How Shopify Works: A Simple Guide for Beginners

Starting an online business can feel overwhelming, especially if you are new to e-commerce. From building a website to accepting payments, managing products, shipping orders, and marketing your store, there’s a lot to figure out. That’s where Shopify comes in.

Shopify is an all-in-one commerce platform designed to make selling online and in person simple, even for beginners. Shopify powers around 12% of all US e-commerce and served 875 million shoppers in 2024, with merchants generating over $1.4 trillion in total sales. Trusted by well-known brands like Gymshark, Heinz, SKIMS, and Kylie Cosmetics, Shopify is used by both small startups and global companies.

Whether you want to launch a small online store, start dropshipping, sell on social media, or grow a large brand, Shopify provides the tools to help you get started and scale. This guide explains how Shopify works step by step, in simple terms, so you can decide if it’s right for you.

What Is Shopify?

Shopify is an easy-to-use online platform that helps people create and run their own store to sell products online or in person. It solves common problems like building a website without coding, accepting secure payments, managing products and orders, and selling on different channels such as websites, social media, and physical stores.

Shopify is used by many types of businesses, including beginners starting their first online shop, small businesses, dropshipping stores, brick-and-mortar shops that want to sell online, and even large brands selling to customers around the world. It’s designed to be simple, beginner-friendly, and flexible as a business grows.

How Shopify Works? Step by Step Guide

1) Start Your Store (Trial)

1) Sign up for a Shopify free trial.
2) Log in to your store using the Shopify admin dashboard.

2) Add Your Business Basics

In your admin, enter important store details that affect checkout and daily operations:

1) Store name and legal business name.

2) Business address.

3) Billing information.

4) Default currency.

5) Default weight unit (used for shipping calculations).

6) (Optional) Create staff accounts if you work with a team.

3) Build Your Storefront (What Customers See)

1) Add products from the Products section.

2) Choose a theme and customize your store’s design.

3) Set up a domain so customers can find your store (purchase a domain or connect one you already own).

4) Group products into collections if needed.

4) Set Up How You Get Paid

To accept payments at checkout:

1) From your admin, go to Settings > Payments.

2) Select a payment provider.

3) Complete the setup steps and activate the provider.

4) Only the store owner can add or change payment providers.

5) Set Up Delivery, Taxes, and Policies

Configure the main settings that make checkout work properly:

1) Shipping rates and delivery zones.

2) Local pickup and local delivery options (if offered).

3) Taxes.

4) (Recommended) Add store policies such as refunds and returns so customers know what to expect.

6) Test, then launch

Before opening your store:

1) Use the setup checklist to test your online store.

2) Remove password protection when you are ready to go live.

7) Grow (optional, after launch)

1) Add additional sales channels (such as social media platforms).

2) Install apps from the Shopify App Store to add more features.

3) Promote your store through marketing and campaigns.

How Do Shopify Handle Products and Inventory?

1) Products Live in Your Shopify Admin

You create, edit, and manage products from the Products section in your admin. Inventory is linked to product variants, such as different sizes or colors. Each variant has its own inventory count.

2) Inventory = The Quantity Available for Sale

In Shopify, inventory refers to the number of units of a product that are available for sale. Each product variant, such as a specific size or color, has its own inventory count. Proper inventory management helps prevent overselling, ensures you know when to restock or produce more items, and makes it easier to identify excess stock.

3) Where You Manage Inventory

You can track and update your inventory directly from the Inventory page in your Shopify admin. Shopify also provides inventory history and reports, which allow you to review stock changes over time and monitor overall inventory performance.

4) Multiple locations: inventory is tracked per location

If you store products in more than one location, Shopify tracks inventory separately for each location. This means each location can have different stock quantities for the same product or variant. You can assign specific products or variants to certain locations, and Shopify keeps inventory records for each location independently. When an order is placed, fulfillment is handled based on your location priority or shipping rules. Inventory levels can be updated directly from individual product pages or by using the bulk editor in your Shopify admin.

5) POS (In-person Selling) Uses the Same Product + Inventory System

Products created in the Shopify admin are used for both online and in-person sales. This means the same product and inventory data is shared across your online store and Shopify POS. Inventory can be managed from either the Shopify admin or directly through Shopify POS. In Shopify, locations represent physical stores, warehouses, or apps where inventory is stored or orders are fulfilled.

