Shopify

Deciding to raise prices is a nerve-wracking decision for business owners. You’ve worked hard to build a customer base, and the last thing you want to do is to upset or even lose customers by charging more for your offerings. But in this economic climate—where rising costs and inflation increase expenses ranging from supplies to shipping and salaries—a strategic price increase can be important for your business’s survival and sustainable growth.

Understandably, many companies hesitate to raise prices for goods and services. But when handled correctly, a price change can strengthen your business, improve your cash flow, and even reinforce your product or service’s value. Keep reading for tips on how to increase prices and communicate your new rates to customers both thoughtfully and effectively.

Why do businesses decide to raise prices?

A price increase is rarely a random decision. For most small businesses, revisiting their decision to raise prices can stem from one (or several) of the following factors:

Your costs have increased

During the past few years, many businesses have encountered significant cost increases, whether for raw materials, higher subscription prices for software used to provide professional services, or more expensive gas for a delivery van. These higher costs directly affect profit margins. If you don’t adjust your prices to absorb these expenses, you will eventually have lower profits or start to lose money. A careful review of your business expenses will show if your gross margin is shrinking, signaling an urgent need for a price increase.

You offer increased value

Has your service quality improved? Have employee skill levels advanced through training? Perhaps you’ve added more services or products. Think of a software offering with a new suite of powerful analytics tools, for example, or a house cleaning service that switched to premium, eco-friendly products. When you deliver more value, your price should reflect that. Clients are generally willing to pay more when they feel like they are getting more for their money.

Your market has shifted

Your business doesn’t exist in a vacuum. It’s crucial to conduct regular market research to see what other businesses charge for similar goods and services. If your competitors are raising prices and you aren’t, you might be undervaluing your offerings. A significantly lower price could also imply lower quality to new customers who aren’t familiar with your brand. Adjusting your price to match the market average can help you stay competitive and properly position your brand.

Your market demand is outpacing supply

If you are turning away clients because you’re fully booked or selling out of your products, it’s often a sign of high demand. This gives you leverage to raise your price. The new price point will filter out clients who are more price-sensitive, which could lighten your workload and let you dedicate more time, energy, and resources to your remaining clients at higher prices.

You want to boost profit margins

Sometimes, the goal is simply to improve the financial health of your business. Growing profit margins are vital for reinvesting in a business, hiring, expanding your service or product offerings, and creating a cash reserve for leaner times. A well-planned price increase can improve your bottom line and revenue, giving you the financial freedom to expand.

Best practices for price increases

1. Monitor the financial impact
2. Add more value to justify the cost
3. Communicate transparently
4. Segment your audience
5. Revise your offerings to add value
6. Train sales and service teams
7. Implement gradually
8. Offer a choice or a last chance

Once you’ve decided to increase prices, it’s all about how you execute the change. A poorly handled price change can lead to alienating customers, while a thoughtful plan can reinforce the value of your brand. Here are eight best practices to help you roll out new prices effectively.

1. Monitor the financial impact

Before announcing anything, run the numbers and calculate how the price increase might affect your revenue, gross margin, and profit. Model different scenarios. For example, what happens to your bottom line if you lose 5% of your customers but the remaining 95% pay the higher prices? This analysis can help ensure that your pricing strategy is built on data, not guesswork.

2. Add more value to justify the cost

One of the best ways to soften the impact of a price increase is by enhancing your offerings. Can you ensure more services are included in your package? Can you improve your customer support? You can also frame it as an investment in a better experience—for instance, by explaining that the new price allows you to provide faster shipping, use higher-quality ingredients, or offer more responsive customer support. Or, tell your customers that it’s the best way to ensure you keep delivering the products they know and want without having to change the products themselves. Connecting the higher cost to tangible benefits may make it an easier pill for customers to swallow.

3. Communicate transparently

Don’t surprise your customer base. Give customers ample notice—say, 30 to 60 days—before the new rates take effect. Craft a clear, honest message that explains why the price is changing. Here, you can point to rising costs or investments in service quality. Thank your loyal customers for their business, and acknowledge the challenges this may bring for them. Honesty is a great way to build trust and show respect.

4. Segment your audience

A one-size-fits-all price doesn’t necessarily work, because customers have different needs, budgets, and relationships with your brand. By segmenting your audience, you can tailor the price change in a way that feels fair and strategic, minimizing churn while maximizing revenue.

Consider grouping customers by more than their price sensitivity. Here are a few commons ways to segment, along with different price increase approaches for each:

• Longstanding customers. These clients value their relationship with your brand, and it’s wise to acknowledge that relationship during a price change. If you run a subscription or contract-based business, letting customers lock in their current price for an additional six to 12 months rewards their commitment. If you sell individual products or ad-hoc services, offer a different kind of loyalty reward, such as a one-time discount code, a store credit or gift card, or a complimentary bonus product or service.
• High-volume clients. For customers who purchase frequently or in large quantities, a price hike can feel punishing. Instead, you could introduce volume-based discounts or tiered pricing. This softens the impact by rewarding customers for larger purchases.
• Budget-conscious or basic users. A price increase on your main offering is the perfect opportunity to introduce a new, lower-cost tier with fewer features. This can help you retain price-sensitive customers who might otherwise leave, while simultaneously increasing the value and price of your standard and premium packages.

5. Revise your offerings to add value

Instead of applying a uniform price hike to your existing products, use this as an opportunity to rethink how you sell. By restructuring your offerings, you can provide more options that justify the new cost and give customers greater control. The best approach depends on your business model.

• Service or subscription-based businesses. A classic strategy is to introduce pricing tiers. This allows you to create a basic package at a similar, accessible price point while creating new deluxe or premium tiers with more features, faster service, or a higher level of support, for example.
• Product-based businesses. This can include retail, beauty, and ecommerce businesses. While formal tiers may not fit as readily in this model, you can achieve the same result with two key strategies: creating product bundles and introducing a premium line, or a new, higher-end version of a popular product.

6. Train sales and service teams

If you have customer-facing employees, they will be on the front lines, answering the toughest questions. To set them up for success and ensure a consistent message, proactive training can help.

Here’s how to make that happen:

• Create a price increase playbook. Develop a simple one-page document that includes key talking points and an FAQ. The talking points should positively explain the reasons for the increase, while the FAQ should anticipate common objections and provide empathetic, approved responses.
• Conduct role-playing sessions. Practice is the best way to build confidence. Run training sessions where managers play the part of different customer personas—from angry and confrontational to unhappy and disappointed. Your team can practice their responses in a low-stakes environment, so they aren’t caught off guard during a real interaction.
• Empower them with preapproved solutions. Define what your team can offer when a valuable, long-term customer is upset. Can they offer a one-time 10% discount to ease the transition? A small service credit for their next purchase? Giving your team a limited set of tools empowers them to solve problems, turning a potentially negative experience into an opportunity to reinforce a customer’s loyalty.
• Implement a shadowing system. For the first few weeks after the announcement, pair less experienced employees with managers or senior staff. This gives them the opportunity to see firsthand how seasoned team members handle difficult conversations and provides them with immediate backup if a situation escalates.

7. Implement gradually

If a significant hike is necessary, consider rolling it out incrementally. A 5% price increase this year and another 5% increase next year, for example, may be more palatable than a single 10% jump. This strategy is particularly effective for any business with a subscription, retainer, or contract-based model, giving clients valuable budget certainty.

8. Offer a choice or a last chance

Give existing customers some options by letting them renew their subscription at existing rates or buy multiple products at the current price point before the change takes effect. This could even create a sense of urgency, boosting short-term sales and making people feel they got a good deal (which is great for keeping customers happy). You could also provide a small discount to incentivize a larger commitment at the new rate—whether it’s by prepaying for a full year of service or by purchasing products in bulk.

As a customer, you want your brand experiences to feel cohesive and uniform, whether you’re visiting a store, making a purchase online, or browsing a company’s website or Instagram page. As a business owner, creating a connected customer experience can help you deliver that same seamless interaction for your own customers.

Research suggests that 83% of customers are more loyal to brands that provide consistent customer experiences across departments, customer service channels, and platforms, and 78% of customers say they have used multiple channels to make a purchase. These numbers reveal clear purpose and opportunity to develop a connected customer experience strategy that builds meaningful interactions and customer loyalty.

What is connected customer experience?

Customer experience is the sum of all interactions a customer has with your brand, from the moment of discovery to after-sales customer support. A connected customer experience means creating a connected experience between in-store and online shopping, as well as interactions with your company’s teams, services, branding, and marketing.

Understanding the customer journey is essential to building an effective and resonant experience for shoppers. Your customer experience improvements should be informed by every step a shopper takes when they engage with your business. The journey begins the first time they see your brand on their social media and continues through their initial purchase, potential engagement with your customer service representatives, and staying in touch after a sale.

7 key components of connected customer experience

1. Customer journey mapping
2. Integrated communications channels
3. Personalized customer interactions
4. Consistent branding
5. Standardized customer service
6. Customer data integration
7. Inventory management

There are several key components needed to building connected customer experiences, including:

1. Customer journey mapping

A customer journey map is the blueprint for every potential interaction a customer will have with your business, including when a customer develops awareness of your brand, considers your product, purchases a product, engages with customer service, and, ideally, establishes brand loyalty. It connects real customer data to buyer personas that help you understand who your customers are and what they want.

Customer journey maps can also help you identify customer pain points. For online businesses, you can’t see your customers in action. “You can’t see what somebody looks like behind the screen,” direct-to-consumer (DTC) marketing expert Nik Sharma says on an episode of the Shopify Masters podcast. “But you can understand the type of person you’re going after and then build a pathway for them.”

2. Integrated communication channels

A connected customer experience requires integrated communication channels with cohesive messaging. Customers expect the same seamless, consistent experience, whether they’re reaching out via live chat customer service or a direct message on social media. Customer service channels should work in concert across all elements of the business, including customer data integration and inventory management, to ensure the most accurate, up-to-date information is being shared.

3. Personalized customer interactions

Personalizing your interactions with customers across every touchpoint can help them feel like you’re their friend. For example, ensure all emails include a personalized greeting and your website showcases product recommendations based on their past purchases.

Intimate apparel company ThirdLove, for example, uses information provided by customers through a bra-fitting assessment on its website to suggest products and offer discounts in personalized marketing emails.

4. Consistent branding

Guru, one of North America’s bestselling energy drinks, leaned into consistent branding as a core strategy. Carl Goyette, Guru’s president and CEO, and Shingly Lee, vice president of marketing, tell the Shopify Masters podcast that consistent Guru branding—including everything from its logo to marketing and messaging—was central to cultivating a clear voice and brand identity in a saturated market.

“In the world of marketing, focus makes you bigger, not smaller,” Shingly says. “Brands that try to be everything to everyone often end up being nothing to no one.”

5. Standardized customer service

Today’s shoppers can access customer service through contact forms on a company website, email, chat, call centers, or direct messages on social media platforms. Standardized interactions and communications across these channels create a familiar and seamless experience for customers.

This means ensuring all customer service employees follow the same script or language guidelines, not to mention policies. For Nick Pandolfi, co-founder of the ceramic company Jono Pandolfi Designs, this involved setting up the right infrastructure to support standardized practices.

“We had to get really clear on our policies and … set up a customer service ticketing system that allowed us to manage all of that,” Nick says on an episode of the Shopify Masters podcast.

6. Customer data integration

Personalized interactions and streamlined customer service may require collecting centralized customer data,  also known as customer data integration (CDI), and keeping it up to date in real time. CDI gathers disparate bits of customer information across platforms and purchases to create a profile that can help guide customer service agents.

CDI empowers customer service agents to quickly access information about the shopper, such as what they buy and their shipping address, without the customer needing to repeat it. It also allows agents to access and share information across customer communication channels.

For example, if a customer calls an agent to inquire about the status of a missing package, even if it was initially handled by another rep, all the background information is tracked in real-time and easily accessible in a centralized location to allow the rep to efficiently assist the shopper.

7. Inventory management

Communicating the status of deliveries across the entire shipment cycle—through emails, texts, or app push notifications—helps keep customers informed and connected. Sustainable fashion brand ANIÁN, for example, uses Shopify to track 10,000 SKUs across its supply chain for accurate, up-to-date monitoring of its products, so its customers can know where their packages are.

“Our supply chain is quite complex, but once everything hits our warehouse, it is logged by Shopify,” ANIÁN president Paul Long says. “Having all of the product details in the platform and up to date is super helpful, because when you ship a product across the border, you sometimes need to pull up all of that information. They need to trace that good all the way back to exactly where we made it. Shopify allows us to do all of that.”

Think of a business supply chain like a symphony. When every instrument plays in time, the result is smooth and harmonious. But when sales, inventory, and operations fall out of sync, you get a cacophony of unpleasant noise: under- or overstocking, wasted resources, and frustrated customers. That’s where understanding SIOP meaning becomes crucial—this structured process keeps everything in harmony.

Sales, inventory, and operations planning (SIOP) aligns sales forecasts with inventory levels and operational capacity, giving you the context you need to anticipate demand and maintain balance. Done well, SIOP helps ensure you’ve got enough stock to meet orders without tying up cash in excess product. It also ensures warehousing, transport, and distribution run efficiently. Companies with effective SIOP processes reduce inventory costs by 15% to 20%, while improving customer satisfaction by 25%.

Let’s break down how SIOP works, why it matters for your business, and how you can implement the process successfully.

What does SIOP mean?

Sales, inventory, and operations planning (SIOP) is a structured business process that aligns three critical elements of the supply chain: sales forecasts, available inventory, and operational capacity. Instead of treating these as separate silos, SIOP brings them together so businesses can balance supply with demand in real time. Effective SIOP planning allows you to predict customer needs more accurately, keep the right amount of stock on hand, and ensure operations—from production to distribution—can deliver without waste or delay.

“We’re always asking, ‘How many do we need? And when are we going to need more? And let’s not have too many,’” says John Thorp, co-founder and co-CEO of Aerflo. Based in Brooklyn, Aerflo makes a portable water bottle with a special carbonation capsule cap, so the user can make and drink fresh, fizzy water on the go. SIOP helps keep everything in line for Aerflo. The business manufactures bottles and carbonation device caps in Malaysia, and it fills and refills carbonation capsules in New Jersey. Its New Jersey warehouse is also where the Aerflo team picks and packs boxes and mails products directly to customers.

SIOP helps keep everything in line for Aerflo by coordinating production schedules overseas with capsule refills in the US, while also ensuring its New Jersey warehouse stays stocked to fulfill direct-to-consumer orders on time. By aligning sales forecasts with inventory levels and operational capacity, the company avoids overstocking bulky items in limited warehouse space.

Benefits of SIOP

Business owners who prioritize SIOP have a high chance of seeing important metrics trend upward for their companies. Here are a few that can yield a particularly high benefit from implementing this process:

Sales prediction accuracy

SIOP data gives business owners an understanding of purchasing history and the ability to better forecast how much they’ll sell in the future. By analyzing past sales trends alongside current market conditions, businesses can anticipate demand spikes or seasonal dips with greater precision. This helps prevent costly stockouts during high-demand periods and reduces the risk of tying up capital in unsold inventory. Accurate forecasting also shortens lead times and improves budget planning, giving companies more confidence in scaling operations and meeting customer expectations.

Supplier and inventory management

SIOP turns supplier coordination and inventory control into a competitive advantage. By syncing forecasts with vendor lead times and stock levels, businesses can sidestep last-minute shortages and avoid sinking cash into overstock. It sharpens negotiations with suppliers, ensures purchase orders go out on time, and keeps high-priority products flowing when customers need them most. That leads to a supply chain that runs on strategy—not guesswork.

Operational effectiveness

By aligning sales forecasts, production schedules, and inventory targets, every department plays in sync—no wasted motions and no missed beats. This coordination reduces bottlenecks, trims excess costs, and ensures operations move at the same rhythm as customer demand. When everyone follows the same process, your business delivers on time, with less waste and more consistency.

SIOP vs. IBP and S&OP

Although you might hear the terms SIOP, IBP, and S&OP used interchangeably, each process has its unique differences, albeit quite subtle. SIOP involves syncing sales forecasts, available inventory, and operational capacity.

Integrated business planning (IBP) expands the SIOP framework to include financial planning, strategic objectives, and the broader business context. If SIOP is tactical and operational, IBP is holistic and strategic—helping leadership teams align day-to-day supply chain decisions with the bigger picture of business growth and profitability.

Sales and operations planning (S&OP) is a two-way conversation between sales and operations: How much are we going to sell, and can we produce and deliver that amount? It gives businesses a way to reduce mismatches between demand and supply, but since it’s narrower than SIOP, it may leave blind spots around stock management.

Steps in the SIOP process

1. Gather data
2. Forecast demand
3. Plan for adequate supply
4. Meet with key stakeholders
5. Implement your SIOP process

Every business will orchestrate its SIOP process a little differently. Some will figure it all out with a few key players internally, while others will conduct an official analysis with an outside consultant. While each company has its own goals and objectives, here are the typical steps to set up an SIOP process for your business:

1. Gather data

Gather data and performance metrics on sales, inventory levels, and operations like delivery and warehousing. Doing so establishes which supply chain planning processes are working well or need improvement. Some might even be due for a total overhaul.

