What Does Shopify Do Exactly?
What is Shopify Mainly Used For?
Creating Online Stores: Its main purpose is to provide a platform for merchants to build fully functional e-commerce websites. This includes storefront design, product listings, shopping carts, and checkout processes.
Selling Physical Products: From clothing and electronics to furniture and groceries, Shopify offers robust tools for managing inventory, product variations (sizes, colors), and shipping for tangible goods.
Selling Digital Products: Ebooks, music, software, online courses, and digital art can all be sold and delivered instantly through Shopify.
Selling Services and Appointments: With specific apps, Shopify can facilitate bookings for services like consultations, workshops, salon appointments, and more.
Dropshipping: It’s incredibly popular for dropshipping businesses, allowing seamless integration with suppliers and automated order fulfillment without the merchant needing to hold inventory.
Print-on-Demand: Integrates easily with print-on-demand services, enabling entrepreneurs to sell custom-designed products without managing manufacturing.
Managing Orders and Customers: Provides a centralized dashboard to track orders, manage customer information, and handle returns.
Processing Payments: Offers its own payment gateway, Shopify Payments, along with integrations for numerous third-party options.
Marketing and Analytics: Includes built-in tools for basic marketing campaigns (like email automation) and analytics to track sales performance and customer behavior.
Point of Sale (POS): Shopify POS integrates online and offline sales, allowing businesses with physical stores to manage inventory, sales, and customer data across all channels.
What Does Shopify Basically Do?
Web Hosting: You don’t need to find and pay for a separate web host; Shopify hosts your store on its secure servers.
Website Development: You don’t need to code your website from scratch. Shopify offers customizable themes and a drag-and-drop editor to build your storefront.
Security: Shopify takes care of SSL certificates, PCI compliance, and overall platform security, protecting both your store and your customers’ data.
Updates and Maintenance: Shopify handles all software updates, backups, and server maintenance, ensuring your store is always running on the latest, most secure version.
What Kind of Things Are Sold on Shopify?
Fashion and Apparel: Clothing, accessories, shoes, jewelry. This is one of the largest categories.
Beauty and Cosmetics: Skincare, makeup, hair products, perfumes.
Home Goods: Furniture, decor, kitchenware, bedding.
Electronics: Gadgets, accessories, smart home devices.
Food and Beverages: Specialty foods, coffee, tea, baked goods (often with local delivery/pickup).
Art and Handmade Goods: Paintings, sculptures, custom crafts, unique artisan products.
Digital Products: Ebooks, online courses, software, music, digital art prints.
Services: Consulting, coaching, online workshops, photography sessions, event tickets.
Health and Wellness: Supplements, fitness equipment, natural remedies.
Pet Supplies: Food, toys, accessories for pets.
Subscription Boxes: Curated product boxes delivered monthly.
Print-on-Demand Products: T-shirts, mugs, phone cases with custom designs.
Dropshipped Goods: Products sourced from suppliers and shipped directly to customers.
Is Shopify Worth It for Beginners?
Ease of Use: Its intuitive interface means you can set up a basic store, add products, and process your first sale without needing to learn coding or complex web development. The drag-and-drop theme editor makes design accessible.
All-in-One Solution: Shopify handles hosting, security, and maintenance, removing major technical hurdles for newcomers. You don’t need to worry about server uptime or getting an SSL certificate.
Abundant Resources: Shopify provides extensive documentation, tutorials, webinars, and 24/7 customer support. There’s also a massive community of users, developers, and partners offering help.
Scalability: While you start simple, Shopify can grow with your business. You won’t outgrow the platform quickly, even as your sales volume increases significantly.
Apps Ecosystem: The Shopify App Store allows you to add advanced functionalities as your business needs evolve, without complex custom development.
Built-in Marketing & Sales Tools: It includes features like discount codes, gift cards, and basic analytics, which are crucial for attracting and retaining customers.
How Much Does Shopify Take from a $100 Sale?
What Percentage of a Sale Does Shopify Take?
Your Shopify Plan: The higher your plan, the lower the transaction fee (if you’re not using Shopify Payments).
