Once the two versions are ready, the demo version is distributed as widely as possible. Users find it and try it out. If they like it, they pay for the full version, which is promptly sent to them. This is how the system works, more or less. All a person needs to release a shareware product is a computer, some software, and a lot of time.
Advertising is cheap on the net and no products are shipped in boxes, so costs are extremely low.
The profit margin for shareware is exceptionally good. The user always gets to try your product out before they buy it. Everybody who pays is getting their money's worth. Shareware also has several problems. To succeed at shareware, you need to write a program good enough for people to pay their real, hard-earned money for it.