Some businesses use data from massive supply chain management or enterprise resource planning systems, while smaller companies might use Google Sheets or Excel to track inventory and sales, among other performance measurements. If you can afford a software solution, it can simplify and streamline this process while also ensuring greater accuracy than relying on manual entry methods.

2. Forecast demand

Businesses typically predict future demand based on purchases made over the past three years. Instead of just averaging sales figures, you might break the data down by seasonality or financial quarters, product categories, and even customer segments to see what influences demand. From there, you can use statistical models or demand-planning software to begin the planning process for the following year.

For a relatively new company like Aerflo, this process requires some trial and error. “For a company at our stage with a year-ish of information under our belt, forecasting is really hard,” John says. “The only thing that’s certain about a forecast is that it’s going to be wrong.” John notes that making projections with limited data requires a fair amount of manual intervention, adjusting order quantities on the fly. With time, as the company accrues data, its projections become more accurate.

To make forecasts more reliable, businesses often layer in outside factors, such as broader economic conditions, marketing campaigns, or planned product launches, which past data alone can’t capture. For example, if you sold 5,000 units of a product last December but know you’re doubling ad spend this year, your forecast should reflect that lift. The goal isn’t just to repeat what’s happened before but to anticipate what’s likely to happen under current and future conditions.

3. Plan for adequate supply

Ideally, supply always meets demand, but there are unpredictable factors and challenges when gauging manufacturing needs. The same goes for changes in turnaround times, order minimums, international regulations, and tariffs.

Aerflo prioritizes the essentials: “Rule number one for this company is never run out of capsules,” John says, since existing customers who bought their product can’t make their carbonated water if capsules sell out. “We try to be really strict about that.”

On the Malaysian supply chain side, Aerflo must order bottles by the tens of thousands. On top of that, its carbonation device caps require around 60 separate parts. If one of those suppliers fails to deliver, it impacts the entire Aerflo supply chain. That’s why crafting operational plans far in advance is essential: You need to ensure your supply can withstand hiccups.

To offset the possibility of stockouts, Aerflo keeps safety stock on hand. “For example,” John says, “we try to ship as much as possible by ocean, obviously. We often reserve a few thousand of whatever that thing is to make sure that we don’t have a hundred percent of our next round of inventory on a boat, inaccessible—in case sales pick up.” If needed, the brand can get additional product shipped out via air freight; it’s more expensive than shipping by sea, but it can help fulfill unexpected demand in a pinch.

4. Meet with key stakeholders

In a larger business, key department heads—from finance to quality control—will need to coordinate on SIOP needs. They might also participate in meetings with an expert consultant on a regular basis to evaluate and improve SIOP processes. For a smaller business, it’s still essential to engage key stakeholders across departments to discuss financial expectations, resources, sales projections, and operational management issues. Doing so monthly or quarterly, at minimum, is a best practice.

5. Implement your SIOP process

After you’ve gathered all this data and made plans, it’s time to implement your new strategy. That means taking corrective action to rectify any outstanding issues with supply or demand, as well as creating concrete strategies to achieve systemic solutions. Implementation also requires assigning ownership for each action item and setting clear timelines so you can track progress. Regular check-ins—monthly or quarterly—help keep everyone aligned, allowing you to adjust quickly if forecasts shift or new challenges arise.

Sales negotiations are structured conversations designed to turn a lead into a customer. Like any important business interaction, they rely on strategic planning—understanding what you need, what the other party values, and where there’s room to meet in the middle.

Effective sales negotiation techniques aren’t only about persuasion; they’re about aligning interests. Every sales deal hinges on balancing cost and value, customizing solutions to fit the customer’s needs, and delivering on promises to build long-term trust. Done right, negotiations feel like a win-win. Companies with strong sales negotiation skills achieve 18% higher deal values and close 23% more sales annually.

Let’s break down what sales negotiation is, explore proven approaches, and show you how preparation and communication can help you close more deals with confidence.

What is sales negotiation?

Sales negotiation is a crucial stage of the  sales process when buyers and sellers go back and forth to reach a mutually beneficial agreement. An effective negotiation ideally results in a sale and sets up a positive relationship with the customer moving forward. Successful sales negotiation is about ensuring customer satisfaction even when both parties drive a hard bargain.

Negotiation isn’t just part of selling to potential customers. It also plays a key role behind the scenes. In ecommerce or business-to-consumer (B2C) companies, there’s typically little to no direct negotiation with individual customers, since prices are fixed and usually non-negotiable. Instead, the companies use negotiation tactics when making wholesale deals with suppliers and securing procurement agreements.

There are many negotiation styles. Some sales teams have a win-at-all-costs mentality that can end up alienating as many customers as it brings in; others take a more measured approach in the hope the laid-back attitude curries favor with their target audience in the long term. How you negotiate depends on you and your business. Regardless, the goal is always to concede as little as you can while encouraging the other side to offer up as much as they’re willing to.

Sales negotiation skills worth cultivating

Teddy Roosevelt once said, “Believe you can and you’re halfway there.” He might not have been a sales rep, but he knew a thing or two about winning people over and projecting confidence. Luckily, you don’t need Roosevelt’s charisma to get what you want.

You just need a few key sales negotiation skills:

Active listening

During the sales negotiation process, always show the other party you understand their point of view. Pay attention to what the buyer is saying, but also to what they might be implying—their underlying concerns, motivations, or hesitations. If you can articulate their perspective as clearly as they can, they’ll see you as a partner, not an adversary.

Ask follow-up questions to show you’re listening to the other party’s perspective and to dig deeper into issues they’re facing. Empathy and communication skills go a long way in the negotiation phase. Make sure you’re truly understanding your buyer’s pain points and goals, and you’ll build rapport that will last.

Confidence

Skilled sellers know that, to negotiate effectively, you need to stay calm under pressure. Even if the negotiation feels friendly, it’s often still a game of chicken: Either you buckle or the other side does. You’ll likely face skepticism or push back from buyers. Avoid making impulsive price concessions out of frustration.

Of course, that doesn’t mean being inflexible. Avoid being so bullheaded that you refuse to make any compromises. Before going into the negotiation, meet with your team to define your ideal starting point and identify what you’re willing to compromise on. This preparation helps you keep a steady, professional demeanor. Aim to be confident but open.

Trustworthiness

Customer trust is essential to any successful business, and sales reps lay the groundwork. People want to work with people they trust, so make sure you do your part to show you’re working toward mutually beneficial outcomes. Give your customers essential info like product details, policies, and guarantees.

Share your brand’s story—why you exist, what you value, and how your product solves real problems—to create an authentic connection. Highlight current customer satisfaction through reviews, testimonials, or case studies. This reassures prospects that others like them have already had a positive experience with your business, which makes them more comfortable moving forward.

Remember there’s a reason the sleazy used-car salesperson is such a pervasive negative stereotype. Being transparent about how much wiggle room you have reinforces trustworthiness.

Sales negotiation strategies

Here are the essential negotiation strategies to hone when working toward a sale:

Do your research

The most important step in the selling process is proper preparation. Fully understand your product and how it benefits customers. Find out what your buyer wants, who the decision makers are on the other side of the table, and potential mutually beneficial solutions. Be prepared with data and analytics to justify your positions.

Take the lead

Be on the offensive from the get-go. Be the one scheduling meetings, setting agendas, and sending proposals. Give the impression you’re directing the conversation while still giving your buyer room to share their own thoughts and opinions. That way, you can more easily influence negotiation outcomes.

Demonstrate value

It’s not all about who can offer the lowest price. A value-based selling methodology—selling by focusing on the customer’s needs and desired outcomes—lets you focus on real-life value over product features and price points. While buyers care about cost, successful negotiations demonstrate how a product solves their specific problems. After all, 87% of high-growth companies take a values-based approach to sales.

Anchor the negotiation

Making the first offer sets the tone for the conversation and subsequent bids. Anchor the negotiation on your terms, and use the opportunity to set standards for what you consider fair.

Prepare to offer trades

Compromising and offering alternatives are part of the negotiation process. Consider possible concessions ahead of time, and come to conversations prepared to offer them. For example, maybe you’re willing to agree to a customer’s proposed lower monthly rate if they agree to a longer contract.

Be ready to walk away

At the end of the day, you don’t want to make an unfavorable deal. Good sales professionals recognize when the terms aren’t beneficial, when there’s been too much pushback, or when a customer is flat-out unreasonable. Sometimes, walking away is actually the kick the other side needs to meet you closer to your terms.

If your ecommerce store is thriving domestically, expanding into international markets may have crossed your mind. It’s an exciting (and potentially lucrative) idea—Statista values the B2Ccross-border ecommerce market at $1.209 trillion. Staying domestic might mean missing out on global growth.

But successful global expansion requires more than uploading your inventory to an international domain or offering international shipping. Customers in Tokyo, Toronto, and Toulouse shop differently, speak differently, and connect with brands differently. Localization is your brand’s opportunity to tailor the customer experience for customers in different markets.

A proper localization strategy extends to the entire customer experience—from the images and colors you choose and the payment options you offer to how you talk about your products—to meet local cultural expectations and shopping behavior trends. Let’s explore how you can carve out your own localization strategy to start bringing in international revenue.

What is a localization strategy?

A localization strategy is how you adapt your brand to the local markets you enter. It describes how you tweak your products, website, and overall marketing so that shoppers in any given country feel like your brand is tailor-made for them. It’s not just about language—a solid localization strategy covers everything from cultural references and distinct design aesthetics down to preferred payment methods.

For example, Kit Kat in Japan took advantage of a lucky coincidence through a concerted marketing campaign—the brand name sounds like “Kitto Katsu,” meaning “You will surely win”—turning the chocolate bar into a good luck charm. Coca-Cola changed its name in China to “Ke Kou Ke Le” (delicious happiness) through collaboration with local linguists.

The goal is to make international customers feel as comfortable and confident shopping with your brand as your domestic customers do. This means eliminating friction that might cause hesitation—from unfamiliar payment methods to confusing checkout flows—and replacing them with elements that feel distinctly local and trustworthy.

Translation vs. localization

Translation is simply converting writing into another language, whereas localization is about customizing the entire shopping experience to fit your target culture. That means you might need to rewrite content to integrate local slang or humor, because a word-for-word translation often misses the mark. For instance, Spanish differs between Spain, Mexico, and Argentina, requiring distinct adaptations for each region.

A slogan or joke that elicits a laugh in one geographic region might totally flop (or offend) in another. Localization also covers visuals and symbols; hand gestures that are positive or neutral at home could have very different meanings elsewhere. You may have to change things like product labeling, sizing, or packaging to meet local regulations and expectations in each market.

How to create a localization strategy for ecommerce

1. Craft your localization process
2. Don’t forget about legal review
3. Calibrate to each local market
4. Cultivate a competitive edge
5. Get into the logistics
6. Try out localized content in one market
7. Aim for increased market penetration

Riley, the sustainable period care brand, expanded from Ireland across Europe by researching localized sustainability attitudes and customizing its educational content to represent cultural sensitivity around menstruation health discussions.

“Our biggest learning is that you can’t just copy-paste the same message everywhere and expect it to resonate,” says Fiona Parfrey, the brand’s cofounder. “The key is to really listen and adapt how you communicate, without also losing sight of what makes your brand unique.”

The following steps, complete with advice directly from the Riley team, can help you capture global opportunities:

1. Craft your own localization process

Before diving into translation and payment integrations, establish your localization philosophy. These are the non-negotiables that remain consistent in every market and, conversely, the elements that flex to meet local expectations. This foundation determines how you’ll adapt messaging and navigate regulations that differ abroad.

Riley took on this challenge with strategic clarity. “Education has been at the heart of Riley from day one,” Fiona says. “We want people to understand not just what our products are made from, but why that really matters for their bodies and for the planet. When we expand into new markets, we know that in some countries, period health is still a taboo topic, while in others, there’s already a lot of awareness about sustainability. So we adapt how we tell our story to meet people where they are, while always staying true to our core mission.”

2. Don’t forget about legal review

Don’t overlook the legal side of things, because you need to get ahead of compliance issues early. If your food product contains an ingredient banned in a target market, you’ll need to either pause expansion plans or reformulate your product. Health claims, ingredient disclosures, and environmental certifications often need market-specific verification.

For instance, sustainability claims face particularly stringent scrutiny with varying standards across jurisdictions. Permissible marketing language in one market may constitute illegal greenwashing in another.

“Sustainability is non-negotiable for us,” Fiona says. “However, we are very conscious that different jurisdictions can have different rules and regulations when it comes to sustainability claims. We are completely anti-greenwashing, so we researched this heavily to ensure that our messaging is transparent and clear across markets.”

3. Calibrate to each local market

Consider which market to tackle first and figure out what “winning” means for that market specifically. Not every country will be equally receptive to your product, so be intentional about your localization efforts; maybe success in Market A means gaining 11,000 new customers in year one, while hitting a more modest goal is more suitable for Market B.

Also, pick a place that plays to your strengths. If a local audience aligns with your brand’s values or niche, you’ll have a head start. Case in point: Fiona and her team chose Germany as Riley’s first non-English market. Why? German consumers really care about sustainability—one of Riley’s core values.

“Germany stood out as our first non-English market because German consumers are known for embracing sustainability, and that’s at the heart of what we do,” says Fiona. “With a large eco-conscious consumer base and high adoption of sustainable products, we felt our B Corp status would resonate well with German consumers.”

4. Cultivate a competitive edge

Once you’ve picked a promising market, dive into understanding how those customers shop and what they expect from an online store. Check out local competitors and market reports. Find out which marketing channels actually work there, what social networks or marketplaces are popular, which payment methods everyone uses, and how fast people expect to get their orders. This is also the time to get insights straight from the source—talk to folks who know the market well.

When Riley expanded from Ireland to the UK, the team went all in. “We spoke to a lot of other founders who had successfully scaled beyond Ireland to understand their learnings and how best to approach market entry,” says Fiona. “We looked at competitors’ products, how they are positioning themselves, and which routes to market they are focusing on. Simple things like visiting different retail stores to understand the offerings and marketing messages in detail is very useful.”

Fiona’s cofounder, Áine Kilkenny, even moved to London so they could have boots on the ground and gather feedback firsthand. Similarly, you might run surveys or interviews with potential customers in your target market to really get a feel for their preferences. The goal is to understand behavior and expectations in foreign markets, inside and out, before you launch.

5. Get into the logistics

Next, figure out the nitty-gritty of making localization happen—specifically, decide on your budget, who’s going to help you (partners/vendors), and what tech tools you’ll rely on.

Make sure your ecommerce platform can support multiple languages and currencies (you want it to effortlessly handle local pricing, taxes, and payment options). A platform with strong international features can save you a ton of headaches—for instance, Fiona’s team chose Shopify because it can manage all of that. “We use Shopify to power our DTC subscriptions, and the platform’s ability to manage localised storefronts, currencies, and payment options was key to scaling abroad,” says Fiona.

A few partners and tools to consider:

• Hire native translators or copywriters. Working with people who speak the language natively ensures your messaging across marketing materials sounds natural (and not like a clunky machine translation).
• Partner with localization agencies. A good agency can coordinate all your translations and culture-specific adaptations. They’ll bring experts and do quality assurance (QA) on your website, product info, and marketing content so everything feels on point for the region.
• Use translation services. Automating a wide swath of the language localization process can prove helpful. If you’re on Shopify, try the Translate & Adapt app or others like Weglot or Langify to add multiple languages to your store. These tools make managing content in different languages easier—just make sure a human gives any important text a once-over to double-check it reads well (and makes sense).
• Leverage your ecommerce platform’s features. Shopify has localization features baked in. Shopify Markets, for example, lets you set up country-specific storefronts, show prices in local currency, and handle domains and SEO per region.
• Bring in local experts. Contract local consultants who really know the market. They can tweak your advertising campaigns to align with local trends, guide you on which social media channels to use, and even help with customer service or PR in that country.

6.  Try out localized content in one market

When it’s go time, start with just one new market as a test run instead of launching everywhere at once. Think of your first international launch as a pilot and test every part of the shopping experience like you’re a local customer. Double-check that your site truly feels local:

• Is the language on your website natural (and not awkwardly translated)?
• Do the images and branding feel appropriate for that culture?
• And are you referencing local colloquialisms in your marketing strategies where it makes sense?

Focus on the checkout and post-purchase details. Prices should show up in the local currency, taxes and duties need to be calculated properly, and you want to offer the payment methods locals like best.

Go through the entire checkout process yourself. Does the site detect the user’s location or let them pick their region easily? Is each sequence of the checkout translated clearly, including error messages? Run a bunch of test orders with your team or some beta users in-country to spot any glitches or awkward translations. By testing with a modest launch, you can find and fix issues—like a weird address format or an untranslated button—before real customers hit them.