6) SKUs (Optional) Help You Manage and Find Items

SKUs are internal product identifiers used to organize and track products. While SKUs are optional, Shopify recommends using the same SKU for each product variant across all locations when managing inventory in multiple locations. This makes inventory tracking more consistent and accurate. Products can be quickly searched and managed using their SKUs in both the Shopify admin and Shopify POS.

How Payments Work on Shopify?

1) You connect to a Payment Provider (So Customers Can Pay at Checkout)

A payment provider allows customers to pay securely at checkout. Shopify supports:

1) Shopify Payments (available in selected countries)
2) Third-party payment gateways

2) You Set Up (And Activate) Payments in Your Shopify Admin

To add/enable a payment gateway:

1) Go to your Shopify Admin.

2) Click Settings > Payments.

3) Choose your payment provider.

4) Enter the provider account credentials and follow setup instructions.

5) Click Activate to start accepting payments.

Important: Only the store owner can add or change a payment provider.

3) You can also Add “Additional Payment Methods” Via Apps

If you use extra payment methods:

1) Go to Settings > Payments.

2) Under Additional payment methods, click Add payment methods.

3) Select a provider or app and activate it.

4) Open the app to connect to your external account.

5) Activate again once the setup is complete.

6) The payment method will then appear at checkout.

4) You Choose How Payments are Captured/Authorized

After you activate your provider, you can choose how you want to capture and authorize payments when customers buy from your store and then configure checkout so you can process orders.

How Do Orders and Shipping Work on Shopify?

1) Orders come into your store

When a customer makes a purchase from your online store or any connected sales channel, the order shows up as a new entry on the Orders page in your Shopify admin. From the Orders section, you can handle everything related to the purchase, such as processing payments, checking order details, and getting items ready to ship. You can also make changes, issue refunds, or cancel orders if necessary.

2) You Set Up Shipping + Delivery Options (What Customers See at Checkout)

Shipping and fulfillment settings are managed from the Shipping and delivery section in your Shopify admin. These settings determine:

1) How are shipping fees calculated?

2) Which delivery options can customers choose at checkout?

3) Which locations are used to fulfill orders?

3) Core Shipping Setup (The Main Building Blocks)

When setting up shipping in Shopify, you usually configure:

1) Fulfillment locations (where products are stored and shipped from), so shipping rates are calculated correctly based on the shipping origin.

2) Shipping profiles to group products with similar shipping needs, so the correct rates apply automatically.

3) Shipping zones and rates (where you ship and how much you charge) to ensure accurate shipping costs at checkout.

4) Packages (box sizes and weights) so carriers can calculate accurate rates at checkout and when buying shipping labels.

5) Optional carrier accounts to show real-time shipping rates at checkout and purchase labels directly in your admin.

4) Fulfillment = Pick, Pack, Ship (How You Get Orders Delivered)

Once an order is ready, fulfillment means selecting the items, packing them, and shipping them to the customer. You can fulfill orders by shipping orders yourself. Also through using a third-party fulfillment app or using a fulfillment service like the Shopify Fulfillment Network.

5) Shipping Labels and Tracking

Shopify lets you purchase and print shipping labels directly from your admin using integrated carriers. This simplifies fulfillment, provides tracking details to customers, and saves time, such as avoiding trips to the post office. If you handle fulfillment yourself, you pack the order, attach the label, and either drop it off or arrange a carrier pickup, depending on the carrier.

6) Order Processing Settings (Automatic Vs Manual Fulfillment)

Shopify allows you to choose between automatic and manual fulfillment. Once an order is fulfilled, the customer receives a shipping confirmation email, and the order Fulfillment Status updates to show it has been fulfilled.

Not sure where to start or want things done the right way from day one? The Shopify experts at Shine Dezign Infonet can help make the entire process much easier.

How Do Shopify Themes and Design Work?

What are Shopify Themes?

A Shopify theme controls the look, layout, and overall shopping experience of your online store. Different themes are created to suit different types of products and storefront styles. You can browse and choose themes from the Shopify Theme Store, which offers both free and paid options.

Free Vs Paid Shopify Themes

How To Add Free Themes Vs Paid Themes?

Adding a Free Theme (From Your Admin)

1) Go to Online Store > Themes in your Shopify admin.

2) In the Free themes section, click Explore free themes.

3) Preview the theme and click Add.

Trying a Paid Theme (From the Theme Store)

1) Visit the Shopify Theme Store and select a paid theme.

2) Click Try theme to add it as a trial theme.

