounds crazy but let me explain.

This plan is suited to anyone that may want to sell products through social media or their own blog.

With shopify lite you can use a shopify “Buy” button on your existing website.

This is great as you can then make use of their payment gateway.

Basically this plan should only really be used if you have an existing website or sales channel.

It may even suit you if you have a physical business, you can use the Shopify POS App to sell in person!

It’s best suited to anyone looking for help with inventory management, payment gateways etc.

You still get a dashboard overview, but the features are incredibly limited.

What Is Shopify POS?

Shopify POS stands for Shopify Point of Sale…

It basically allows you to complete transactions when you are out and about.

Shopify isn’t just for online businesses…

Shopify’s POS App is a point of sale system that works with android or IOS devices.

They make it easy to accept multiple payment methods.

The standard and advanced plans get additional features with the POS system.

With these features you can track individual employees…

This could be useful for tracking shifts, payments etc.

You also get unlimited staff PINS when adding staff members to the system, pretty cool right!

What Is Shopify Pay?

The majority of shopify merchants will do their sales online and with shopify pay you benefit from an accelerated checkout process.

To make use of this feature you’ll need to use shopify payments in your store.

With Shopify pay, customers can save their information and save time when making a purchase in the future.

Now we all know of the importance of customer data security, especially with information like this…

Shopifys servers are fully PCI-compliant and their information is only shared with you as a merchant once a customer has completed their order.

Shopify pay is a time saving option for customers, but it’s up to you if you want to make use of it.

Which Shopify Plans Are Best?

Hopefully the above summary will help you work out which plan might be a good fit for you and your business.

The answer to this question will depend on you as an individual.

Which Shopify Themes Are Best?

Again the answer to this question will depend on you and your business.

The theme you choose has to work with the branding and general feel of your business.

Here is a list of Shopify themes that you may like:

  • Basel
  • Gecko
  • Jasper
  • Fastor
  • Banita
  • Boutique
  • Foodly
  • Material

Here are some of the best free Shopify themes:

  • Minimal
  • Pop
  • Venture
  • Brooklyn
  • Narrative
  • Boundless
  • Simple
  • Fashe

There are A LOT of different shopify themes to choose from these are just some of my favorites.

Now as promised i’m going to give you a checklist to help you get started.

Getting Started With Shopify

Make a plan and take action…

This really is the only way to find results.

I’d recommend bookmarking this post and referring back to this checklist as you go.

1. Shopify Free Trial

Before you pay for anything make use of the 14 day free trial – You don’t need to commit a penny and within two weeks you could do a lot of damage.

Take up the free trial using the link above or the button below and get started! No excuses!!

2. Starting Your Shopify Subscription

Prepare yourself for the end of your free trial – Have a look at the different plans and using the information in this article choose the one that best fits you.

If you are starting out, just go Basic – You can always upgrade later down the line.

3. Choosing Your Stores Design – Shopify Themes

Before you start building out your store you are going to need to decide on a theme.

Use the list i have provided and look to see which theme you like the most.

Once you have decided – Install the theme on your store.

4. Uploading Products To Your Shopify Store

Now we are getting somewhere…

Start uploading the products you want to sell – This of course will depend on your business model.

If you have your own products that’s great – Upload your images and product details.

If you are a drop shipper find the products you want to sell on a site like Aliexpress and use Oberlo to quickly add these products to your store.

Oberlo is a great bit of software for drop shippers it’s supposed to be a real time saver.

5. Shopify Apps – Free & Paid Options

You have a lot of options when it comes to Apps, my advice: Keep it simple.

Your store should look clean and simple, don’t confuse the customer with information overload.

Here is a list of things i like to achieve by using different shopify apps:

  • Show customer reviews on your store
  • Create contact forms to capture customer details
  • SEO Audit recommendations
  • Printing labels, packing slips and invoices
  • Attractive buttons and pop ups to boost conversions

Don’t download Apps without reason – You can add and make changes as you go along.

Keep it simple and you will make the process much less overwhelming.

6. Setting Up Your Shopify Payments

This is an important step – You need to ensure you have a payment gateway installed and set up within your store.

This way you can receive funds from customers all around the world.

With shopify payments you can accept credit cards, debit cards and paypal.

Paypal has been really useful to me, in the early days it helped build trust between me and my customers.

Shopify payments makes this easy, alternatively you can use a third party like Stripe.

7. Setting Your Shopify Shipping Rates

You will need to set the amount you will charge customers for shipping.

Before i set a shipping rate i’ll always  work out my profit margins, i want shipping to be as cheap as possible whilst maintaining a good profit.

Don’t just guess! I don’t want you losing money.

If you are using a third party fulfillment service like Amazon, make sure you work out how much they are going to charge you for the fulfillment.

8. Shopify Integrations – Set Up Connections

This will depend on you and your business.

You will probably be integrating Shopify with other marketplaces or sales channels.

Here is a few to get you thinking:

  • FB Messenger
  • Email Marketing Service
  • Amazon
  • Facebook
  • Instagram

Like i say this depends on you and your strategy!

9. Choosing Your Shopify Domain Name – Branding

Shopify will give you a domain name automatically…

If you are building a serious business i’d say its very important for you to have your own custom domain name.

Usually this would be the name of your brand – www.brandname.com

I usually use godaddy to purchase my domains but if not namecheap is another option.

Shopify and godaddy will guide you through the set up process when it comes to connecting your domain name.

When setting up your store use this article as a guide.

10. Start Selling On Shopify!

Now it’s time for you to start selling your products.

Setting up a store is one part of the equation…

Now you need to drive awareness to your brand and products.

Your marketing strategy will be unique to you but i like to think about where my ideal customers may be “Hanging out”.

Let me expand on this a little further.

Let’s say you want to sell products for people with dogs…

You need to find out where these sort of people hang out.

Here are some ideas:

  • Facebook Groups – Dog Training, Dog Obedience, Golden Retriever Lovers, etc etc
  • Online Forums
  • Dog Related Events
  • Dog Related Sub Reddits

You get the idea…

Go out and start speaking to your target audience, maybe even send out some free products and start driving awareness.

Getting Your First Sale On Shopify

Shopify will even help you get your first sale…

Trust me it all starts to roll from there.

Check out the Shopify academy they have a lot of free resources to help you get started.

Is Shopify Worth It?

There is a reason Shopify brought in over $1,000,000,000 in revenue last year…

They have created an incredible SAAS Product.

For me there isn’t currently a better option within the eCommerce world.

Shopify has been built to help you sell products.

From Inventory management to marketing and order fulfillment, they will cover everything.

So…. what are you waiting for?

Grab the 14 day free trial and get to work.

I hope you’ve found this free guide useful!

If you have any questions ask away and i’ll do my best to help.

More from me soon,

Nick

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eBusiness Boss

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