7. Aim for increased market penetration

After your localized store is live, the work isn’t over—now you need to watch how it performs and keep tweaking. Zero in on your numbers and analytics, especially conversion rates. For example, is your new market’s conversion rate lower than your main site’s? If a large number of locals are browsing but not buying, figure out what’s turning them off. Maybe the site’s copywriting doesn’t resonate, or perhaps you forgot to include a popular local payment method.

Get qualitative feedback too: survey your first customers or see what people are saying on social media to learn how they feel about your brand in that region. All that feedback will point you toward improvements. You could discover that shipping costs are scaring people away, or maybe your French ad copy isn’t hitting the right tone and needs a rewrite to better click with local humor.

Optimization isn’t a one-and-done thing. You have to listen to each new country and adjust how you communicate, all while keeping what makes your brand distinct front and center.

Black Friday may have started as a purely discount-driven add-on to Thanksgiving, but it’s become something much bigger: both literally, as a multiday sales event (Black Friday Cyber Monday, or BFCM), and also culturally, as the time of year when consumer urgency, desire, and value converge. Pent-up demand is released, and consumers are finally ready to invest in big-ticket items, stock up on staples while prices are low, or explore new interests in earnest.

For small and midsize businesses, the ability to spot where consumer attention is heading year after year can help them better position their products, identify untapped opportunities, and make more confident decisions around inventory, messaging, and product development. 

“It’s important to understand what is happening in the culture of your target consumer to get a sense of how your category may be impacted and where you can innovate in order to find longevity and staying power,” says Angie Meltsner, founder of Tomato Baby, a cultural insights and trends research studio.

Shopify looked back at five years of global BFCM sales data, highlighting the macro trends that rose to the surface. The goal wasn’t just to reflect what happened, but to help business owners make sense of it, so they can plan where to go next.

Consistent top sellers 

Across five years of Shopify BFCM data, some product categories have consistently held strong. These seven standouts have appeared at the top of year-over-year growth lists repeatedly (in no particular order):

1. Pet health care
2. Baby supplies
3. Camera instant film
4. Film photo/film digitization service
5. Mattresses
6. Cosmetics
7. Electric skateboards

The continued demand for pet health care and baby supplies reflects essential, high-frequency spending—particularly from millennial and Gen Z consumers entering new life stages. These shoppers are thoughtful and digitally savvy, often turning to BFCM as a time to stock up on big-ticket or high-value essentials at a lower cost.

Cosmetics has remained resilient year after year, buoyed by the enduring appeal of beauty culture, self-care rituals, and TikTok–fueled product discovery. Even as trends evolve—from bold looks to “clean girl” minimalism—makeup and skin care remain an accessible form of indulgence.

The tension between instant film and digitization services reflects a deeper consumer duality: a desire to preserve and streamline memories through digital convenience, and a counter-desire to stay grounded in the physical world. Instant cameras, with their tactile, imperfect charm, offer a nostalgic yet novel way to engage with the present.

Electric skateboards and other micromobility tools speak to growing interest in sustainable, individual transportation—especially among younger consumers navigating urban environments.

Mattresses, meanwhile, are a classic big-ticket item. With significant discounts on offer, many consumers strategically wait for BFCM to make these infrequent but important purchases.

2020: Confinement, care, and a reimagined commute

Trending categories by year-over-year order growth:

1. Fashion face masks: +31,933%
2. Saute pans: +10,327%
3. Hair clippers and trimmers: +2,111%
4. Manicure tool sets: +610%
5. Cookware sets: +608%
6. Sweatpants: +424%
7. Jigsaw puzzles: +387%
8. Electric bikes: +367%

The COVID-19 pandemic radically altered how—and where—people spent their money. With physical retail shuttered and consumers confined to their homes, ecommerce adoption accelerated dramatically. From 2019 to 2020, the world saw a 32% year-over-year increase in ecommerce penetration, the biggest single-year jump in the past decade.

Consumer spending shifted just as dramatically. It’s no surprise that fashion face masks and sweatpants saw significant year-over-year order growth, but other surging categories hinted at longer-lasting changes in behavior.

For one, interest in DIY beauty and grooming rose sharply. With salons closed, people turned to tools for cutting their own hair or doing their own nails at home. There was also a noticeable turn toward screen-free hobbies like jigsaw puzzles, which reflected a desire for tactile, analog activities in a time dominated by digital interactions.

The popularity of bundled products (such as cookware sets and manicure kits) reveals a distinctly BFCM-specific behavior: Shoppers are especially drawn to multi-item sets because the discounts tend to be deeper, often saving them hundreds of dollars compared to buying items individually. Additionally, many hold off on big purchases until this weekend, making them especially responsive to high-value deals.

One of the most striking growth areas was electric bikes. With auto prices rising and public transportation becoming a health risk, many consumers turned to e-bikes as a lower-cost, safer mobility option. While public transit ridership fell 73% in the US, total e-bike sales spiked 26% year over year, according to a 2022 Deloitte report. Electronic bikes offered an easy way for people to get around efficiently, and get outdoor exposure and exercise.

2021: Reentry and reconnection

Trending categories by year-over-year order growth:

1. Poker chips and sets: +4,468%
2. Wetsuit pieces: +1,488%
3. Quilting rulers: +883%
4. Dutch ovens: +673%
5. Swim goggles and masks: +330%
6. Curling irons: +315%
7. Checked suitcases: +300%
8. Carry-on suitcases: +240%

On November 8, 2021, the US government officially lifted its travel ban on international visitors, and consumers left their caves in earnest. A surge in suitcase orders highlighted just how eager people were to hit the road again. TSA checkpoint data supports the sentiment: On November 28—the busiest travel day of the year—screenings were more than double 2020 levels and just 18% below those of 2019.

Shopify’s data also points to a widespread return to social connection. Spikes in poker sets and Dutch ovens suggest a renewed interest in hosting and gatherings. The increase in orders of curling irons also aligns with the return of events.

Still, it would be a misreading to suggest a complete reversion to pre-pandemic norms. Some pandemic-era pastimes—like quilting—proved their staying power. Additionally, consumers invested substantially in outdoor adventure-oriented gear like wetsuits and swim goggles.

2022: Beauty, body, and a break from routine

Trending categories by year-over-year order growth:

1. Cosmetic and toiletry bags: +644%
2. Power adapter and charger accessories: +583%
3. Craft knife blades: +565%
4. Boxing and martial arts training equipment: +417%
5. Bone conduction headphones: +388%
6. Doll and action figure accessories: +236%
7. Lip balms and treatments: +226%
8. IPL hair removal devices: +217%

As consumers settled into a new rhythm of life post-lockdown, spending shifted toward mobility and self-enhancement. Increases in orders of toiletry bags and power adapters reflected continued growth in travel and hybrid lifestyles. People were on the move again, but often still working remotely or balancing travel with routine. In 2022, digital nomadism was up 131% from 2019 levels, according to data from talent solutions company MBO Partners. 

The interest in DIY beauty that started in the pandemic stuck around. Sales of IPL (intense pulsed light) hair removal devices surged, driven by both demand and supply-side innovation. In 2022 alone, the FDA cleared 16 new home-use IPL devices—more than had been approved in the decade prior. 

Boxing and martial arts gear followed a similar path. Demand was driven by overlapping trends: the continued popularity of home fitness, growing attention to personal appearance, and a spike in interest in combat sports. UFC CEO Dana White reported the franchise’s fan base grew by 68% during the pandemic, and the International Boxing Association saw a 25% rise in registered amateur and recreational fighters from 2018 to 2021.

2023: Slow hobbies and fast coffee

Trending categories by year-over-year order growth:

1. Plug-in diffusers: +3,126%
2. Teeth whitening strips: +538%
3. Hair styling tool sets: +505%
4. Teeth whitening pens: +454%
5. Crochet hooks: +431%
6. Instant coffee: +342%
7. 3D printer filaments: +275%
8. Craft cutting & embossing tools: +107%

In 2023, BFCM shoppers revealed two seemingly opposing impulses: a craving for speed and optimization, and a desire to slow down and reconnect with the physical world.

Instant coffee made a comeback—with overall sales growing 7% in the US, according to data from market research firm Mintel—as convenience and cost savings met quality. Far from the burnt-rubber brew of decades past, new-wave instant coffee offers complex flavor, convenience, and portability that appeals to busy parents and adventurers alike. 

Its naturally higher antioxidant levels compared to brewed coffee, combined with growing interest in alt-coffee formats like mushroom blends, also helped position instant coffee within broader wellness culture. “Wellness culture for sure has become dominant and has reached ultimate heights,” says Angie, who cites biometric wearables and the data they provide as a large driver. 

Yet while many sought better, faster ways to consume, others leaned hard into slowing down. The rise in sales of crochet hooks, craft cutting and embossing tools, and 3D printing materials point to a continued embrace of hands-on creation. 

This is a hobby that likely will stick around, as consumers, especially younger generations, become more interested in ways to proactively improve their mental health and regulate stress levels. According to a 2024 survey of UK adults, crafts produced greater life satisfaction than paid work.

Teeth whiteners and hair tool sets also saw a significant uptick in orders year over year, suggesting a continued investment in appearance-focused personal care. “As filtered images of ourselves become more common, people could be trying to improve their appearance to be in line with how they see themselves filtered,” Angie notes. The desire to align one’s offline appearance with their online presence continues to shape personal care spending in increasingly nuanced ways.

2024: Analog and togetherness 

Trending categories by year-over-year order growth:

1. Compact digital cameras: +2,345%
2. Embossing stamps: +1,119%
3. Pilates reformers: +990%
4. Handheld players and recorders: +799%
5. Tennis shoes: +452%
6. Beach bags: +387%
7. Party games: +306%
8. Bird feeders: +98%

In 2024, compact digital cameras made a dramatic comeback. The lo-fi aesthetic of the photos aligns with a broader revival of Y2K aesthetics, but the appeal ran deeper. Point-and-shoots offer greater control over photography than smartphone cameras—while getting people off their phones. The more powerful flash makes them better for evening shooting, and physical dials invite users to frame photos through their own creative lens. In an era saturated with AI-enhanced imagery, the imperfect results of digital cameras felt refreshingly human.

Embossing stamps saw a similar rise in popularity, pointing to the desire of consumers to make their mark—literally. Whether used on books, invitations, or fabrics, these tools offered a way to personalize the physical world with care and craftsmanship. It’s part of a broader movement toward premium-feeling, hands-on hobbies that reward attention to detail. “Slow and analog hobbies that require deliberate focus and friction are still growing in interest as people intentionally aim to spend time away from screens and devices,” says Angie.

The growth in Pilates reformers tracks with the continuing rise in the workout’s popularity, due in large part to social media’s influence. Pilates was the most-booked workout of 2024, according to data from booking platform ClassPass, retaining its top spot from 2023 but with bookings increasing by 84% year over year.

What to expect for 2025?

Looking at the road ahead, the push-pull between wellness optimization and indulgent escape is likely to shape much of 2025’s consumer behavior. “I think we’ll continue to see interest in wellness-related categories as wellness culture permeates other categories like beauty and even food and beverage,” says Angie. 

As wearables and biohacking go mainstream, more consumers are investing in products that promise better rest—and by extension, better performance. “Sleep is growing as a wellness status symbol,” Angie notes, pointing to smart mattresses, bedroom lighting, and sleep accessories as potential breakout categories. 

At the same time, a growing weariness with self-optimization may lead to a swing in the opposite direction. “I do think there is a growing counter-movement to wellness overload where we’re looking for pure indulgence for indulgence’s sake and leisure for leisure’s sake,” says Angie. “Not every experience needs to be functional or a method for measured self-improvement.”

Finally, Angie points to a growing pendulum swing away from AI-driven convenience and toward activities that can’t be outsourced or simulated. “Things like exercise and slow hobbies require some level of embodiment, practice, craft, and a temporal reality in order to engage,” she explains. These pursuits ground people in the present moment, offering friction, presence, and tactile feedback—qualities that are becoming rarer in our increasingly digitized lives, and therefore more meaningful.

In 2025, expect to see consumers continue to seek balance between these extremes: optimizing where it matters, and letting go where it doesn’t.

If you’ve ever had a pipe unexpectedly burst or accidentally given yourself an uneven haircut, you know the importance of a service business.

Service businesses primarily trade on valuable skill sets and accumulated experience, rather than products. Successful services businesses marry business skills with service quality to provide customers solutions to any number of issues.

If you’re great at something that many people need (tax filing, snow shoveling, wedding planning, hair styling), you may be considering starting your own business centered around those professional services. Learn how to start a service business.

Types of service businesses

Service business ideas typically fall into a few categories:

• Marketing services. Broad business services, including social media management, copywriting, and market research.

• Personal services. Individual-level help, including cooking, pet sitting, and personal training.

• Cleaning and repair services. High-demand and often high-expertise services like auto and watch repair or car detailing.

• Family services. Family- and children-focused care, including birthing help and tutoring.

• Pet care. Groomers, dog walkers, pet sitters, and more.

• Administrative services. Focused on organization and efficiency, like bookkeeping and virtual assistance.

• Fashion and beauty services. Often a more specialized offshoot of personal services, including makeup artists and wardrobe stylists.

• Health and wellness services. This category is broad, including gyms, yoga classes, wellness retreats, massages, and more.

• Event services. Covers everything that goes into an event, from planning to catering to flower design.

• Creative services. A wide-ranging category that covers creative skills like graphic design, photography, and music.

How to start a service business

1. Identify your business goals
2. Write a business plan
3. Secure financing
4. Register your business
5. Create a website
6. Set your pricing plan

As with any business, a service business starts with an idea. After you find your niche, follow these steps to launch your company:

1. Identify your business goals

The first step in any new business venture is to identify your goals. These can be lofty (i.e., boost self-esteem, one haircut at a time) or grounded (i.e., help five local businesses thrive through better social media marketing by the end of the year). Craft goals that reflect your initial reasons for starting a business and are strong enough to continually guide your business decisions.

Use the SMART framework (which ensures goals are specific, measurable, achievable, relevant, and time-bound) to detail your desired results and provide a framework for how to achieve them.

2. Write a business plan

Next, write a business plan. Use a template or outline to create a document that captures your goals, strategies for achieving them, and the ideal timeline.

Include these core elements in your business plan:

• Executive summary. Your executive summary is a synopsis of your business plan, summarizing your company, history, services, financials, and future plans.

• Company description. Describe your business and what you hope to achieve. Consider including your business model, industry, business structure, vision, mission, value proposition, objectives, and team.

• Market research. Market research provides insight into the strength, opportunities, size, and competition of your chosen market. You can cite government statistics, academic research, and news outlets in your industry.

• Management and organization structure. Describe your current and future legal structure, employees and their responsibilities, and an organizational chart to show the relationship between teams.

• Services. Though you’ll likely mention your services throughout, include a section with detailed descriptions of all your offerings.

• Ideal customer. Specify who you’re trying to reach and why. Create an ideal customer profile, and include specific details about them, such as where they live, how they spend their free time, how much they earn, and their values.

• Marketing plan. Your marketing plan will cover your prices, how you’ll sell your services, and how you’ll promote them.

• Financial plan. Create a financial plan to outline your projected revenue, expected operating expenses, and possible funding options.

3. Secure financing

Depending on the type of service business you’re looking to start, you may need to secure external financing. For example, you might have more overhead if you need a physical space and commercial property insurance. Funding options include taking out a small business loan with a bank, crowdfunding among your supporters, or pitching individual investors.

To protect your company’s (and your own) finances, determine which types of business insurance are necessary for your industry. A business owner’s policy, for instance, bundles the most common types of coverage, including general liability, property damage, business interruption, and workers’ compensation. Service providers whose work can lead to harm or loss for their clients may need professional liability insurance.

*Shopify Capital loans must be paid in full within a maximum of 18 months, and two minimum payments apply within the first two six-month periods. The actual duration may be less than 18 months based on sales.

4. Register your business

Registering your business can be daunting if you’ve never waded into the world of federal or state legal paperwork. Here’s how to get started:

• Pick your business name. Aim for a memorable business name that’s relevant to your service offering and available as a domain and social media handle. This might simply be your name and a description of what you do (e.g., Jane Smith Window Washing) or more unique (e.g., Jane Loves Windows).

• Choose a business structure. How you structure your service business (e.g., a sole proprietorship or LLC) has legal, tax, and financial implications. Consult with a legal adviser if you’re unsure of the best structure for your business.

• Register with federal agencies. Register your business with the IRS to secure an employer identification number (EIN), also known as a tax ID number, and keep your business taxes separate from your personal information.

• Get certified. Depending on your service, you may need various local or state permits or certifications to do business. Check with your local agencies for guidelines; typically, you can learn more through the Secretary of State’s office or a dedicated business bureau.

• Register for taxes. Unless you’re doing business in Alaska, Delaware, Montana, New Hampshire, or Oregon, you’ll need to collect sales tax as part of your service business. To do that, you’ll need to register with your state’s revenue authority department online or by phone.

