Quick answer
Shopify subscriptions run on two objects. Selling plans define the offer: the frequency, the discount, and the billing rules, attached to a product or variant. Subscription contracts are the live agreement created automatically when a customer checks out, holding the variant, plan, payment method, and addresses. An app (Shopify's free first-party Subscriptions app or a third-party one) manages the selling plans and automates billing, and the customer needs a payment method Shopify can charge on schedule without them present.
Most explanations of Shopify subscriptions start with an app comparison. That's backwards. The apps all sit on top of the same native machinery, so understanding the machinery is what lets you tell a real limitation from an app's marketing.
Selling plans: the offer
A selling plan is the recurring offer itself. It lives in a selling plan group (for example "Subscribe and save") and defines three policies: billing (when the customer is charged), delivery (when product ships), and pricing (the subscription discount). Selling plans attach to specific products or variants, and a product can carry several plans or be sold subscription-only.
There are two shapes. Pay-as-you-go, where the customer is billed each delivery cycle, which is the standard subscribe-and-save. And prepaid, where the customer pays once upfront and receives deliveries on a cadence until the term is fulfilled. The selling plan is where that choice is set.
Subscription contracts: the agreement
When a customer completes checkout on a product with a selling plan, Shopify creates a subscription contract automatically. The contract holds the specifics: the variant, the chosen plan, the payment method to charge for future billing, and the billing and shipping addresses.
One detail matters more than any other here, and it trips up brands constantly. The contract is detached from the plan. Once it exists, changing the original selling plan does not change existing contracts. If you edit your subscribe-and-save discount, current subscribers keep their old terms unless you update their contracts directly. New terms apply to new sign-ups.
Payment methods and billing
Recurring billing needs a payment method Shopify can charge again without the customer at the checkout. That's a vaulted payment method, and it's why subscriptions require a payment gateway that supports them. Shopify Payments supports subscriptions; PayPal Express works when the merchant is approved for reference transactions. Not every gateway qualifies, so eligibility is worth checking before you design the program.
From there the app automates the cycle. On each billing date it creates a billing attempt against the contract's payment method, which produces a transaction and an order, the same as any other sale. When an attempt fails, the app's dunning logic decides how and when to retry.
First-party app vs third-party apps
Every subscription app on Shopify, including Shopify's own, builds on these same objects: selling plans, contracts, vaulted payment methods, and billing attempts. The difference is what they layer on top.
| Capability | Shopify Subscriptions app (first-party) | Third-party apps |
|---|---|---|
| Cost | Free | Usually monthly fee plus a share of subscription revenue |
| Subscribe-and-save and prepaid | Yes | Yes |
| Advanced retention (dunning, winback) | Basic | Often more extensive |
| Bundles and build-a-box | Not with native bundles | Available on apps that support it |
| Customer portal depth | Standard | Often richer, more brandable |
This is why "which app" is the wrong first question. The native layer sets what's possible; the app sets how much of it is handled for you and how much it costs. Named apps like Recharge, Skio, and Loop are examples of the third-party tier, not a ranking.
Where subscriptions can and can't run
To pre-empt the obvious question: subscriptions aren't limited to your online store. They sell through the online store and, with Shopify POS, in person, as long as Shopify Payments is enabled. POS has real limits though. Existing contracts have to be managed online, not on the POS device, and ship-to-carry-out orders and split payments aren't supported in store. Plan the management experience for the online store first, since that's where every contract is ultimately edited.
Written by Andrew Zam, co-founder of Liquid Lemon, a Shopify / Shopify Plus design + development studio. For how this comes together on a storefront, see our guide to Shopify subscription storefronts. Platform behavior changes, so confirm current Shopify documentation before you build.