Whether you use Shopify Payments: If you use Shopify’s native payment gateway, they waive their own transaction fees.
Basic Shopify Plan: 2.0% transaction fee (if using third-party payment gateway).
Shopify Plan: 1.0% transaction fee (if using third-party payment gateway).
Advanced Shopify Plan: 0.5% transaction fee (if using third-party payment gateway).
Basic Shopify Plan (Shopify Payments): 2.9% + $0.30 per online transaction.
Shopify Plan (Shopify Payments): 2.6% + $0.30 per online transaction.
Advanced Shopify Plan (Shopify Payments): 2.4% + $0.30 per online transaction.
Using Shopify Payments: You’d pay $2.90 + $0.30 = $3.20 to Shopify Payments.
Using a third-party gateway (e.g., Stripe, with Stripe’s 2.9% + $0.30 fee): You’d pay $2.90 + $0.30 = $3.20 to Stripe, plus 2.0% of $100 = $2.00 to Shopify. Total: $5.20.
How Much Does Shopify Take from the Seller?
Monthly Subscription Fee:
Basic Shopify: ~$29/month
Shopify: ~$79/month
Advanced Shopify: ~$299/month
Shopify Plus: Starts at $2,000/month for enterprise-level businesses.
Transaction/Processing Fees:
Monthly Subscription: $29
Transaction Fee for a $100 sale (using Shopify Payments): $3.20
If you have 10 sales of $100 in a month ($1000 total sales):
Monthly Subscription: $29
Transaction Fees: 10 sales * $3.20/sale = $32.00
Total Shopify Cost for the month: $29 + $32 = $61.
Does Shopify Take a Cut of Your Profits?
Revenue (for transaction fees): A percentage of the sale price (plus a fixed amount) if you use Shopify Payments, or a percentage of the sale price plus your payment gateway’s fee if you use a third-party gateway.
Time (for subscription fees): A fixed monthly fee regardless of your sales volume.
Is it Better to Sell on Etsy or Shopify?
Sell on Etsy if:
You sell unique, handmade, vintage, or craft supplies: Etsy’s audience is specifically looking for these types of goods.
You’re a beginner and want minimal setup: Etsy is extremely easy to get started with, acting as a ready-made marketplace. You just list your items.
You want built-in audience and traffic: Etsy attracts millions of buyers actively searching for products like yours, reducing your immediate marketing burden.
You don’t want to build a whole website: Etsy is your storefront within their platform.
Lower upfront costs: Listing fees are very low ($0.20 per listing), and commission is taken only upon sale.
Sell on Shopify if:
You want to build a strong brand identity: Shopify gives you complete control over your store’s design, branding, and customer experience. You own the customer relationship.
You want to scale and have more control: Shopify allows for limitless product listings, custom features via apps, and deep integrations that Etsy doesn’t offer. You’re not subject to Etsy’s rules or potential algorithm changes that can impact your visibility.
You plan to sell a high volume or diverse product range: Shopify’s infrastructure is built for scale.
You want to collect customer data and build email lists: On Shopify, you own your customer data, which is invaluable for marketing and retargeting. On Etsy, customer data is primarily owned by Etsy.
You want to reduce per-sale fees as you grow: While Shopify has a monthly fee, its transaction fees can become more cost-effective for higher sales volumes, especially if you use Shopify Payments. Etsy’s transaction fee (6.5% + $0.25 per transaction, plus payment processing fees) can add up quickly.
My Take:
How to Avoid Shopify Transaction Fees?
What is the Downside of Shopify?
What is the Main Drawback of Shopify?
Recurring Monthly Fees: Unlike WooCommerce, where you buy hosting, Shopify charges a consistent monthly subscription fee (starting at $29/month) regardless of your sales volume. This is a continuous operational cost that can feel significant, especially during slow months or when you’re just starting and not generating much revenue.
Transaction Fees (if not using Shopify Payments): As discussed, if you choose not to use Shopify Payments, you incur additional transaction fees on top of your payment gateway’s fees, which can quickly eat into margins.