5. Create a website

Small business owners need a well-designed, memorable, and easy-to-navigate website. You don’t need to start from scratch—most website builders have specific templates and user-friendly editor tools. For example, Shopify’s Dawn theme is a fan favorite because of its simple, customizable layout and emphasis on visual storytelling.

After you select your hosting platform, register your domain name, and choose a template, create a basic landing page and add any relevant pages for your customers to browse, including:

• About page. An About page goes into more detail on your background, expertise, or big picture goals for the business.

• Contact Us page. Make sure customers can get in touch with you by providing your contact information and business address if you have a physical location.

• FAQ page. If your service requires background information, an explainer or frequently asked questions page provides additional insights on what customers can expect from working with you.

• Portfolio and proof. A portfolio of past work and social proof like client testimonials can highlight your expertise and boost customer confidence.

• Online booking and product pages. You can sell your services directly from your website (picture a package of classes at a yoga studio or access to an online cooking course). Consider also adding an ecommerce component to your offering, like merchandise, gift cards, or complementary products, to generate extra sales on top of your services.

A unified point-of-sale system, like Shopify POS, can make product sales, bookings, and deposits seamless for customers and easy for you to manage on the backend.

6. Set your pricing plan

There are two main components to consider when setting your service pricing: your profit margin and your competition. You’ll typically need to set a price that generates a profit but is comparable to what similar services charge. Follow a pricing strategy that makes sense for your brand and target market—whether charging higher to communicate quality or lower to attract more price-conscious customers.

How you communicate your prices will depend on the type of service business you start. Some businesses, like consulting and law firms, disclose rates after an initial conversation with a potential client to better reflect a project’s scope and budget. If your service is more straightforward (like an hourly or flat rate for landscaping projects, for example), consider including a price range directly on your website.

You’ve got the product, the business idea, maybe even a few early customers—but no developer. A no-code website builder makes it possible to launch anyway. Whether you’re opening an online store, showcasing a portfolio, or just testing ideas, these tools help you build fast, no coding required.

Today’s platforms go beyond drag-and-drop, with responsive design, mobile optimization, and built-in analytics—capabilities that once required developers, now point-and-click easy. Even better, AI tools, like Shopify’s Sidekick, can help you with business tasks, not just content creation.

Here’s what you need to know to do it all yourself with a no-code builder, plus our top recommendations to choose from.

What is a no-code website builder?

A no-code website builder is a tool that lets you design a professional-looking site without writing code. Think of it as visual editing: you add sections, swap images, and rearrange elements, and the platform handles the coding behind the scenes. Most no-code tools provide pre-designed, customizable templates to get you started, as well as built-in tools for blogging, ecommerce, and search engine optimization (SEO).

Who are no-code platforms for?

No-code website builders are great tools for busy entrepreneurs. “Most people aren’t technical,” says Ben Sehl, director of product for Shopify, “and even if they are, they don’t have time to fiddle with code every time they want to tweak something.”

No-code platforms are for anyone who wants to launch a site without having to code—solo founders, freelancers, artists, coaches, small and medium businesses. “You should be able to move things around, update your homepage, whatever it is, and not have to ask for help every time,” Ben says. “It should just make sense.”

Top no-code website builders

1. Shopify
2. Wix
3. Squarespace
4. Webflow
5. Jimdo (Dolphin)
6. BigCommerce
7. Ecwid by Lightspeed
8. Square Online

Choosing the right no-code website builder depends on what you’re trying to build and how fast you need to launch. For small businesses and ecommerce founders, the best platforms make it easy to manage inventory, build product pages, track orders, and customize your storefront—all without writing code or hiring a developer.

Here are eight no-code website builders that simplify selling online, each with tools to help you create a professional site with minimal setup. Whether you’re launching a side project or scaling an established store, these platforms cover a range of needs:

1. Shopify

Shopify is purpose-built for selling online. It includes core ecommerce features out of the box: product and inventory management, mobile-optimized checkout, integrated payments, abandoned cart recovery, and basic sales analytics. You can launch a professional website, connect your own domain, and expand functionality over time with apps, custom themes, or built-in tools like Shopify Email and Sidekick, the platform’s AI-powered assistant.

“With Shopify, you can start small and turn things on as you grow—subscriptions, international selling, in-person sales, whatever,” Ben says. “You don’t have to go looking for a whole new platform every time your business levels up.”

Who it’s for

Shopify is built for ecommerce businesses of all sizes, from solopreneurs to large enterprises.

Pricing

Shopify offers an introductory plan with three days free, then the first three months for $1 per month. Plans with full ecommerce capabilities start at $29 per month, including secure hosting, 24/7 support, and unlimited product listings.

Features

• AI website builder. Use Shopify Magic to streamline your store design process. You can create landing pages and product listings from quick prompts and receive guidance on everything from shipping to analytics.
• More than 250 themes and templates. Jump-start your website design with more than 250 free and professionally designed premium themes.
• Integrated payment processing. Shopify Payments is an integrated payment gateway that accepts all major payment methods, plus, more than 100 third-party payment providers are compatible.
• Extensive app store. Access the Shopify App Store, with more than 8,000 add-ons and integrations.
• Access free tutorials. Shopify’s free online courses can help you build and scale your website.
• Professional partner network. Shopify’s partner directory helps you hire vetted professionals like designers and coders if you want to take your website design to the next level.
• SEO-optimized. SEO tools help visitors and search engines find your site, so your pages can rank higher in search results.
• 24/7 customer support. Shopify offers round-the-clock support via email, live chat, and phone.
• G2 ⭐️ rating. 4.4

2. Wix

Wix combines drag‑and‑drop editing with built-in tools for selling products, managing inventory, and customizing storefronts. It offers hundreds of design templates, AI-assisted site setup, and access to apps like Wix Stores for payments, shipping, and marketing. While flexible, some ecommerce features—like multi-currency support or advanced analytics—are available only on higher-tier plans.

Who it’s for

Freelancers and businesses who want to showcase their work on portfolio sites or build basic ecommerce sites.

Pricing

Wix plans cost $17 to $159 per month. Ecommerce functionality starts at $29 per month on the Core plan; the lower-priced tier does not include online selling.

Features

• AI website builder
• More than 900 templates
• Integrated payment processing with Wix Payments
• More than 500 available apps
• Free tutorials to get started
• Professional partner network
• SEO tools
• 24/7 customer support
• G2 ⭐️ rating: 4.2

3. Squarespace

Squarespace is known for professionally designed templates and a user-friendly editor that enables users to create product pages, showcase services, and manage digital or physical sales. Built-in features include mobile‑optimized checkout, basic inventory tracking, SEO fields, and marketing tools like email campaigns and appointment scheduling. It may be useful for creators, service businesses, and small storefronts that don’t need complex ecommerce workflows.

Who it’s for

Creatives and small businesses building simple websites.

Pricing

Squarespace plans cost $16 to $99 per month. The Basic plan includes a custom domain name and access to templates, but you’ll need to pay an additional 2% in transaction fees (on top of payment processing fees).

Features

• AI website builder
• More than 180 templates
• Integrated payment processing with Squarespace Payments
• Guides and tutorials
• Advanced analytics
• Professional designers available through Square Marketplace
• SEO tools
• 24/7 customer support
• G2 ⭐️ rating: 4.4

4. Webflow

Webflow gives users full visual control over site layout and design while supporting structured content through its built-in content management system (CMS). It includes ecommerce functionality for managing products, customizing checkout pages, and processing orders, with advanced design capabilities that appeal to agencies and brand-focused businesses. It’s an option to consider for users who want pixel-level flexibility without relying on templates or writing custom code.

Who it’s for

Experienced web designers and builders.

Pricing

Webflow offers a free version of its platform, but you’ll need to upgrade for a custom domain, SEO tools, and the ability to add more than two pages (among other features). Paid plans cost $14 to $39 per month, with enterprise pricing upon request. Ecommerce plans start at $29 per month with limits on product volume and transaction fees; higher tiers offer expanded functionality and CMS access.

Features

• AI website builder
• More than 7,000 templates
• Free tutorials
• Advanced analytics available as a paid integration
• Professional partner network
• SEO tools
• 24/7 customer support
• G2 ⭐️ rating: 4.4

5. Jimdo (Dolphin)

Jimdo offers an easy-to-use, AI‑driven builder—Dolphin—that asks about your business needs and generates a starter site, which you can then edit using a simple drag‑and‑drop interface. It supports up to 100 products via Stripe or PayPal and includes built-in SEO prompts and HTTPS. However, customization options are limited (there are only about 16 templates), and switching between Dolphin and Jimdo’s more advanced Creator editor isn’t possible.

Who it’s for

Entrepreneurs looking to quickly create a basic site.

Pricing

Ecommerce functionality begins with the Business plan at $21 per month. The $28 per month VIP tier adds features including unlimited storage, additional pages, and accelerated customer support.

Features

• AI website builder
• More than 15 themes and templates
• Integrated payment processing
• SEO-optimized
• G2 ⭐️ rating: 3.9

6. BigCommerce

BigCommerce is an ecommerce platform geared toward enterprises, although it does have a no-code website builder for small businesses. Standard features across all plans include unlimited products, bandwidth, staff accounts, PCI compliance, one-page checkout, support for Apple Pay or Amazon Pay, and multiple sales channels, including marketplaces and in-person POS.

Higher tiers introduce tools like customer segmentation, persistent carts, advanced product filtering, and Google Customer Reviews to drive conversions and personalization.

Who it’s for

BigCommerce’s primary product is for enterprises.

Pricing

Ecommerce functionality is available from the Standard plan at $39 per month; advanced plans like Plus ($105 per month) and Pro ($399 per month) unlock abandoned‑cart emails, multistorefront support, custom SSL, and enhanced reporting. Enterprise pricing is available upon request.

Features

• More than 280 templates
• Integrated payment processing
• More than 1,200 apps
• Free tutorials
• Professional partner network
• SEO-optimized
• 24/7 customer support
• G2 ⭐️ rating: 4.2

7. Ecwid by Lightspeed

Ecwid is a flexible ecommerce tool that lets you add a shopping cart to any existing website or build a standalone storefront using its Instant Site feature. It supports digital goods, shipping integrations, mobile POS, and social selling, with features like custom domains, abandoned cart emails, and marketplace sync available on higher tiers. It’s a practical choice for small businesses and creators that want to test ecommerce without switching platforms.

Who it’s for

Businesses that want to add ecommerce functionality to existing websites or build a simple ecommerce site.

Pricing

Ecwid plans range from $5 to $105 per month. You’ll need to spend at least $55 per month to get custom URL slugs, abandoned cart recovery, advanced analytics, and more.

Features

• AI website builder
• More than 70 templates
• Integrated payment processing
• Large app store
• Access free tutorials
• SEO-optimized
• G2 ⭐️ rating: 4.7

8. Square Online

Square Online is designed for businesses that sell both in person and online. It integrates with Square’s POS system so you can manage inventory, orders, and customer data from a unified dashboard. You’ll also get themes optimized for mobile shopping, SEO tools, signup forms, social media integrations, and support for digital and pickup orders. It’s especially useful for service-based businesses or retailers already using Square in-store.

Who it’s for

Restaurants and service businesses with limited ecommerce needs.

Pricing

Square offers a free plan with Square branding, a Square domain name, and basic transaction fees. Paid plans range from $49 to $149 per month.

Features

• More than 30 themes and templates
• Integrated payment processing
• More than 440 apps
• Professional partner network.
• SEO-optimized
• 24/7 customer support for high-tier plans
• G2 ⭐️ rating: 4.2

Features to look for in a no-code website builder

Choosing a no-code website builder means finding the one platform that fits your current goals without limiting future growth.

Here’s what to look for before you commit:

Intuitive design tools and templates

The best builders let you hit the ground running. You should be able to quickly and easily edit your site visually, see your changes live, and manage your site without a developer or coder at your beck and call. “Pick something that helps you move quickly and figure it out as you go,” Ben says. “You don’t need to nail it on day one. The most important thing is getting something live, testing it, and talking to customers.”

Certain interface features can make a website builder far more efficient. Together, these tools reduce friction and make site management faster over the long term.

• Grid and column systems. These help maintain consistent alignment.
• Section and block templates. These can allow you to insert complex layouts—such as product grids or image galleries—without building them manually.
• Page structure navigator. This can speed up your movement between sections.
• Global style controls. These ensure you can update fonts, colors, and spacing across the site from one panel.
• Menu builders. These streamline the navigation setup.
• Built-in undo, redo, and version history functions. These features provide a safeguard for when you need to reverse changes.

As you browse no-code website builders, keep an eye on themes and templates as well: These make it easy to start setting up your site right away. Choosing a platform with a wide variety of available templates will increase the likelihood of finding one you really like and that ties in with your brand, which can save time tweaking design elements down the road.

Mobile-ready by default

Find a website builder that automatically optimizes your site for smartphones and tablets. A comprehensive no-code website builder should create a responsive layout—reflowing content (reorganizing content on your page so it fits smaller screens), using mobile-friendly fonts, and making buttons easy to tap on smaller screens.

Before you hit Publish, check these elements yourself. Most builders offer mobile device preview modes, but don’t stop there: pull up your site on your phone and run the URL through Google’s Mobile-Friendly Test. Tap every link. Try the checkout. If your customers can’t add a product to their cart without pinching and zooming, you’re likely losing that sale.

Watch loading times, too, especially on mobile. Many builders, but not all, compress images automatically. Check load performance with free tools like PageSpeed Insights or use your browser’s mobile simulation tools to spot bottlenecks early.

Built-in ecommerce

Selling products, services, or subscriptions calls for purpose-built design. If you’re going to sell anything on your website, Ben says, “You really want commerce to be at the core of the platform you’re building on. It can’t be an add-on feature.”

That means more than just a cart. At a minimum, your builder should support secure checkout and payment processing—like Shopify Payments, Stripe, or PayPal—and let you sell without having to hack together third-party tools. Look for other key built-in features like product pages, inventory management, discount codes, and shipping services—all without custom code.

Solutions like Shopify, Squarespace, and Wix include these essentials as built-in options.

AI that actually saves time

AI shows up in nearly every website builder these days, but some platforms use it better than others. A few stick to the basics—filling in text blocks or suggesting a color palette—which can still save you time when starting out. The more impressive tools go further, digging into your site data, flagging what’s working, and recommending changes that could actually help you grow. Those are the ones that cut real work off your plate and help you launch faster.

Shopify’s Sidekick, for example, can analyze your performance, highlight patterns in your store data, and suggest next steps based on what’s working.

“Shopify’s Sidekick is really good at digging into your analytics and answering challenging business questions—like identifying slow movers and top sellers, so you know which products to put on sale and which to feature on your homepage,” Ben says.

“It’s like having a 24/7 business adviser and creative consultant built right into the platform. So the job of a website builder now is less about ‘Help me build a page’ and more like ‘Help me run my business smarter.’”

Wix’s AI site builder takes a different approach: it walks users through a short questionnaire, then generates a personalized layout based on business type, branding preferences, and content needs.

If a builder claims AI tools, ask what they actually do. Can it help you configure your site layout? Write optimized product descriptions? Edit images or improve SEO? Platforms with free AI features that support real business tasks—like setup, content, or store management—are more likely to save time.

SEO controls

When a platform gives you real SEO tools, you’re in control of how your business is seen, both by search engines and by the people who click through.

To show up in search engines and attract organic traffic, you need access to basic SEO fields—the “labels” that help search engines like Google understand what your page is about and decide when to show it to searchers: custom page titles, meta descriptions, alt text for images, and editable URL slugs.

The right builder should let you set these SEO fields so you can decide how your site appears in search results, not leave it to chance.

Control over these varies. Some platforms like Shopify and Wix let you edit all of them directly, without plug-ins or advanced settings. Others may restrict SEO tools to premium plans or auto-generate content you can’t fully customize.

Before choosing a builder, check how it handles SEO at the template level. Can you customize your homepage title and description? What about product or blog pages? If the platform doesn’t give you manual control, you’ll be stuck fighting its defaults—making it harder to grow traffic or fine-tune how your brand appears in search results.

Transparent pricing that doesn’t balloon

Low monthly pricing can be misleading. A $5 or $10 per month plan may leave out essential features like ecommerce tools, custom domains, analytics, or even basic hosting. 

“Some platforms look cheap, but are not built for ecommerce. They’re missing key systems, like inventory management, that you have to pay for and then pay developers to connect,” Ben says.

“You need to look at the total picture,” he adds. “What are you getting out of the box? Are you going to spend more time and money making things work than you would just picking a platform that does more upfront?”

Check how pricing scales as your business grows, especially if you plan to add products, expand traffic, or onboard a team. Are SEO tools, inventory management, or email marketing built in, or only available as paid add-ons? Look for platforms that include core functionality without locking you into paid upgrades just to stay operational.

   

A virtual showroom is no longer a pandemic-era experiment—it’s the new storefront for modern retail. Unlike a static website, it lets customers explore products interactively, creating an immersive experience that mimics a physical store.

Think of it as retail showrooming turned inside out. This digital-first environment merges discovery and purchase. 

