How to make money on Shopify: A guide

Shopify offers all you need to set up and run an ecommerce business. You can buy a domain name, build a site, process payments, run marketing campaigns, and more. There are a huge range of options to build and develop your business with Shopify, and different pricing plans to offer value as your business matures.

This guide gives an overview of how Shopify works, including getting set up, and the fees you’ll need to think about.

Jump straight to:

• What is Shopify, how does it work and what you can sell
• How to start selling with Shopify
• Shopify seller fees
• How you receive money from Shopify, and what are the fees
• An alternative way to receive money from abroad

International payments for businesses

Doing business internationally could also mean you have to pay suppliers abroad, or receive money from overseas clients or customers.

One way to manage these payments is with your bank. However, there are alternatives, and one of these alternatives is Wise.

With Wise Business you can easily make international payments for a low, transparent fee. Your money will be converted with the real, mid-market exchange rate, with no markup or hidden fees.

If you have international customers or clients, you can also receive payments in EUR, USD, GBP, AUD and NZD if you open a Wise multi-currency account. In this account you can manage, in total, over 40 currencies, and converting money between these currencies also happens with the mid-market rate.

Sign up for your free Wise account, and start saving!

What is Shopify?

Based in Canada, Shopify offers ecommerce software to help clients all over the world build their own online stores¹.

The idea was born when the founders tried to set up their own snowboard sales site, but found the ecommerce software solutions available didn’t give them the functionality they needed. They built their own sales site, and now other (small) business owners can access the Shopify technology to get an online store set up quickly. Once you have a Shopify store, you can access lots of extra help such as marketing information and integrated apps to reach more customers².

How does Shopify work?

Shopify lets customers build smart and functional webstores, to promote and sell their own goods, or work with dropshippers to have items independently sent to their buyers.

You’ll set up your business website using the tools available on Shopify, including generating a logo and buying a domain name. You can then list your inventory, take payments, market and manage your store using the Shopify systems. Users can either buy a full end to end service from Shopify, or choose and pay for individual elements of the support they offer².

What can you sell on Shopify?

You can use Shopify to build a store to sell products you make or which come from suppliers you’re already working with. Or, if you’re not sure what to sell, you can choose to set up your store as a dropship operation, using the Shopify partnership with Oberlo.

Oberlo allows you to select items to sell in your Shopify store, and will then take control of the warehousing and delivery of the products, for a fee. This leaves you free to focus on marketing your website and connecting with your customers³.

How to start selling on Shopify: Step-by-step

Shopify makes it easy to get started with ecommerce⁴. Here’s what you need to do.

• Pick a business name and generate a logo using the shopify tools⁵
• Get a custom web address and start to build your website and online store. You can get free photos to help, and use either a free or paid Shopify theme as a framework⁶
• Add your product listings, either featuring your own items or those you’ve sourced via Oberlo for dropshipping
• Market your website using Shopify’s tools - you can automate email marketing and create social media ads for example⁷
• Manage your business through the Shopify dashboard, which hold all the information you need to see how things are going²

Shopify offers a broad range of products and services, and this walkthrough highlights only a few of them. For example, you can also get Shopify tools to help you take payment if you choose to sell in person at markets and fairs, add a Shopify buy button to an existing website⁸, and get lots of business advice and insights from the online learning tools².

Browse the Shopify website to learn more about the options available.

What are the Shopify selling fees in Canada?

There are some fees you’ll want to know about before you set up your shopify business. Here are the key charges to consider for three of the most popular Shopify plans⁹.

How do you receive your money from Shopify?

Shopify encourages users to use Shopify Pay to process payments, as they say it’s the most simple way to accept online payments. If you choose to do this, payments will be made from your Shopify merchant account to your linked bank account within about 3 business days¹⁰. The money will take a few days from payout to arriving in your normal account, the exact amount of time it can take depends on your bank.

You can also choose to use other payment providers to process payments through your Shopify store¹⁰. In this case, the process for receiving money, and the timelines involved, may vary. If you choose to use PayPal for example, your money may be transferred into your PayPal account first, before you can withdraw it to your normal bank account. Check the options for different payment processing services before you decide which will suit you best.

What are the fees?

If you use Shopify Pay to process payments on your website, you’ll pay a fee, which is set out in the table above. The costs vary depending on whether the payment is made using a local or foreign card, or in person⁹.

If you don’t use Shopify Pay, you can choose a different third party payment provider. In this case the third party may have their own charges, and Shopify will also deduct a charge which varies according to the Shopify plan you choose⁹.

What’s Shopify’s exchange rate, in case your customers pay in a foreign currency?

If you use Shopify Pay to process payments, you can set your Shopify store to receive payments in foreign currencies instead of Canadian dollars¹¹.

It might make sense to take payments in British pounds if most of your customers are based in the UK, for example. In this case, your customer will pay in pounds, and Shopify Payments will convert the payment into Canadian dollars before it is released to your linked bank account¹².

If you choose to do this, you’ll be able to see the currency conversion fee and exchange rate within your Shopify admin pages. Shopify converts the received money to your pay-out currency with the mid-market rate and charges a currency conversion fee¹³.

Shopify Pay does offer the option of payouts in US dollars if your store is located in Canada, so if you sell to the American market, you may be able to charge customers in US dollars, and then receive payments to a US dollar denominated account. You can then look for the best deal on currency conversion yourself, rather than taking the Shopify rate automatically¹⁴.

What’s an alternative to receive money from abroad?

If you’re using your Shopify account to sell overseas and want to receive payments from abroad, you’ll need to use Shopify’s Payment services, or choose a third party provider which can process international payments for a reasonable fee.

One option if you’re working with international customers, is to use a multi-currency account to receive and convert currencies. If you’re interested in this, check out the Wise multi-currency account, which comes with local bank account details for the euro area, US, UK, Australia and New Zealand.

All currency conversion with Wise is done using the mid-market exchange rate, with no hidden fees. You can receive customer payments, and pay suppliers across the globe, while saving money on international transfer charges.

Check out Wise’s fees, and see if you can save

If you’re looking for a straightforward way into ecommerce, setting up an online store with Shopify could be it. Take some time to explore the different options before you get started, to make sure you’re getting the best possible deal on fees.

Sources used for this article:
1.About Shopify
2.Shopify features
3.Shopify with Oberlo
4.How to get started
5.How to create logos
6.Themes for your online store
7.Help with marketing for your store
8.Sell everywhere
9.Shopify pricing
10.Getting paid
11.Sell in multiple currencies
12.Currency conversions
13.Payment processing and conversion fees
14.Selling and getting paid in different currencies
*Sources last checked on May 22, 2020