App Costs: While the App Store is a major strength, many essential or desirable apps come with their own monthly subscription fees, which can quickly add up and inflate your total monthly Shopify bill. I’ve seen clients surprised when their $29/month plan turns into $80 or $100+ because of app subscriptions.
Less Customization Control: While you can customize themes, deep-level customization often requires coding (Liquid, Shopify’s templating language) or relying on app functionality. You don’t have direct access to the server or database, limiting what you can change at a fundamental level. You are constrained by Shopify’s architecture.
Platform Lock-in: You are entirely reliant on Shopify’s platform. If you decide to leave, migrating your store can be complex and requires careful planning, as your data is hosted by them.
What is the Biggest Problem with Shopify?
Reliance on Shopify’s Rules: Your business operates under Shopify’s terms of service. If they decide to change their policies, fees, or even close your store (for violating terms, rightly or wrongly), you have limited recourse. This isn’t common, but the possibility exists.
No Server Access: You can’t directly access your server, install custom software, or make deep modifications to the underlying code that might be necessary for highly unique business models or very specific integrations.
Customer Relationship Ownership (indirectly): While you get customer data, the fundamental platform connection is through Shopify. Building direct, independent customer relationships relies on you actively using email marketing and other tools outside the platform’s core dependency.
What are the Risks of Shopify?
Escalating Monthly Costs: As your business grows, you might need to upgrade to higher Shopify plans (which are more expensive) or subscribe to numerous apps. These recurring costs can quickly eat into your profit margins, especially if not managed carefully.
App Dependence: Becoming overly reliant on many third-party apps can introduce complexities. An app might stop working, become unsupported, or introduce security vulnerabilities. Managing app subscriptions and ensuring compatibility can be a headache.
Limited SEO Control (for advanced users): While Shopify offers good basic SEO features, highly advanced or custom SEO strategies might be harder to implement compared to WordPress/WooCommerce, which offer more granular control over URLs, site structure, and content types.
Data Portability Challenges: While Shopify offers tools to export data, migrating a complex store with apps, customer data, and order history to another platform can still be a challenging and time-consuming process.
Payment Gateway Lock-in (for avoiding fees): The incentive to use Shopify Payments, while cost-saving, means you’re largely tied to their payment processor, potentially limiting your options for finding better rates elsewhere.
Template-Based Design: While themes offer great starting points, achieving a truly unique design that stands out from millions of other Shopify stores can be challenging without custom development or a premium theme builder.
Why Do So Many Shopify Stores Fail?
Lack of a Niche/Market Need: Selling products nobody wants or in an oversaturated market without a unique selling proposition.
Poor Marketing: Building a store is only the first step. Without effective marketing (SEO, social media, paid ads), no one will find your store.
Bad Products/Customer Service: Low-quality products, slow shipping, or unresponsive customer support will quickly lead to negative reviews and lost sales.
Lack of Capital: Underestimating startup and ongoing operational costs (including Shopify’s fees, advertising, inventory).
Lack of Patience/Grit: E-commerce success rarely happens overnight. Many give up too soon.
Over-reliance on Dropshipping: While popular, dropshipping has thin margins, high competition, and supply chain complexities that can make it difficult to sustain without strong operational management.
Ignoring Analytics: Not analyzing what’s working and what’s not, leading to wasted marketing spend and missed opportunities.
What Can I Not Sell on Shopify?
Illegal or Regulated Products/Services: Illegal drugs, prescription drugs (without proper licenses/verification), weapons (firearms, ammunition, certain knives), controlled substances, gambling, adult content (unless specifically permitted and compliant with local laws and age verification), counterfeit goods, stolen items.
High-Risk Business Models: Certain financial services, multi-level marketing (MLM) schemes, some types of tobacco or vape products, products with unsubstantiated health claims.
Hate Speech/Discrimination: Products or content that promote discrimination, violence, or hatred.
Intellectual Property Infringement: Selling products that infringe on copyrights, trademarks, or patents.