A furniture brand can help shoppers visualize a sofa in their living room, while an auto dealer can offer a virtual test drive. The payoff is higher engagement, broader reach, and data-rich insight into customer behavior. What was once a trend is now becoming a core part of any successful retail strategy.

Ahead, you’ll learn how virtual showrooms work, the technologies behind them, and how brands from wholesale to home goods are putting them into practice. 

What is a virtual showroom?

A virtual showroom is an interactive, branded space that lets people explore, configure, and purchase products displayed in 3D, augmented reality (AR), or virtual reality (VR). Instead of static product photos and grids, customers can spin a product 360 degrees, zoom into details, watch embedded videos, or even step into a VR environment.

Virtual showrooms are different from standard online catalogs because they replicate how customers actually shop, creating a more engaging shopping experience. Instead of static images and long spec sheets, they enable shopper to:

• Interact: Zoom, spin, and configure products in real time
• Curate: Story-driven assortments and collections tailored to buyers
• Explore, but with a guide: Hotspots, comparison views, and embedded video demos
• Transact: Pricing, availability, and ordering inside the same experience

Taken together, these capabilities enable shoppers to move from interest to purchase without making them jump between pages, meaning less friction and a better overall customer experience.

The concept began in wholesale, but consumer-facing brands have adopted virtual showrooms as part of their sales strategies and scaled them even further. 

• Automotive companies use virtual showrooms to let shoppers virtually sit inside a car, change paint colors, or configure trims before booking a test drive. 
• Fashion retailers use AR overlays so customers can virtually try on clothes and accessories before they click “buy.” Even home improvement brands are introducing digital tools that let homeowners visualize materials and finishes before they ever visit a store.

Rather than replacing physical showrooms, virtual showrooms complement them. A shopper might test furniture at home through AR and then go to a physical store to see and feel the piece before making the purchase. Or a wholesale buyer might use a virtual showroom to narrow down a collection online, then confirm their choices at market week. In both cases, the virtual experience strengthens a click-and-mortar strategy by connecting virtual shopping to physical purchasing.

According to Grand View Research, the extended reality (XR) market—which includes AR and VR—is projected to grow from $142.39 billion in 2023 to over $1 trillion by 2030. The trend reflects growing consumer demand, rising government support, increased trust, and other factors contributing to increasing sales.

Key benefits of using a virtual showroom

There are many benefits to using virtual showrooms for both retail buyers and brands. But the real value of a virtual showroom doesn’t lie in its impressive visuals, but how it drives measurable results. 

Let’s look closer at the benefits virtual showroom offer:

Reduce operational costs and improve sustainability

The first win is cost. By replacing physical samples and prototypes with 3D models, retailers can lower expenses tied to shipping, storage, and production. A virtual showroom also helps cut down on waste and carbon footprint, since fewer samples and fewer last-minute product changes mean less material headed to the landfill.

Tips for retailers and wholesalers:

• Start by digitizing your highest-volume stock keeping units (SKUs) so they can be reused across your ecommerce site, marketing, and showroom displays.
• Use 3D updates in place of shipping out sample rounds—whether that’s sending a new colorway to wholesale buyers or showing furniture finishes to consumers.
• Build a single digital asset library so photography, video loops, and product visuals all come from the same files instead of multiple costly shoots.

Aligning digital assets with in-store storytelling also ensures consistency. Coordinated displays across both physical and digital spaces strengthen your brand identity, a key part of visual merchandising.

Accelerate your time to market

Virtual showrooms streamline launches by making product updates instant. Instead of waiting weeks for prototypes or line sheets, retailers can roll out changes in real time, ensuring customers always see the latest version.

Tips for retailers and wholesalers:

• Centralize your 3D models, swatches, and product information in one content hub that feeds directly into your showroom.
• Announce new products in stages—use teaser scenes to generate early interest, then make them shoppable when inventory arrives.
• Sync showroom updates with your broader omnichannel campaigns. A well-planned click-and-mortar strategy lets you launch online and reinforce it with in-store promotions.

With everything connected, you can move from concept to customer much faster—without adding extra overhead.

Expand your global reach without physical expansion

Opening new stores or showrooms—especially across international borders—isn’t always realistic (particularly for SMBs). A virtual showroom extends your reach by making products accessible to buyers and shoppers anywhere, without the costs of new real estate. For example, if you’re based in California, a buyer from Amsterdam can view your products and make an order from the virtual showroom platform. 

Tips for retailers and wholesalers:

• For B2B, use wholesale networks like JOOR, which connects thousands of brands with buyers worldwide, to put your products in front of retailers you’d never meet in person.
• For B2C, duplicate your showroom for different regions with localized pricing and availability, so shoppers get a tailored experience even if you only ship from one location.
• Pair virtual showrooms with in-store events and QR codes, tapping into showrooming and webrooming behaviors where customers blend online and offline exploration.

The result: greater exposure without added overhead.

Create immersive and interactive customer experiences

Engagement is where a virtual showroom shines. Instead of flipping through static images, shoppers can examine a product in 3D, drop it into their living room with AR, or click through shoppable hotspots to learn about products and features. This kind of interaction builds confidence, shortens the path to purchase, and can give you a competitive advantage.

Tips for retailers and wholesalers:

• Design your showroom scenes like you’d design a store floor. Tell a story with hero products and themed collections, then layer in comparisons and finish options.
• Use AR to give customers context at home, whether that’s a lamp on a nightstand or a sofa in the living room.
• Keep calls to action (CTAs) in view. Buttons like “Add to cart,” “Book a test drive,” or “Request wholesale pricing” should appear inside the showroom, not on a separate page.

💡Pro tip: If you’re stuck on how to connect physical and digital storytelling, keep in-store marketing best practices in mind—many of those tactics translate directly to virtual spaces.

Gather valuable data on product engagement

Unlike static catalogs, virtual showrooms generate actionable insights. You can see which products attract clicks, which finishes get explored, and where shoppers spend their time. That data informs both your digital strategy and your next in-store reset.

Real-time updates in your virtual showroom allow you to act faster and direct buyers to products and assortments that already have proven demand. 

Tips for retailers and wholesalers:

• Use QR codes and UTMs to connect physical displays to your showroom. A 2024 survey found that 64% of North American shoppers have scanned a QR code in-store, showing how mainstream this behavior has become.
• Run simple A/B tests. Try different hero products, CTAs, or scene layouts, then compare which drives more engagement or sales.
• Feed results back into your customer relationship management (CRM) or point-of-sale (POS) system to identify the products most likely to generate revenue.

By measuring product engagement inside your showroom, you’ll know exactly what resonates with buyers and consumers—and where to invest next.

Core technologies that power virtual showrooms

A modern virtual showroom runs on three core technologies that turn product discovery into an interactive experience: 3D visualization, try-before-you-buy through AR, and immersion through VR. For sellers, the goal is to understand what each technology does, where it fits, and what kind of setup it requires.

3D rendering and product visualization

3D is the foundation for virtual showrooms. A single 3D model can power your product-page viewer, your virtual showroom scene, and even marketing renders, so you can produce it once and reuse it in multiple contexts. 

Here’s how to get started with 3D rendering:

1. Choose the right formats for your needs. Use GLB/glTF for Android and web viewers (it works on most browsers) and USDZ for iPhone/iPad. These are the two formats most SMBs need—with no deep pipeline required.
2. Create or convert your assets. You can model from scratch, scan with a service, or use newer tools that generate 3D renderings from photos, which is handy for large catalogs with limited budget. We’ll cover more of the how-to later in this article.
3. Keep files light. Smaller textures and simpler geometry mean faster load times, which matter for mobile customers.
4. Start with priority SKUs. Digitize your top sellers and high-return items first, where 3D clarity can reduce uncertainty.

A 3D rendering alone can be enough if your product doesn’t need in-room context (for example, products like handbags or small electronics).

Augmented reality for “try before you buy”

AR lets shoppers place a life-size product in their space using a smartphone camera—ideal for furniture, décor, lighting, appliances, and any other item where fit and scale drive confidence. For B2B, AR helps preview fixtures or planograms onsite before you commit.

Here’s what you need to get set up with AR:

1. A phone and your 3D file: On iOS, Quick Look opens a USDZ file directly; on Android, Scene Viewer uses GLB/glTF. Most AR experiences launch from a simple button on your product page or within your virtual showroom.
2. Good lighting and realistic materials: The closer your textures look to the real thing, the more persuasive the AR will be.
3. Clear CTAs: “View in your room,” “See in your space,” or “Save to project” are persuasive CTAs that can reduce friction and help nudge buyers toward conversion at the exact decision moment.

AR and VR tools are becoming more accessible and affordable, making entry easier for smaller teams. Rapid market growth and projected expansion shows sustained vendor support and falling costs, making now is the time for SMBs to plan for AR investment.

Virtual reality or fully immersive experiences

VR places shoppers or wholesale buyers inside a space, which is great for complex, high-consideration journeys (like walking a living room layout, touring a “store-within-a-store,” or hosting a wholesale line review).

You can deliver VR in two ways: headset-based (using stand-alone devices for events and showrooms) or web-based experiences that simulate “first-person” navigation on a laptop or phone.

Here’s where VR technology fits—and where it doesn’t:

1. Use VR for depth, not every detail. VR shines when layout, scale, or storytelling need immersion. It’s overkill for simple SKU-browsing.
2. Consider shared sessions. For B2B, a rep can guide multiple buyers through a seasonal presentation. For B2C, VR technology can elevate popups and in-store kiosks or create social shopping experiences.
3. Plan for accessibility. Offer a non-VR fallback (like a standard 3D viewer or video tour) so every customer can engage, with or without a headset.

After a slowdown in previous years, AR/VR headset shipments grew in 2024, with analysts expecting further gains as prices fall and devices improve. This matters if you’re weighing in-store headsets for events or guided experiences, but it’s still a good idea to keep an eye on adoption signals. You might consider investing in 3D or AR before committing to full VR, especially if your budget is limited.

Virtual showrooms in action: B2B vs. B2C examples

Virtual showrooms are no longer confined to the fashion industry and enterprise retailers with deep pockets—they’re shaping how consumers shop everywhere. By looking at both B2B and B2C applications, retailers can see how these technologies serve as practical, revenue-driving tools.

B2B use case: Streamlining wholesale fashion with JOOR

JOOR shows how a virtual showroom can replace the bulk of physical sampling and trade show travel with digital assortments. The platform connects more than 14,000 brands with more than 650,000 buyers worldwide, allowing sales teams to showcase lines with interactive lookbooks, 360-degree imagery, and real-time ordering.

Takeaways for smaller businesses:

• Build a core digital assortment of top sellers, new products, and key colorways.
• Host short virtual line showings with embedded ordering, then follow with a limited physical sample set only where needed.
• Use saved assortments as templates for future seasons to speed repeat business.

By treating the virtual showroom as your primary wholesale stage—and physical samples as supporting assets—you’ll cut costs while increasing buyer coverage.

B2C use case: Configuring cars with Toyota’s virtual showroom

Toyota’s virtual showroom is a strong consumer example of how interactivity shortens the path to purchase. Shoppers can use the automotive virtual showroom to view cars inside and out with 360-degree rotation, customize trims or colors, and move seamlessly to actions like booking a test drive or requesting a price quote.

What can smaller businesses learn from Toyota’s platform?

• Offer close looks at key product features and finishes.
• Place primary CTAs inside the showroom viewer where they’re clearly visible—not on a separate page.
• Capture partial leads (like the customer’s chosen configuration and email) so you can follow up with them if they bounce before making a purchase.

This same pattern supports click-and-mortar models, where online configuration hands off to an in-store demo or pickup to close the sale.

B2C use case: Visualizing furniture at home with IKEA

IKEA’s Kreativ platform turns home furnishing into an AR shopping experience that reduces returns. Customers can design rooms in 3D, view items up close, place products at true scale, and see how multiple pieces fit together before buying. This not only boosts confidence but reduces costly returns.

Smaller retailers can look to IKEA’s virtual furniture showroom for plenty of inspiration to apply to their own businesses:

• Prebuild a few common room templates (studio, small living room) that fit your product offerings.
• Give scaled previews for larger items.
• Allow customers to save and share designs so store staff can pick up the conversation in person or via chat.

Context transforms the buying journey. Allowing customers to explore a car’s interior or visualize a sofa in their small apartment makes your virtual showroom not just a virtual gallery, but a trusted decision-making tool.

How to create a virtual showroom in four steps

A virtual showroom isn’t an enterprise-only project. With a clear plan and the right tools, you can now launch one in just weeks. All it takes is focusing on the assets you already have, the platforms that fit your use case, and the integrations that make it measurable.

Step 1: Digitize your products with 3D modeling

Start with the products that move your business. Prioritize your top sellers and high-return items (where visualization reduces uncertainty). Your goal is a small, high-impact 3D library you can reuse across product detail pages (PDPs), ads, and your virtual showroom.

Here’s what to do:

1. Pick a practical capture method. If your vendor has CAD files available, use them. Otherwise, consider outsourcing basic 3D modeling for hero SKUs, or test photogrammetry (a technique that converts photos into 3D models) for simple shapes. Aim for web-friendly formats: GLB/glTF for Android and web, and USDZ for iOS.
2. Set a performance budget. Keep textures optimized and file sizes lean so models load quickly on mobile. Test how assets look on mid-tier phones before you approve them.
3. Standardize naming and metadata. Include SKU, finish, and size in filenames so your team—and your platform—can automatically swap variants. This keeps your back end organized and saves you tons of time down the road.
4. Create one reusable master for each product. From a single 3D file, render cutouts, 360-degree spins, and short animations you can use in ads and PDPs.

A disciplined 3D pipeline lowers long-term production costs and gives your virtual showroom a consistent, high-quality look.

Step 2: Choose the right virtual showroom platform

Pick the virtual showroom technology that best fits your business needs, not the one with the flashiest demo. Is your primary use B2B wholesale selling or B2C consumer exploration (or both)? What are your must-have features?

Here’s an evaluation checklist—use this as a scorecard when comparing vendors:

• 3D and AR support: Native viewers for GLB/USDZ, “view in room” AR, hotspots, annotations
• Selling workflows: 
• For B2B: Price lists, order capture, assortments, buyer accounts
• For B2C: Cart/checkout, wishlists, appointments
• Content tools: Scene templates, easy updates, video support, multi-language/currency if needed
• Analytics: Event-tracking (scene views, hotspot clicks, add-to-cart), UTM fields, export to GA4/BI
• Integrations: Product catalog, inventory, pricing, and customer data with your ecommerce stack
• Admin and governance: Roles/permissions, version control, scheduled content sunsets

Demo or pilot the platform with a small collection first. If the platform makes it easy to update scenes, add variants, and embed CTAs, you’ve likely found the right one.

Step 3: Design the user experience and journey

Treat your virtual showroom like a well-run store: Make sure it has clear entry points, curated paths, and obvious next steps. Design for mobile first, keep decisions close to the product, and make help one tap away.

Here’s how to design the flow (and measure it):

1. Map a few core scenes: Each scene should have a clear CTA: add to cart, request wholesale pricing, book an appointment, or start checkout.
2. Use hotspots to answer questions: Place product specs, material callouts, or short demos directly on the product. This reduces cognitive load and reasons not to buy.
3. Build for accessibility and speed: Make sure your showroom has high contrast, alt text or transcripts for media, captioned video, and fast load times on cellular connections.
4. Track every interaction: Set up tracking for scene views, hotspot clicks, finish/size toggles, and CTAs so you can see where shoppers stall or convert.

Mirror your strongest in-store stories in your virtual showroom. If three pieces of living room furniture sell best as a set, create a “room” scene with a one-click bundle and a clear handoff to chat with a sales representative or book an in-store appointment.

Step 4: Integrate with your ecommerce ecosystem

Your virtual showroom should integrate with the rest of your business, not sit on an island. Connect catalog data, track behavior, and make it easy for shoppers to jump between digital and physical touchpoints.

Here’s how to make your showroom operational and trackable:

1. Sync product and inventory: Connect showroom scenes to live SKUs and availability so pricing and stock are always up-to-date.
2. Embed measurement from day one: Add UTM tracking codes to links and connect activity to Google Analytics (or your analytics tool) so you can compare engagement to revenue.
3. Bridge store and screen with QR: Print QR codes on endcaps, catalogs, or window signs that link directly to specific showroom scenes. Brick-and-mortar employees can use the same links to continue the conversation by phone or chat.
4. Close the loop with POS/CRM: Use sales systems to tie orders directly to scenes or campaigns, flag high-interest products for staff follow-ups, and set content “sunset dates” so promotions end on time.

Once your virtual showroom is integrated, small optimizations (like a clearer CTA or a better default finish) translate into measurable lift, the same way a better endcap does in-store. Over time, the data you collect will guide new products, pricing, and your next virtual showroom refresh.

Four virtual showroom platforms to consider in 2025

There are many virtual showroom software and platforms available to retailers and brands today. Choosing the right one comes down to your use case: wholesale selling, product-level 3D, or immersive AR/VR spaces.