3) In your admin, go to the Online Store > Themes.

4) In the Theme library, open the theme action menu and click Preview.

5) Customize the theme during the trial; if you purchase it, your changes remain saved.

Basic Customization Options (What You Can Change)

Shopify themes can be customized using the theme editor, and most changes can be made without any coding. From the theme editor, you can adjust global design settings that apply across your entire store, including fonts and typography, color schemes, social media links, and cart page settings. You can also edit page layouts and content using sections and blocks, which allows you to add, remove, or rearrange content as needed. This setup makes it easy to control both design and layout while keeping everything organized and simple to manage.

Where to Access the Theme Editor?

1) Go to Online Store > Themes in your Shopify admin.
2) Next to the active theme, click Edit theme.

How Do Shopify Apps Work?

Shopify apps are extra tools you can install to:

1) Grow and manage your business.

2) Connect Shopify with external services.

3) Add new features to your Shopify admin.

Apps are available in the Shopify App Store. Most apps are created by third-party developers rather than Shopify itself. Shopify also allows custom apps, which can add special features to your admin, access store data through Shopify APIs, or connect your store to other platforms using custom storefronts.

How to Install a Shopify App?

1) Sign in to the Shopify App Store.

2) Search for an app you want to use.

3) On the app’s page, click Install.

4) In your Shopify admin, approve the app by clicking Install again.

5) Once installed, you can access and use the app from the Apps section in your admin.

How To Choose the Right App (A Simple Checklist)?

When picking an app from the Shopify App Store, ask:

1) What does my store need outside of Shopify’s core features?

2) What would increase sales? (for example, SEO or marketing)

3) What would make managing the store easier? (for example, bulk printing shipping labels)

4) How much do I want to spend on apps?

After installation, you access them from the Apps area in your Shopify admin.

If the apps in the Shopify App Store don’t fully match your business needs, a custom Shopify app can be a better option. Shine Dezign Infonet builds custom Shopify apps tailored to your store’s workflow, integrations, and growth goals.

Understanding Shopify Pricing

How Shopify Supports Marketing and Sales?

1) Built-in Marketing Tools in Your Shopify Admin

Shopify includes built-in marketing tools that you can access from the Marketing section of your admin. This area lets you view key performance metrics and see which marketing channels are driving results. You can also create, manage, and automate marketing campaigns directly from your admin, making it easier to promote your store and track performance in one place.

2) Campaigns and Automations (To Boost Sales)

Campaigns help you plan, organize, and track multi-channel marketing efforts around a specific goal, such as promoting a product or running a sale across ads and social media.

Marketing automations help turn visitors into customers automatically over time. Both are managed by the Marketing section in your admin.

3) Email, SMS, and List Growth (Shopify-built Tools)

Shopify offers built-in tools that work together, including:

1) Shopify Messaging: create branded email campaigns and automated messages that link directly to products.

2) Shopify Forms: collect customer information and email signups using pop-ups or embedded forms (including B2B inquiries).

3) Customer segments: group customers (such as by location) to send more personalized messages.

4) Shopify Flow: an optional tool for creating marketing and business automations.

4) Promotions That Drive Traffic and Sales

Shopify allows you to run different types of promotions to attract customers and increase sales. You can set up seasonal sales to align with holidays or special events, as well as flash sales that run for a limited time to create urgency. These promotions can be managed directly from your Shopify admin and applied across your products or collections.

5) SEO and Store Visibility

If you sell through an online store, Shopify recommends improving SEO so customers can find your store through search engines and social media.

6) Selling on More Channels (To Increase Sales)

Shopify lets you sell on multiple sales channels. A sales channel is any platform where you sell products, and connecting these channels to Shopify helps keep products, orders, and customer data organized in one place.

How Shopify Works for Dropshipping?

With Shopify, dropshipping lets you sell products online without keeping inventory or handling shipping yourself. Instead, you work with suppliers who ship orders directly to your customers on your behalf. These suppliers can be manufacturers, warehouses, or even individuals producing items from home.

Dropshipping Basics (What You Do Vs What the Supplier Does)

You (The Store Owner):

1) Select products to sell and promote them.

2) Manage the online store and checkout.

3) Handle customer support and order updates.

Your Supplier:

1) Stores or produces the products.

2) Packs and ships orders directly to customers.

How Do Shopify Connects with Suppliers?