Unsafe Products: Products that are inherently unsafe or pose a direct risk to health and safety without proper warnings.
What is the Difference Between Amazon and Shopify?
Which is Better, Shopify or Amazon?
My Take:
You prioritize immediate access to a massive audience: Amazon has hundreds of millions of active shoppers who are already in “buying mode.” You don’t need to drive traffic to your store; it’s already there.
You want to leverage Amazon’s fulfillment services (FBA): FBA handles storage, packing, shipping, and customer service, simplifying logistics immensely.
You have a common, in-demand product: If your product competes primarily on price or convenience, Amazon’s marketplace is a powerful channel.
You want minimal marketing effort (initially): While Amazon ads exist, organic sales often come from search within Amazon.
You don’t want to build a brand/website from scratch: You’re selling on Amazon, not creating your own independent storefront.
Choose Shopify if:
You want to build a strong, independent brand: You have complete control over your store’s design, customer experience, and branding. This is your website, not a listing on a marketplace.
You want to own customer relationships: You collect customer data directly, enabling you to build email lists, remarket, and foster loyalty without Amazon as an intermediary.
You desire higher profit margins (potentially): While you have to drive your own traffic, you avoid Amazon’s high referral fees (typically 8-15% of the product price, plus FBA fees).
You sell unique, niche, or high-value products: Where brand story and customer experience are crucial.
You want full control over your pricing and promotions: You’re not competing in a race to the bottom with other sellers on a product listing page.
You want direct SEO control: You can optimize your Shopify store for search engines like Google to attract organic traffic.
My Take:
Who is Shopify's Biggest Competitor?
Direct E-commerce Platform Competitors (Hosted): BigCommerce is often considered its closest direct competitor, offering a similar hosted, all-in-one solution but often favored by larger businesses due to more robust built-in features and lower transaction fees (on higher plans).
Open-Source E-commerce Competitors (Self-Hosted): WooCommerce (running on WordPress) is arguably its most significant competitor in terms of market share and capabilities, offering more control and customization at the cost of technical responsibility.
Marketplaces: Platforms like Amazon and Etsy are also competitors, though they represent a different business model (selling on a marketplace vs. building your own store).
Website Builders with E-commerce: Squarespace, Wix, and Weebly also offer e-commerce functionalities, competing for the market of small businesses and individuals who want simplicity.
What Exactly is Shopify Used For?
Why Do People Use Shopify Instead of Amazon?
Brand Building: On Shopify, you create your own unique brand experience. Every aspect of your store, from design to communication, reinforces your brand, not Amazon’s. On Amazon, you’re a seller on Amazon’s platform, and the customer’s primary relationship is with Amazon.
Customer Ownership: Shopify allows you to directly collect customer data, build email lists, and foster direct relationships. This is crucial for repeat business, loyalty programs, and targeted marketing campaigns that aren’t possible when selling on Amazon.
Higher Profit Margins (potentially): While you have monthly fees with Shopify, you avoid Amazon’s referral fees (a percentage of every sale) and potentially FBA fees, which can significantly impact your net profit per item. You control your pricing entirely.
Full Customization: Your Shopify store is yours to design and customize. You have far more creative freedom than you do with an Amazon product listing page.
Diversified Sales Channels: A Shopify store acts as your central hub, allowing you to integrate with various other sales channels (social media, Google Shopping, other marketplaces) while maintaining a consistent brand presence.
No Direct Competition on Product Pages: On Amazon, your product listing often appears alongside competitors selling the exact same item, leading to intense price competition. On Shopify, your store features only your products.
Is Shopify Actually Worth It?
Simplifying Complexities: It removes the technical headaches of hosting, security, and maintenance, freeing you to focus on your core business.
Speed to Market: You can launch a professional-looking online store quickly, often within a day or two.
Scalability: It’s built to handle growth, from a few orders a month to thousands, without you needing to worry about server infrastructure.
Rich Ecosystem: The vast App Store and theme library allow you to add almost any functionality you can imagine.
Reliable Support: 24/7 customer support is invaluable for new merchants facing unexpected issues.