Let’s take a look at four options:

1. Shopify virtual showroom apps (pilot quickly on your storefront)

For many SMBs, the fastest path is to test virtual showroom ideas with a Shopify app—either a 3D/AR viewer or a lightweight 3D virtual store experience embedded in your theme. Thanks to Shopify’s expansive App Store, you have multiple options. Here are just a few:

• Odyssey – 3D Virtual Stores: Creates a browsable 3D store environment inside your existing site, letting you showcase products in an immersive layout without custom development.
• Angle 3D Configurator – 3D & AR: Adds interactive 3D customization and AR viewing at the product level, which you can link from a curated “showroom” landing page.

These apps are best for SMB retailers who want to validate interactive 3D or a virtual showroom concept before investing in a bespoke build. You stay in the Shopify ecosystem, move quickly from idea to test, and learn what shoppers engage with. Then you can decide if a more robust virtual showroom platform is a good fit for your ecommerce business.

2. JOOR (for fashion/luxury wholesale)

If your priority is wholesale, JOOR is a marketplace and data-exchange platform for beauty, fashion, and home goods retailers that combines virtual showrooms, digital linesheets, and order capture inside a large buyer network. 

Brands use JOOR to simplify their B2B sales process and reach new retailers already using the platform. The same goes for retailers. Buyers can discover new brands to stock in their store via JOOR. 

You can show off your products using dynamic video, 3D interactive images, and audio. For example, share a video of your runway show, a video of you explaining the collection, and product performance reviews. 

Additionally, you can schedule virtual appointments with retail buyers to share details about the collection you’re selling. It also has a style board feature, so product assortments can be personalized to each buyer during online showroom appointments. 

You can arrange your products into specific collections depending on the buyer’s past purchases, region, and other factors to help simplify the process. 

JOOR is best for fashion and lifestyle brands that need B2B assortments, shoppable lookbooks, and retailer collaboration—plus embedded payments and ERP/PLM integrations.

3. BrandLab360 (for immersive VR/3D environments)

When your goal is an immersive brand space that runs in the browser (and optionally on headsets), BrandLab360 builds bespoke virtual retail stores with interactive 3D environments, integrated voice/video, and transactional handoffs. Their platform emphasizes web delivery—no apps or VR headsets required—with optional support for devices like Apple Vision Pro. 

With this platform, you can create any online store in a 3D digital format, including integrated live voice and video communication that links seamlessly to transactional ordering platforms.

Each virtual showroom environment can host unlimited users, allowing you to show your products to multiple buyers simultaneously. You can also invite people to their own private shopping experience. 

BrandLab360 is best for launches, editorial storytelling, and high-impact environments where you want shoppers or wholesale buyers to “walk” a space and interact with products.

4. iEnhance (for furniture and home goods)

If your catalog hinges on finishes, dimensions, and in-room context, iEnhance offers 3D visualization and AR for configurable products (think sofas, tables, and storage).

The platform positions itself as a 3D/AR personalization engine designed to move shoppers from static images to interactive exploration—useful for categories where fit and space drive confidence.

With iEnhance, you can speed up buyer consideration with real-time finish changes and AR sizing, then pass shoppers to checkout or to a store appointment.

iEnhance is best for furniture, décor, and home goods that benefit from AR “place in room” and on-the-fly configuration.

Best practices for a high-performing virtual showroom

High-performing virtual showrooms balance speed, accessibility, clear UX, measurement, and consistency with your physical store. These best practices will keep your virtual showroom simple to implement, budget-aware, and focused on results—not bells and whistles.

• Keep models fast and lightweight. Fast scenes convert better because shoppers don’t wait for assets to load. Keep your 3D files lean, use web-friendly formats, and preview on mid-range phones before you ship.
• Set KPIs for your digital showroom. Define your primary objectives so you can build your digital strategy around them. Common goals include spending less money on trade shows, increasing order values, reducing unsold stock, or shortening sales cycles.
• Invest in brand content. Make your content and the experience engaging by ensuring that buyers can view your merchandise from different angles. Write detailed product descriptions that answer all the questions a buyer may have. Include information about product materials, color options, price, where the product is made, size range, fit, and delivery dates.
• Create collections to spark ideas. Use your digital environment to showcase collections that retail buyers may not have thought of otherwise. Test different product assortment strategies and gather feedback from buyers and your team. 
• Create an interactive virtual showroom experience. Dynamic video, 3D images, and virtual samples are used to show clear, stylistic views of your products. Integrate with a chatbot or live chat function to ensure you’re always available if buyers have questions.
• Design for accessibility by default. Accessible design expands your audience and reduces friction. Follow WCAG 2.2 fundamentals so text and controls are easy to see, hear, and use.
• Keep digital and physical locations in sync. Great retail showrooming connects storytelling across channels. Your virtual and physical showrooms should share the same collections, messaging, and timing.
• Make the journey obvious. Design your scenes like a well-run store floor—clear entry points, helpful context, and obvious next steps. Keep decisions close to the product and make it clear that help is one tap away.

If you run an ecommerce business, there’s a good chance you’ve had to wrangle and upload images. Whether they were logo graphics for your website, high-quality studio photos of your products, or behind-the-scenes pictures to share on social media, images are an essential part of your online presence.

There are several common file types you can use on the web, and others that are better for print. Understanding when to use different image file formats helps you keep web pages lightweight, ensure quality, and streamline your workflow.

What are image file types?

Image file types are standardized formats for saving and displaying visuals, such as photos, graphics, and logos. Each format balances quality, file size, color support, transparency, and compatibility differently. Choosing the right image file type depends on where the image will appear (web or print), how it will be edited, and whether features like transparency or animation are needed.

Factors to consider when choosing an image file type

There are different types of image files for a reason, and these factors make some file types better than others for specific applications. Keep these core differences in mind:

Vector vs. raster

Vector and raster graphics refer to the way an image file is composed at its most basic level. Raster files are grids of tiny dots called pixels. The more pixels in an image, the higher the resolution. If you zoom far enough into a raster photo, you eventually will see those pixels, so there will always be a limit on how big the image can scale. Most photographs you work with will be raster images, and all of the graphics and images you see online are in a raster format, even if they originally were edited and exported from a vector file.

Vector files use mathematical equations to create shapes and lines, so you can enlarge them without losing definition. Businesses typically use vector files as master files for logos and graphic artwork.

High resolution vs. low resolution

When it comes to online images, bigger isn’t always better. Most are made of thousands of pixels. The more pixels that compose an image, the higher the resolution will be. That means the image is sharper, and you can post the picture clearly at a larger size.

However, if an online image has a resolution that’s too high, it might slow down the page load speed—which is bad for a website’s technical SEO—and be harder to share or store. File types like JPG and PNG are able to walk the line between quality and performance, which is why they are some of the most common file types.

Lossy vs. lossless compression

Compression is the act of digitally shrinking files, which makes them easier to manage and transmit online.

Lossless compression, as the name suggests, is a method of compression that retains all of the original information, like colors, brightness, sharpness, and the makeup of each individual pixel, while still making the image smaller. A lossless compression algorithm might look at an image and find identically colored pixels throughout. To save space, it will create an abbreviation for “black pixel,” so it doesn’t use memory for every single black pixel.

Lossy compression determines an acceptable amount of image degradation, which is a loss of detail and quality, in order to shrink the image. It may lump pixels together or merge similar shades of a certain color.

Image file types

You’re likely familiar with the main image file types like JPG, PDF, or GIF, but there are several more, each with its own strengths and weaknesses. Here are 10 image file types you might encounter:

JPEG or JPG

Short for: Joint Photographic Experts Group

File extensions: .JPEG or .JPG

As one of the most common image file formats, JPEGs (or JPGs) are good at keeping file sizes small while maintaining reasonable image quality. If you run an ecommerce business, it’s a great image format for your product photos pretty much anywhere you want to display an image online. You can use JPEG and JPG interchangeably as a file extension.

The JPEG format is a lossy raster image, so it’s prone to pixelation when zooming in. This is problematic when you’ve saved and reuploaded JPEGs multiple times, as they tend to become distorted. If you struggle with this issue, there are tools that can help with resizing photos, like Shopify’s Image Resizer.

PDF

Short for: Portable Document Format

File Extension: .PDF

A PDF is a file format that preserves the appearance of a document, allowing you to share it regardless of the software, hardware, or operating system you initially used to make the file. Created by Adobe as a proprietary format in 1993, PDFs became publicly available in 2008. They’ve since become a default way to share documents and high-quality images, and you can also upload PDFs to your website for readers to click and read. You can also open these files in a viewer like Adobe Acrobat.

If you run a business, you’ll likely use PDF files for materials such as multipage documents, style guides, and reports with multiple images. You may also find public-facing use for them as downloadable white papers or trend reports, which you can use as lead magnets.

PNG

Short for: Portable Network Graphics

File Extension: .PNG

The PNG file format is similar to JPEG, but not as ubiquitous. Unlike JPEGs, PNG is a lossless image format that allows for more detailed editing without losing quality. Despite the lossless compression, it’s not as high-resolution as other file formats, so you shouldn’t use it for printing.

The real strength of the PNG is its ability to include a transparent background. If you maintain a website for your company, the PNG format is likely the best image format for logos, graphics, and product photos. The ability to make the background transparent means you can place images of your products directly over the website background.

HEIF or HEIC

Short for: High Efficiency Image File or High Efficiency Image Container

File Extensions: .HEIF or .HEIC

A HEIF is a modern image format you can use to store photos and sequences of images, like bursts or animations. An HEIC is a type of HEIF file, and it’s the default file format for photos taken on iPhones and iPads. It is not an Apple-specific format, however. HEIF files are basically JPEG files, but with higher quality and a smaller size, thanks to technological advances in compression algorithms.

HEIF uses compression derived from the MPEG video format to create smaller, higher quality images. HEIF and HEIC files are not yet accessible by everyone, so you may have to convert them into JPEGs until the format is widely adopted.

GIF

Short for: Graphics Interchange Format

File Extension: .GIF

If you’ve clicked around the web at all, you’ve definitely seen animated GIFs. They have a very small image file size and allow for animation of multiple frames repeating in a loop. This type of file can contain still images too.

GIFs are small and load extremely fast, thanks in part to their having a limited color palette of 256 colors. You may use GIF format image types for animated images on your site, but you may also find uses for them where you want to display small, simple images that will load fast and not take up much bandwidth.

TIF or TIFF

Short for: Tagged Image File or Tagged Image File Format

File Extensions: .TIF (or .TIFF)

TIFF files are raster files that use lossless compression, meaning you can copy and edit them without losing information or quality. A TIFF file is great for storing images and photos for print, so you may use this image file type for a mailer, flyer, or brochure. However, TIFF is typically too big for web graphics, and it will cause your website to load too slowly on your users’ web browsers.

PSD

Short for: Photoshop Document

File Extension: .PSD

Photoshop is the most well-known photo editing software, so it’s no surprise that Adobe Photoshop’s proprietary image extension (.PSD) is a common file type. It’s a fairly specialized file type that’s not meant for image display. PSD files are not uploaded as images to your website, but are project files that allow you or someone else (likely a graphic designer) to edit images before exporting them as another file type for upload.

It’s also worth noting that PSD files open only in Adobe Photoshop, so they are useful mainly to designers and consumer-users of the software. PSD files include image layers, giving you the ability to edit with much more precision. Photoshop works only with raster image files and does not support vector graphics. In ecommerce, the main way you’d use a PSD file is to send a project to another person in your company or to a designer to work on before exporting a JPG, PNG, PDF, or another image file to upload.

AI

Short for: Adobe Illustrator

File Extension: .AI

Note: AI files (Adobe Illustrator, not artificial intelligence) are arguably one of the best image formats for logos, as they work with vector data instead of pixelated graphics. This means the lines in your logo will be perfectly sharp with no pixelation or degradation, no matter how big you enlarge it. That said, they are not built for display, so you likely will keep a master logo file in AI format but export a PNG or JPEG to display on your website.

Similar to Photoshop files (PSD), Adobe Illustrator files are a proprietary file format of Adobe, and are meant for use by designers. They aren’t file types that are displayed publicly online. What sets Adobe Illustrator documents aside is scalable vector graphics. Unlike Photoshop, which creates raster images made of many pixels, Illustrator uses vector image files. An AI file is perfect for keeping master files of your logos and graphics, so you can send them to designers or printers to achieve perfectly straight lines with no pixelation.

WebP

Short for: Web Picture

File Extension: .WebP

If you’ve ever dragged and dropped an image from your web browser, there’s a good chance you’ve come across a WebP. This web-specific image file can support transparency like PNGs and animated frames like GIFs, and works pretty similar to JPEGs. 

In recent years WebPs have become more common online as a catch-all internet image format. They have higher quality and compression ratios than JPEGs or PNGs, so WebP images are great for image-heavy websites that need to load quickly. Nearly all modern browsers support WebP; for older or legacy browsers, provide fallback formats if needed.

RAW

Short for: Nothing (it literally means “raw”)

File Extension: .RAW, .CRW, .NEF, .CR2, more

RAW files are unprocessed digital images. They’re uncompressed and contain as much data as possible. Digital photographers often snap pictures in this format and edit them later. RAW is a catch-all term that refers to a constellation of proprietary and non-proprietary file formats for different camera systems. Canon created the CRW and CR2 RAW file types, while Nikon developed the NEF file extension.

You won’t run across RAW image files online, but you will open them in editing software like Lightroom or Photoshop to edit and create different image file types for display, like JPGs and PNGs.

What type of strategy works the best when you need to grow your ecommerce business? You can focus your efforts on a viral marketing campaign that turns everyday customers into brand ambassadors, write a useful blog to generate organic leads online, or even hire a robust sales team to get the word out.

But one strategy to consider for growing your business is a product-led growth strategy, using methods like free trials and freemium models to help great products sell themselves. While this strategy still requires sales and marketing efforts to reach customers, it takes a different approach by getting products into the hands of customers as quickly as possible to prove their value.

Here’s how this type of growth strategy works, when it makes sense for your business, and the specific tactics that turn curious browsers into committed customers.

What is a product growth strategy?

A product growth strategy, also known as a product-led growth (PLG) strategy, is a type of business strategy that relies on product usage as the main driver for sales. By making it easy for customers to access and use your product through methods like freemium plans, product sampling, or free trials, a product-led growth strategy focuses on acquiring and retaining customers based on the value of the product itself.

Here are some of the key characteristics of a product-led growth strategy:

• Immediate value. This type of business growth strategy requires a low barrier to entry, making it as easy as possible for customers to access and use a product quickly.
• Transparent pricing structure. Since this type of strategy often includes a tiered pricing structure or subscription model, it’s important to put all pricing information upfront to avoid customers feeling tricked into further costs down the line.
• Paywalls. Companies strategically limit free access to create natural upgrade moments. These paywalls allow users to experience core aspects of the product, encouraging them to upgrade for the full experience.
• Data-driven. Product-led growth strategies rely on customer feedback loops to continually enhance the product experience (PX) and make consistent improvements to the product itself.
• Self-service. PLG strategies often include a self-service model, where customers can access and use products on their own without the help of a sales, customer support, or onboarding team—highlighting a product’s ease of use and simplicity.

Product-led growth vs. other growth strategies

1. Product-led growth strategy
2. Market development growth strategy
3. Diversification growth strategy
4. Market penetration growth strategy

No matter your business model, you will likely fall into at least one of four frameworks when growing your company—and a product growth strategy can overlap with all of them. Here’s a breakdown of the four primary types of growth strategies that companies can consider based on their business model, target market, and product offerings:

1. Product-led growth strategy

A product development strategy involves introducing new products or services in a market to stimulate growth by investing in research and development (R&D) and creating innovative new offerings. A company generating interest for their new software tool by launching a marketing campaign for free trials of the tool would fall into this category.

2. Market development growth strategy

A market development strategy involves selling existing products or services to new customers through methods like expanding into new geographical areas, identifying new customer segments in your existing market, and investing in new distribution channels for delivering offerings to a wider customer pool.

3. Diversification growth strategy

A diversification growth strategy requires companies to create new services, products, or product line extensions to increase sales by expanding a company’s offerings in an existing market. For example, a software company could expand into physical products that appeal to both its current customers and an untapped demographic.

4. Market penetration growth strategy

This growth strategy focuses on expanding a company’s market share in an existing market with aggressive pricing strategies designed to undercut competitors and new-and-improved products. A company using this approach might slash prices while upgrading features based on customer feedback to steal market share from competitors.

Benefits of a product growth strategy

A product-led growth strategy can benefit your business in a variety of ways, including:

• Lower customer acquisition costs. By engaging customers with a freemium plan or free trial of a product, this type of growth strategy can result in a lower customer acquisition cost (CAC)—the total cost of acquiring a single customer—and increase revenue without leaning as much on paid ads or long sales cycles with large sales teams reaching out to qualified prospects. 
• Opportunity for scalability. Product-led growth strategies are highly scalable because you can serve thousands of new users without proportionally expanding your sales team or expensive marketing budget.
• Shorter sales cycle. Using product-led growth strategies like product sampling can encourage users to engage with a product immediately, which shortens the sales cycle when compared to longer sales-led strategies involving lead qualification, pitching, and product demos.
• Quicker time to value. Time to value (TTV) is a metric for how quickly users realize the value of a particular product. By offering a low barrier to entry for product usage, a product-led growth strategy can create a low TTV—meaning customers realize the value of your products much faster than if they’re going through a long sales cycle.