Shopify makes it easier to find and work with suppliers by supporting:

1) Dropshipping and print-on-demand apps that connect you with suppliers.

2) Supplier integrations through third-party apps in Shopify’s ecosystem, often used to simplify product sourcing and supplier management.

Order Flow in a Dropshipping Store (Step by Step)

When a customer places an order, the process typically works like this:

1) A customer places an order in your store.

2) Order details are sent from the customer to your Shopify store and then to the supplier.

3) The supplier picks, packs, and ships the product directly to the customer while keeping your store’s branding.

4) You continue managing customer service and order tracking.

Common Dropshipping Trade-Offs to Plan For:

1) Less control over product quality and branding since you don’t handle inventory.

2) Orders with items from multiple suppliers may arrive at different times.

Is Shopify Right for Beginners?

Yes, Shopify is a beginner-friendly platform as it offers an initial setup guide with step-by-step tutorials for the main tasks you need to complete before you start selling, plus a printable setup checklist to track progress. You can start with a free trial.

Pros of using Shopify (what you get built-in)

Core Selling Tools in One Platform: Tools to showcase products online, process payments, and run your store (features vary by plan).

Themes For Store Design: Access to free and paid themes, such as the Yuva theme and the Fame theme, from the Shopify Theme Store.

Apps to Add Features: Access to free and paid apps from the Shopify App Store to expand store functionality.

Payments Option: Shopify’s own payment provider (Shopify Payments) to accept card payments.

Ways to Sell / Growth Options: Growth opportunities using Shopify sales channels, plus a Plus plan for higher-volume stores (for example, to decrease third-party transaction fees).

Marketing and Education Resources: A Shopify blog offers guides and articles to help you run your store more effectively and connect with customers, while built-in features like discount codes on all plans and abandoned checkout recovery with automatic, customizable emails help drive conversions and boost sales.

Store features available on plans (examples called out in plan docs): Online store creation and customization are handled directly in the Shopify admin using the built-in theme editor (available on the Basic plan or higher), with SSL certificates providing secure HTTPS connections, along with access to reports and international sales tools as outlined in the plan documentation.

Common Limitations / Things to Be Aware Of

Feature Availability Depends On Your Plan: Shopify notes that what’s available can vary based on the pricing plan you choose.

Some Features Are Product/App-specific And Have Limits: For example, the Shopify Bundles app includes limitations (such as bundle component limits, option/variant limits, and channel support restrictions).

When Shopify Is a Good Fit Vs. When It Isn’t?

Shopify works well if you want:

1) A complete platform to build, design, and manage an online store.

2) Built-in tools like discounts, abandoned checkout recovery, and reporting.

3) The ability to grow through sales channels and upgrade plans as your business scales.

Shopify may not be ideal if:

1) You need a specific feature not included in your plan and don’t want to upgrade.

2) You rely heavily on an app or feature with known limitations.

What Do You Need to Start a Shopify Store?

Before you begin setting up your store, Shopify recommends you get clear on your goals, such as whether you will sell:

1) Online only or online + in person.

2) Through social media sales channels (for example, Facebook, Instagram, etc.).

You should also think about which pricing plan you will need, but you don’t have to choose a plan until the end of your trial.

Business Details You Will Need to Enter in Shopify:

To set up your store (before adding products), you will need to provide key information about you and your business, including:

1) Store name and legal business name

2) Business address

3) Billing information

4) Default currency

5) Default weight unit (used for store listings)

6) (Optional) Staff access

Core Store Setup Items You Will Need to Configure:

From your Shopify admin, you will also typically set up:

1) Shipping settings

2) Pickup and local delivery (if you offer them)

3) Taxes

4) Payment gateways

5) Domain (so customers can find your store online)

Shopify also suggests exploring the Shopify App Store if you need extra features.

Optional (if You are Selling in Person):

If you plan to sell in person using Shopify POS, you will need to decide:

1) What hardware you need (availability varies by region)?

2) Which Shopify POS plan is right for your business?

Conclusion

Shopify makes selling online approachable by bringing everything you need into one platform, from building your store and managing products to accepting payments, shipping orders, and marketing your business. Its beginner-friendly tools, flexible plans, and wide app ecosystem make it suitable for individuals just starting out as well as businesses planning to scale. Whether you want to sell online, in person, or across multiple channels, Shopify adapts as your needs grow. By understanding how Shopify works, you can confidently decide if it’s the right solution for your business and take the first step toward building a successful online store.