Examples of product growth strategies in action

Sometimes, it’s easiest to learn by example. Here are some case studies of companies using product growth strategies to earn new customers and grow their businesses:

Free trials

Shopify uses a free trial model that lets ecommerce merchants sign up for the platform for free for three days with no credit card required. Merchants can build and customize their ecommerce stores and create product selections within that trial period, then decide from there whether they want to continue using the platform for $1 per month (for the first three months) after the trial period ends. Free trials like this allow users to experience the value of a product immediately and encourage those users to convert into paying customers by creating a sense of urgency.

Freemium business model

Zoom is a video conferencing platform that uses a freemium business model—which involves providing customers with a baseline version of a product for free, while offering paid plans for more features. Zoom offers a free version with unlimited meetings of up to 40 minutes each; paid plans include features like an AI companion, cloud storage, a meeting scheduler, and more.

The freemium strategy gives new users the chance to engage with a limited version of the product to quickly prove its value and create incentives for upgrading.

Growth loops

Communication platform Slack uses another popular product-led growth strategy to earn new customers: growth loops, which drive customer acquisition by including shareability as a key function of the product. Growth loops are cycles where the actions existing users take result in more users engaging with the product.

For example, an ecommerce merchant who downloads and uses Slack can easily share the tool with the rest of their team for easier communications. On the main menu of Slack, the merchant can click the “Invite people” button to generate an active invite link and send it to other team members through a channel like messaging, emailing, or onboarding documents. As more team members in the company join, Slack becomes a more effective communication tool for the merchant while organically bringing more users onto the platform—an effective growth loop.

Free samples

Beauty retailer Z Skin Cosmetics uses a product sampling strategy by including free samples of its cosmetic products in every order in an effort to turn one-time buyers into repeat customers. Z Skin Cosmetics strategically matches samples to each customer’s purchase—like including a neck cream sample for a customer who orders an eye cream product. This strategy can increase brand awareness for your product offerings and create a sense of reciprocity—where shoppers feel a subtle obligation to return the favor of a free gift by purchasing from you again.

How to execute a product growth strategy

If your business aligns with a product-led growth strategy, consider these best practices for how to execute that strategy successfully:

Create customer feedback loops

Since businesses using a product-led growth strategy rely on the quality of their products to grow their businesses, it’s essential to prioritize customer satisfaction. Customer feedback loops are structured processes for collecting and acting on customer questions and feedback.

You can gather user feedback with customer surveys, interviews, reviews, focus groups, or product feedback forms. For example, a messaging tool like Shopify Inbox can help you ask your customers relevant questions about your products in real time.

Ask, categorize, act, follow up (ACAF) is a helpful framework for organizing customer feedback loops:

• Ask. Request feedback from existing customers using email, live chat, or social media.
• Categorize. Collect and categorize feedback in a central location, so it’s easy for your team to access.
• Act. Implement updates in response to the feedback. 
• Follow up. Check in with customers about their experience with the updates. (This also shows customers that you value their continued feedback.)

Use quantifiable growth metrics

Measuring product-led growth with quantifiable metrics, or key performance indicators (KPIs), will help you understand and improve your customer experience. Consider product growth metrics such as:

• Activation rate. This is the percentage of users who complete a specific action with your product, like upgrading from a freemium plan to a paid plan.
• Customer lifetime value (CLV). Your CLV estimates the total profit your company generates from a single customer during their entire relationship with you.
• Net Promoter Score (NPS). NPS measures your customers’ likelihood of recommending your products.
• Churn rate. Your company’s churn rate is the percentage of customers who stop using your products.
• Active users. This measures the number of unique users engaging with your products over specific periods of time, such as daily active users (DAU), weekly active users (WAU), and monthly active users (MAU).

Businesses can utilize these metrics to inform decisions about how to improve the overall product experience and earn customers using a product-led growth strategy. For example, a software-as-a-service (SaaS) company with a low activation rate could focus efforts on simplifying the initial onboarding process or making it more interactive with a welcome survey to personalize the user journey. Similarly, a company could use a Net Promoter Score to evaluate how effectively it can introduce growth loops into a product update to earn new users.

Develop a knowledge base

A knowledge base is a centralized repository of important information about your business and product offerings, which enables users to easily answer questions and understand new features. Since product-led growth strategies often focus on a self-service model, comprehensive knowledge bases can empower customers to learn about a product without leaning as much on sales teams or customer support teams to explain how to use it.

Customers can interact with your knowledge base through FAQ pages on your website or via AI chatbots that respond directly to customers’ questions with information from that base. SaaS companies using this strategy can include in-app notifications within their software tools that pull from your knowledge base to walk customers through their user journey step by step, highlighting and explaining different product features.

Set up a customer referral program

Establish a referral program that encourages customers to recommend your products to others by using a clear incentive structure. You can offer discounts, free products, or exclusive access to new products before they’re officially released. Make it easy for your customers to recommend your products by providing pre-written messages and links that they can copy and share on any platform—email, social media, and messaging apps.

Use referral tracking software to manage, automate, and track how your customers are engaging with your referral program and make informed decisions about how to optimize your rewards and messaging.

Nobody likes telling customers that prices are going up. Yet growth, inflation, and the simple reality of running a business mean you’ll face this moment eventually. The difference between losing customers and keeping them often comes down to how you break the news about price increases.

A well-crafted price increase letter does more than announce new rates—it reinforces why customers chose you in the first place. By being transparent about the reasons and confident about your value, you can navigate this tricky conversation while preserving the relationships you’ve built with loyal customers. Whether you’re a service provider adjusting invoices, a subscription-based ecommerce brand, or a business-to-business (B2B) firm updating a contract, the way you communicate this change matters as much as the change itself.

This guide shows you exactly how to write price increase letters that maintain trust, plus two templates you can adapt for your business.

What is a price increase letter?

A price increase letter is your formal announcement to customers about an upcoming price adjustment for your products or services. Whether delivered as a letter or email, it needs to clearly state the new pricing, the effective date, and—here’s the crucial part—the reasons behind the price change that make sense from your customer’s perspective.

Think of a price increase announcement as a strategic opportunity. Yes, you’re delivering unwelcome news, but you’re also reminding loyal customers why your product or service is worth every penny. Done right, it can actually strengthen the relationship by showing that you respect them enough to be transparent and that you’ve exhausted other options before taking this step.

Price increases typically affect three main business models:

1. Service-based businesses. The broadest category, including freelancers, agencies, consultants, and tradespeople who charge for their time and expertise.

2. B2B suppliers. Companies that sell products, raw materials, or components to other businesses, often on a recurring basis.

3. Subscription and membership models. Businesses where customers pay a recurring fee for ongoing access to a product or service.

Why do companies raise prices?

Deciding when to raise prices is a key part of your pricing strategy. It should never be an arbitrary decision; it should be a response to specific business realities. Sending a price increase letter is appropriate in different scenarios, including these reasons that justify adjusting prices:

Increased operating costs

A rise in operating costs is the most common driver. When the costs to run your business go up, your profit margins shrink, unless you make price adjustments. These increased costs include:

• Higher costs of materials. The price of raw materials, component parts, or your software licenses has risen.
• Higher labor expenses. You’ve increased wages to attract talent or are paying more for benefits.
• General inflation. The overall cost of doing business—from utilities to rent to shipping—has risen.

Product or service enhancements

When you’ve invested in significantly improving your products or services, your pricing should reflect that added value. The key is that the customer is getting more for their money than they were before. These improvements might be:

• Powerful new features that add meaningful capability to a product they already use
• Higher-quality materials that make a product more durable or effective
• Faster, more responsive customer support so they get help when they need it
• Enhanced service experiences through faster shipping or a more personalized attention

Market realignment

Many businesses enter the market with intentionally low prices to attract customers and gain a foothold, a strategy known as penetration pricing. While this works for building an initial customer base, it rarely stays sustainable long-term.

Once you’ve built a strong reputation and a loyal following, it’s time to transition your pricing to match the value you deliver. This isn’t just a price bump; it’s a planned evolution reflecting your company’s growth and the proven track record. Aligning your rates with industry standards signals that you’re a competitive, high-value player in the market.

To fuel future growth

Staying competitive means investing in infrastructure and research and development. A price adjustment can generate the capital needed to maintain quality while funding innovations that will ultimately serve your customers better.

How to write a price increase letter

1. Give ample advance notice
2. Provide justification
3. Be direct, honest, and upfront
4. State the specific details
5. Express appreciation
6. Offer a point of contact
7. Consider offering valued customers a deal

The way you announce a price increase can determine whether customers accept it grudgingly or take their business elsewhere. These seven strategies help shift focus from what customers lose (lower prices) to what they keep (exceptional value):

1. Give ample advance notice

Customers handle price increases better when they have time to process and plan. Provide advance notice so your customers can address their budgets. The standard for how much notice to give is typically 30 to 60 days, but for business-to-business (B2B) contracts or high-value annual subscriptions, 90 days is even better.

2. Provide justification

Customers are more accepting of a price increase if they understand the reason behind it. Connect the change to a tangible benefit for them or a clear business necessity. Explain that increased operating costs necessitate the change in order to maintain the continued quality they expect, or that the adjustment lets you invest in new features they’ve requested. Be honest without being overly apologetic.

If you don’t already have a clear statement of why someone should pick your product over another company’s merchandise, consider articulating your value proposition. Remind existing clients why they do business with you. Briefly mention your product’s or service’s benefits, recent improvements you’ve made, or the exceptional support you provide. Show them that even at a new price point, they are still receiving excellent value.

3. Be direct, honest, and upfront

Don’t bury the lead. State the letter’s purpose in the first paragraph, but do so with sincerity. While you should be confident in the value you provide, it’s crucial to also be honest and acknowledge that you’re delivering difficult news.

Customers appreciate transparency far more than corporate spin. A vague introduction will only make them feel misled, while a tone that’s overly cheerful or unapologetic can feel dismissive. Start with a clear and respectful opening that owns the change. Instead of: “We’re excited to announce some updates to our service offerings,” try something more direct and honest. Here’s an example: “We’re writing to let you know about an upcoming change to our pricing. We value your business, so we wanted to share this news with you directly.”

4. State the specific details

Avoid ambiguity by being specific. Your announcement should explicitly outline:

• The exact plan, product, or service that is changing
• The old price versus the new price
• The specific date the new pricing will take effect for their account

5. Express appreciation

Acknowledging your customers’ loyalty and importance softens the blow significantly. Phrases like “valued customer” show your appreciation, as do references to their “continued support” or “continued patronage.”

6. Offer a point of contact

Demonstrate that you’re open to discussion by providing a direct point of contact for questions. Instead of a generic email address, which can feel like a black hole, provide the name and email of a specific person, like the customer’s account manager or a department head. This personal touch demonstrates a genuine willingness to hear their concerns and assures them their message will be read by a real person.

7. Consider offering valued customers a deal

To mitigate the possibility of losing clients, especially for many who are on legacy plans (older, discontinued price tiers), consider offering them a chance to lock in the old price if they sign up for an annual plan or a discount for early renewal. This gives your clients a sense of control and rewards their business.

Price increase announcement letter template

The exact wording you use will need to be adjusted for your own business’s circumstances, but here’s a general price increase letter template for an initial announcement.

Subject: An important update about our pricing

Dear [Customer Name],

On behalf of [Company Name], I wanted to let you know about an upcoming change to our pricing structure. After careful consideration, we are implementing a price increase effective [effective date].

For more than [number] years, we have been committed to providing you with [high-quality services/high-quality products] at a competitive price. Due to [State the primary reason, e.g., significantly increased operating costs, investments in key product improvements, rising costs of materials], we have adjusted our prices to ensure we can maintain the level of quality and innovation you have come to expect from us.

The price adjustment will allow us to continue [Mention a specific benefit, e.g., investing in new features, expanding our customer support team, improving our infrastructure]. We recently launched [Mention one or two improvements or added value points] to provide you with more value, and this change will help us continue that momentum.

Your new price for [product/service] will be [new price]. This change will be reflected on your invoice starting with your next billing cycle after [effective date]. All customers on existing rates will remain at their current rate until that date.

We deeply express our appreciation for your business and understanding. Our commitment to providing you with an exceptional experience remains our highest priority. If you have any questions, please don’t hesitate to reach out to our team at [business contact email/phone number].

Warm regards,

The [Company Name] team

Price increase reminder letter template

Sending a reminder about a week before the change takes effect helps ensure that your customers or clients are informed. It keeps your new pricing structure top-of-mind and shows professionalism.

Subject: Upcoming pricing update on [effective date]

Dear [Customer Name],

This is a friendly reminder that our new pricing structure, which we announced last month, will go into effect on [effective date].

As a valued customer, we wanted to ensure you had this update well in advance of your next invoice. As of the [effective date], the price for your [product/service] will be [new price]. This adjustment will allow us to continue delivering the continued quality and service you deserve.

We are so grateful for your business, and we appreciate your continued support. If you have any questions about your account or this update, please feel free to call or email us at [business contact email/phone number].

Sincerely,

The [Company Name] team 

We are thrilled to announce a landmark update to the Shopify platform: The product variant limit has officially been raised from 100 to 2,048 variants per product.

This isn’t just an incremental increase; it’s a fundamental expansion of what’s possible on Shopify. For years, going above 100 variants has been one of the most requested features from merchants with complex catalogs. We listened. We’ve re-architected a core part of our platform to deliver one of the highest variant limits in commerce, giving you the power to manage intricate product lines and merchandise your catalog exactly as you envision.

Read on to learn about the importance of high-variant catalog support, how we tackled this exciting project, and more. 

The power of choice: meet modern customer demand and boost conversions

In today’s competitive market, choice is everything. Consumers have come to expect a wide array of options, and the brands that deliver on this expectation are the ones that win.

Give the customer what they want

As consumer choice has expanded, so have expectations. Buyers now want to find their perfect option, whether it’s a specific color, fabric, pattern, or material. Product phenomena like the Stanley Quencher—celebrated by fans globally with each new colorway drop—showcase the power of variety. The fastest-growing brands are finding immense success through limited-edition product drops, brand collaborations, and strategies that lean heavily into providing customers with an abundance of choice. With 2,048 variants, you now have the runway to execute these strategies without compromise.

A better buyer experience that converts

Beyond meeting expectations, consolidating all your product variants onto a single page delivers significant business benefits. It creates a seamless shopping experience and a powerful marketing asset.

By using a single product detail page, you concentrate all your efforts from SEO, ad spend, and social marketing onto one canonical URL. This means better search rankings and more efficient campaigns. Once a visitor lands on your product page, they can explore every available option without needing to navigate away or risk bouncing because they don’t immediately see their desired choice.

Industry-specific support 

While 100 variants may be sufficient for some, many industries require far more flexibility. For example, furniture companies often offer items that come in multiple sizes, colors and materials, quickly blowing past the 100-variant limit. This is also common for apparel companies that sell bras, often merchandised in countless sizes and colors. For these industries, having access to a higher-variant limit was not a nice-to-have, it was essential to their merchandising strategy.

From clunky workarounds to a single, simple workflow

Given the clear importance of offering more choice, merchants have developed a number of creative solutions over the years to work around the 100-variant limit. These included splitting a single product across multiple product pages, custom development, or using third-party apps to stitch listings together on the storefront. While necessary for brands looking to merchandise more than 100 variants, these approaches created friction, adding setup costs, complexity, and ongoing management overhead.

Our goal was to make offering high-variant products seamless, eliminating the need for complicated workarounds and replacing them with the simple, intuitive product creation flow you already know. We knew it would be a big undertaking, requiring significant updates to our underlying data models and APIs.

The project: a multiyear endeavor 

We first needed to fundamentally rethink how products were supported inside the platform.The sheer amount of data for high-variant products was no longer compatible with the design of the REST Admin API. So we updated the GraphQL Admin API in April 2024, releasing a new version of the product APIs that supported 2,048 variants. This kicked off a large-scale migration, where thousands of Shopify partner apps had to migrate to our new APIs in order to support 2,048 variants, or else merchants would have a broken or downgraded experience. 

Our partners showed up in a big way. Through community Q&As, surveys, and hundreds of direct conversations, this deeply collaborative effort between Shopify and our partner ecosystem was one for the record books. We want to give a huge shoutout to the more than 6,500 app partners who migrated to the new APIs, ensuring the entire Shopify ecosystem is ready to support your most complex products. This platform-wide upgrade makes the whole ecosystem faster and more powerful for every merchant, and this variant increase is the first incredible result of that shared investment.

Built for scale, engineered for speed: the Shopify difference

Our goal was to deliver a comprehensive solution that sets a new benchmark for quality and performance, engineered on three core principles: ease of use, reliable performance, and an industry-leading limit.

Same admin, more variants

Despite all the change we were doing behind the scenes with our data model and APIs, it was important to us that the increase of the variant limit didn’t add any additional complexity to creating products. And we delivered. The process for creating a product in Shopify is exactly the same as it used to be—you can just add more variants.

Performance that keeps pace with your growth

As the number of variants grows, so does the complexity of the data required to manage them. We knew that simply increasing the limit wasn’t enough; the experience had to be blazing fast for both you in the admin and your customers on the storefront.

An entire team was dedicated to performance, and the results are transformative. This investment in our core infrastructure has also yielded benefits across the board. Creation time of products at the 2,048-variant limit improved by 10 times over the course of the project, and single variant products are now 33% faster in the admin.

A differentiated variant limit

If you’ve shopped around in the ecommerce software world, you’ve probably noticed that it’s uncommon to find a variant limit over 500. And this is understandable, given the significant investment of infrastructure required and the fact that the vast majority of merchants don’t need support for this complexity. However, at Shopify, we support some of the most complex catalogs in the world, and that requires going above 1,000. We ultimately landed on 2,048 to ensure merchants had plenty of headroom for their most complex products.

Get started with 2,048 variants today

To get started creating or editing a product with more than 100 variants in Shopify admin, simply add your options and option values all the way up to the new limit of 2,048. It’s the same intuitive workflow, now supercharged for your most complex products.

To learn more, visit the Shopify Help Center.

We are thrilled to announce a landmark update to the Shopify platform: The product variant limit has officially been raised from 100 to 2,048 variants per product.

This isn’t just an incremental increase; it’s a fundamental expansion of what’s possible on Shopify. For years, going above 100 variants has been one of the most requested features from merchants with complex catalogs. We listened. We’ve re-architected a core part of our platform to deliver one of the highest variant limits in commerce, giving you the power to manage intricate product lines and merchandise your catalog exactly as you envision.

Read on to learn about the importance of high-variant catalog support, how we tackled this exciting project, and more. 

The power of choice: meet modern customer demand and boost conversions

In today’s competitive market, choice is everything. Consumers have come to expect a wide array of options, and the brands that deliver on this expectation are the ones that win.

Give the customer what they want

As consumer choice has expanded, so have expectations. Buyers now want to find their perfect option, whether it’s a specific color, fabric, pattern, or material. Product phenomena like the Stanley Quencher—celebrated by fans globally with each new colorway drop—showcase the power of variety. The fastest-growing brands are finding immense success through limited-edition product drops, brand collaborations, and strategies that lean heavily into providing customers with an abundance of choice. With 2,048 variants, you now have the runway to execute these strategies without compromise.

A better buyer experience that converts

Beyond meeting expectations, consolidating all your product variants onto a single page delivers significant business benefits. It creates a seamless shopping experience and a powerful marketing asset.

By using a single product detail page, you concentrate all your efforts from SEO, ad spend, and social marketing onto one canonical URL. This means better search rankings and more efficient campaigns. Once a visitor lands on your product page, they can explore every available option without needing to navigate away or risk bouncing because they don’t immediately see their desired choice.

Industry-specific support 

While 100 variants may be sufficient for some, many industries require far more flexibility. For example, furniture companies often offer items that come in multiple sizes, colors and materials, quickly blowing past the 100-variant limit. This is also common for apparel companies that sell bras, often merchandised in countless sizes and colors. For these industries, having access to a higher-variant limit was not a nice-to-have, it was essential to their merchandising strategy.

From clunky workarounds to a single, simple workflow

Given the clear importance of offering more choice, merchants have developed a number of creative solutions over the years to work around the 100-variant limit. These included splitting a single product across multiple product pages, custom development, or using third-party apps to stitch listings together on the storefront. While necessary for brands looking to merchandise more than 100 variants, these approaches created friction, adding setup costs, complexity, and ongoing management overhead.

Our goal was to make offering high-variant products seamless, eliminating the need for complicated workarounds and replacing them with the simple, intuitive product creation flow you already know. We knew it would be a big undertaking, requiring significant updates to our underlying data models and APIs.

The project: a multiyear endeavor 

We first needed to fundamentally rethink how products were supported inside the platform.The sheer amount of data for high-variant products was no longer compatible with the design of the REST Admin API. So we updated the GraphQL Admin API in April 2024, releasing a new version of the product APIs that supported 2,048 variants. This kicked off a large-scale migration, where thousands of Shopify partner apps had to migrate to our new APIs in order to support 2,048 variants, or else merchants would have a broken or downgraded experience. 

Our partners showed up in a big way. Through community Q&As, surveys, and hundreds of direct conversations, this deeply collaborative effort between Shopify and our partner ecosystem was one for the record books. We want to give a huge shoutout to the more than 6,500 app partners who migrated to the new APIs, ensuring the entire Shopify ecosystem is ready to support your most complex products. This platform-wide upgrade makes the whole ecosystem faster and more powerful for every merchant, and this variant increase is the first incredible result of that shared investment.

Built for scale, engineered for speed: the Shopify difference

Our goal was to deliver a comprehensive solution that sets a new benchmark for quality and performance, engineered on three core principles: ease of use, reliable performance, and an industry-leading limit.

Same admin, more variants

Despite all the change we were doing behind the scenes with our data model and APIs, it was important to us that the increase of the variant limit didn’t add any additional complexity to creating products. And we delivered. The process for creating a product in Shopify is exactly the same as it used to be—you can just add more variants.

Performance that keeps pace with your growth

As the number of variants grows, so does the complexity of the data required to manage them. We knew that simply increasing the limit wasn’t enough; the experience had to be blazing fast for both you in the admin and your customers on the storefront.

An entire team was dedicated to performance, and the results are transformative. This investment in our core infrastructure has also yielded benefits across the board. Creation time of products at the 2,048-variant limit improved by 10 times over the course of the project, and single variant products are now 33% faster in the admin.

A differentiated variant limit

If you’ve shopped around in the ecommerce software world, you’ve probably noticed that it’s uncommon to find a variant limit over 500. And this is understandable, given the significant investment of infrastructure required and the fact that the vast majority of merchants don’t need support for this complexity. However, at Shopify, we support some of the most complex catalogs in the world, and that requires going above 1,000. We ultimately landed on 2,048 to ensure merchants had plenty of headroom for their most complex products.

Get started with 2,048 variants today

To get started creating or editing a product with more than 100 variants in Shopify admin, simply add your options and option values all the way up to the new limit of 2,048. It’s the same intuitive workflow, now supercharged for your most complex products.

To learn more, visit the Shopify Help Center.

It doesn’t take an MBA to know that a business needs to make a profit to keep going. You’ve likely seen some variation of the South Park–inspired meme: “Phase 1: [basic business idea] Phase 2: ? Phase 3: Profit.”

But here’s what matters for your business: Profit isn’t just one number. Different profit margin measures reveal different truths about your company’s financial performance—and understanding the complete picture, from gross to operating to net margins, helps you spot opportunities to boost profitability.

This guide breaks down each margin type, with formulas, real examples, and industry benchmarks, so you can evaluate your business performance and identify exactly where to focus your efforts to improve your profits.

What is gross margin?

Gross margin, also known as gross profit margin, measures how much money your business keeps after paying the direct costs of making and delivering your products. These direct costs include raw materials and the labor directly involved in production. When your gross margin is 30%, for example, you’re keeping 30¢ for every dollar of sales.

Why track gross margin? It helps you spot when production costs are eating into profits. This signals when you might need to raise prices, negotiate better deals with suppliers, or find more efficient production methods.

Gross margin formula

Here’s the formula to calculate gross margin:

[(total sales revenue – cost of goods sold) / total sales revenue] x 100 = gross margin

This straightforward calculation uses two key numbers from your income statement. Total revenue (also called net sales) equals your gross sales minus any returns or discounts. Cost of goods sold (COGS) covers your direct production expenses—the raw materials and manufacturing labor that go directly into creating your products.

Gross margin example

Let’s see this in action: Say a women’s apparel retailer generated $50,000 in total sales during the second quarter, with direct production costs of $27,000.

[($50,000 – $27,000) / $50,000] x 100 = 46%

This 46% gross margin means the retailer kept 46¢ from every dollar of second-quarter sales after covering direct production costs.

What is operating margin?

Operating margin, or operating profit margin, takes a broader view of your costs. While it still considers production expenses in relation to revenue, this metric captures your entire operational picture.

Operating margin includes all COGS, plus all your other operating expenses—rent, research and development, administrative costs, marketing, salaries, and non-cash expenses like depreciation and amortization. It doesn’t include non-operating costs like interest payments and taxes.

You’ll also hear operating margin called return on sales (ROS), which highlights its real value: showing how efficiently your company transforms sales from core operations into actual profit.

Operating margin is one measure of business management effectiveness. Although you can’t always control raw material costs, you do have more control over decisions about rent, equipment, ecommerce platforms, marketing spend, and staffing—all of which directly impact profitability. That’s why investors compare operating margins when evaluating companies in the same industry—it shows which management teams are making smarter operational choices.

Operating margin formula

To find your operating margin, first calculate operating income: total revenue minus all operating expenses (including COGS, depreciation, and amortization).

Then apply this formula:

(operating income / total sales revenue) x 100 = operating margin

Operating margin example

Building on our apparel retailer example: The same business that generated $50,000 in sales with $27,000 in COGS also had $15,000 in operating expenses (including $8,000 in rent and utilities, $5,000 in marketing, and $2,000 in administrative costs).

Operating income = $50,000 – $27,000 – $15,000 = $8,000

Operating margin = ($8,000 / $50,000) x 100 = 16%

This 16% operating margin shows the retailer kept 16¢ from every sales dollar after covering both production and operational costs—revealing the true efficiency of the business operations.

What is net profit margin?

Net profit margin represents your bottom line: the percentage of revenue that becomes actual profit after every expense. This includes COGS and operating expenses, as well as interest payments, taxes, and any one-time costs like restructuring charges or lawsuit settlements.

Net profit margin answers the ultimate question: How much profit does your business actually generate from each dollar of sales? This metric matters because it shows whether your business model truly works after accounting for all costs of doing business.

Net profit margin formula

The net profit margin formula captures your complete financial picture:

(net income / total sales revenue) x 100 = net profit margin

Net income appears at the bottom of your income statement—hence the term “bottom line”—after subtracting all expenses from total revenue.

Net profit margin example

Continuing with our retailer example: After the $8,000 in operating income, the business paid $1,500 in interest on a business loan and $2,000 in taxes.

Net income = $8,000 – $1,500 – $2,000 = $4,500

Net profit margin = ($4,500 / $50,000) x 100 = 9%

This 9% net profit margin means the retailer kept 9¢ as actual profit from every dollar of sales—the true measure of business profitability after all financial obligations.

Gross margin vs. operating margin vs. net profit margin

• How they’re similar. All of these metrics measure financial health by showing how efficiently your company converts sales into profit. They appear as percentages, where higher numbers signal better performance. All of these metrics factor in total revenue and production costs.
• How they’re different. Gross margin focuses narrowly on profitability after direct manufacturing and distribution costs (COGS). Operating margin paints the complete operational picture, including COGS plus every operating expense—from rent and marketing to depreciation and amortization. Net profit margin includes all of that, while also accounting for all other expenses (e.g., interest payments, taxes, and any one-time costs). 

Calculating each margin type reveals different insights about your business. Gross margin shows production efficiency, operating margin demonstrates management effectiveness, and net profit margin proves overall business viability. Together, they tell your complete profitability story.

Comparison table: gross vs. operating vs. net profit margin

To help you diagnose specific business challenges and opportunities, here’s a breakdown of when to use each type of margin metric: 

.tg {border-collapse:collapse;border-spacing:0;}
.tg td{border-color:black;border-style:solid;border-width:1px;
overflow:hidden;padding:9px 15px;word-break:normal;vertical-align:top;
background-color:#d9d2e9;}
.tg th{border-color:black;border-style:solid;border-width:1px;
font-weight:bold;overflow:hidden;padding:9px 15px;word-break:normal;
background-color:#d9d2e9;}
.tg .tg-header{text-align:left;vertical-align:top}
.tg .tg-cell{text-align:left;vertical-align:top}

What is a good profit margin?

A good profit margin depends entirely on your industry, business model, and growth stage. Software companies might achieve 80% gross margins, while grocery stores operate between 1% and 5%. The key is understanding your industry’s benchmarks and tracking whether your margins improve over time.

According to CSIMarket data, the total market gross margin reached 45.76% in Q2 2025, while net profit margins averaged between 9.05% and 10.26% in recent quarters. But these overall market averages mask enormous variation between sectors.

Profit margins by industry (2025)

Industry margins vary dramatically based on business models, competition levels, and cost structures. Here’s what different sectors achieve, on average:

High-margin industries, on average (higher than 40% gross margin):

• Software (system and application): 72% gross margin
• Financial services (non-bank and insurance): 68% gross margin
• Pharmaceuticals: 70% gross margin
• Apparel: 54% gross margin

Moderate-margin industries, on average (20%–40% gross margin):

• Consumer electronics: 37% gross margin
• Home goods and furniture: 29% gross margin
• Health care products: 56% gross margin

Low-margin industries on average (less than 20% gross margin):

• Farming and agriculture: 15% gross margin
• Steel: 15% gross margin
• Health care services: 13% gross margin

How to benchmark your margins

Comparing your margins against industry standards helps identify improvement opportunities. Follow these steps to benchmark effectively:

• Find your industry baseline. Research margin data for your specific sector using resources like industry associations, financial databases, or public company filings. Remember that your business model matters. For example, if you run a dropshipping business, you’ll have different margins than a manufacturer.
• Compare similar business sizes. A startup’s margins differ from established companies. Startups often accept lower margins initially while building scale, and mature businesses should achieve industry-standard or better margins.
• Track trends over time. Your absolute margin matters less than its direction. Improving margins quarter over quarter signals healthy business growth, even if you’re below industry average.
• Consider your value proposition. Premium brands command higher margins through pricing power. If you compete on price, expect lower margins but higher volume. Align margin expectations with your product strategy.

How to improve your profit margins

Boosting profit margins requires adjusting costs and revenue from multiple angles. The strategies you choose depend on which margins need improvement. For example, gross margin improvements require different tactics than operating margin optimization.

Strategies to increase gross margin

Gross margin improvements come from either raising prices or reducing direct costs. Here’s how to achieve both:

• Optimize your pricing strategy. Test price increases on your bestselling products first—loyal customers often accept reasonable increases for products they value. Bundle complementary products to increase average order value without seeming expensive. Create premium versions of popular products to capture more value from less price-sensitive customers.
• Negotiate with suppliers. Higher unit volume commitments often unlock better rates, so consolidate orders when possible. Request quotes from multiple suppliers to create competition. Suppliers sometimes offer discounts for predictable orders, so consider longer payment terms if cash flow allows.
• Reduce production waste. Audit your production process to identify where materials get wasted. Small improvements in cutting patterns, packaging efficiency, or quality control can significantly impact margins. Track defect rates and address root causes rather than accepting waste as inevitable.
• Improve inventory management. Dead stock ties up capital and eventually requires markdowns. Use inventory management software to optimize order quantities. Focus purchasing from proven suppliers and test new products in small batches.

Strategies to reduce operating expenses

Operating margin improvements require examining every aspect of running your business beyond production:

• Automate repetitive tasks. Customer service chatbots, email marketing automation, and inventory management systems reduce labor costs while improving consistency. The upfront investment pays off through ongoing savings.
• Renegotiate fixed costs. Review contracts for rent, insurance, software subscriptions, and utilities annually. Market rates change, and vendors often offer better deals to retain customers. Even 10% savings on fixed costs can directly improve your operating margin.
• Optimize marketing spend. Track return on ad spend (ROAS) by channel and cut underperforming campaigns. Focus your budget on channels delivering profitable customers, not just traffic. Email marketing and content marketing often deliver higher margins than paid advertising, so it’s worth investing time into those longer-term marketing strategies.
• Streamline operations. Map your workflows to identify bottlenecks and redundancies. Cross-train team members to handle multiple roles during slower periods. Consider outsourcing non-core functions if specialized providers can deliver better value.

Profit margin calculator and tools

Calculating margins manually works for spot checks, but automated tools help you track profitability consistently and identify trends before they become problems.

Beyond basic calculators, consider these tools for comprehensive margin analysis:

• Accounting software integration. Connect your ecommerce platform to accounting software for real-time margin tracking. This automation eliminates manual calculations and provides up-to-date profitability data.
• Product profitability analysis. Use analytics tools that calculate margins by product, including all associated costs like shipping and returns. This granular view reveals which products truly drive profits.
• Scenario planning tools. Model how changes in costs or prices impact margins before implementation. Testing scenarios helps you make data-driven decisions about pricing and cost management.
• Dashboard reporting. Set up automated reports that track margin trends over time. Visual dashboards make it easy to spot problems early and celebrate improvements.