Shopify vs. Amazon: An In-Depth ComparisonJune 30, 2020 in Blog
We know why you’re here.
You probably had an awesome business idea and are now looking to take a shot at building a business online. We bet you had the same question as the other readers who visited this page: What platform should I work with?
Shopify and Amazon are two of the biggest names in ecommerce, and we understand why you’ve narrowed your search to these giants.
Every business has different needs, and these platforms have some very important feature differences that you should consider when making the final choice.
An Overview of Amazon and Shopify
Both Amazon and Shopify allow business owners to promote and sell their products online. But a quick visit to these platforms immediately reveal their differences. While Amazon shows you multiple brands that fit your search keywords, Shopify shows you websites that market only one brand.
This is because Amazon is an online marketplace while Shopify is an ecommerce platform.
As a marketplace, Amazon allows third-party sellers to promote their products on the website. The inventory belongs to the sellers, but Amazon also sells their own products, effectively competing with other sellers. Amazon, in fact, is more similar to eBay than it is to Home Depot or Target.
Shopify, on the other hand, allows business owners to make their own websites that show only their brand. So customers who go to a Shopify-hosted brand website will see highly personalized pages for a single brand.
When it comes to setting up an account, Shopify is the much easier tool to use. The newbie seller just needs to go through a series of pages that require some information about the brand, the owner, and then you can soon have fun with the design.
You can even just play around with the platform to get a feel for it. They literally have an option called “I’m just playing around.”
With Amazon, on the other hand, you have to prepare the following:
- A bank account number and a bank routing number
- A chargeable credit card
- Government-issued national ID
- Tax information
- Phone number
So when it comes to setting up shop, Shopify beats Amazon without a doubt. The former is generally just easier and faster to set up.
Amazon vs. Shopify: Pricing
These platforms aren’t free to use, and whatever they cost is going to be an addition to your needed capital.
When it comes to pricing plans, Shopify offers many more options to sellers compared to Amazon, which gives you only two.
Shopify is free to use for the first 14 days, and you don’t even need to provide your credit card information to get started. However, after the trial period, you will have to choose from their 5 available options.
Shopify Lite is for those who don’t want to run a Shopify online store but would like to use their cart features. This allows you to put a functional buy button and a system to process payments when you sell on your own blog or other websites. At $9 per month, this is a good way to start dipping your toes into ecommerce.
Shopify Basic, on the other hand, allows you to maintain a Shopify online store. You can design your whole website the way you see fit because Shopify also offers free and paid themes that you can customize for your brand.
If you’re ready to grow your business more, you can opt for the Shopify Plan. This name is a bit confusing since it’s basically the name of the platform, but this is their mid-priced plan, which offers you more staff accounts and access to professional reports.
The Advanced Shopify Plan, on the other hand, offers more features and a smaller percentage for the transaction fees. And if you really wanna go big, Shopify Plus is perfect for high-volume merchants.
Amazon gives two options to sellers: Individual and Professional.
If you’re selling not more than 40 units a month, then the Individual Plan is right for you. There are no monthly fees, but you do have to pay $0.99 for every item you sell plus a variable referral fee. These referral fees typically range from 10-15% of your final sale amount (with 15% being the overwhelmingly most common fee). On top of this you have to pay any shipping/Fulfillment By Amazon fees.
The Professional Plan, on the other hand, will cost you $39.99 per month. You will not have to pay a $0.99 closing fee like with an individual selling plan but you will still have to pay the variable closing fee and shipping/Fulfillment by Amazon fees.
Marketing and Traffic
In 2019, about 218 million people purchased something from a Shopify store. The platform is also responsible for providing around 2 million full-time jobs all over the world. However, in terms of getting traffic to your store, Shopify will not promote your store at all. That’s all on you to get the word out, whether it’s through paid ads like through Facebook and Google, SEO, or word-of-mouth.
When you list a product on Amazon, however, you will immediately get a ton of free traffic from Amazon. In addition to the free traffic though, most sellers spend a lot of money on paid advertising with Amazon.
This is why when you want to have a shot at gaining more customers early on, Amazon is the better choice. The platform is the go-to marketplace for almost everything—from toys to roughroading gear.
While you won’t be able to personalize your listings as much, you will have a better chance of gaining more customers if you do your Amazon product launch right even if you’re a first-time seller.
However, there should be a big asterisk to all this.
Although Amazon has more people coming to the site for their shopping needs, it’s also more saturated, and competition is very steep.
Customizability of Your Store
It’s a no-brainer to pick a winner for this category. Shopify allows you to represent your brand however you want to with their free and paid themes. They also have a lot of available extensions that you can add to your website to make the experience better for your customers.
Amazon also allows sellers to have a storefront for their brands similar to eBay stores, but they aren’t as personalized as Shopify.
Amazon, on the other hand, limits the things sellers can tweak in their site. This is why optimizing your listing is very important. You better pick the best pictures and the best words to describe your product to stand a chance in the very competitive market.
But to be fair to Amazon, they also have the Enhanced Brand Content (EBC), otherwise known as A+ Content Manager. This free feature allows sellers to differentiate their listings from other brands and convey brand value. Basically, it gives brands a chance to tell their story better to their customers.
However, not all sellers qualify for the Amazon EBC. You need to be registered in the Amazon Brand Registry and have a registered trademark.
When your sales go up you probably want to focus on more than just shipping packages. You will need the help of third-party logistics for this.
If you use Amazon to sell your product, then Amazon FBA (Fulfillment by Amazon) takes care of this for you. Uncle Jeff has multiple warehouses around the world to store sellers’ inventories and thousands of employees to send your products to customers that place an order on the platform.
This is very convenient for third-party sellers because all they need to do is ship their products from the factory to the warehouses and take care of business from their homes, in front of their computers.
Of course, this is not a free service. Sellers have to pay FBA fees and FBA storage fees to get this convenience.
Shopify, on the other hand, recently rolled out the Shopify Fulfillment Network. This isn’t as streamlined as Amazon FBA, but this is the platform’s first attempt to rival Amazon’s fulfillment services.
There is, however, an Amazon program that allows even non-Amazon sellers to use their warehouses and fulfillment services. This is the Amazon Multi-Channel Fulfillment. If you’re a Shopify store owner, you can use this service instead of the Shopify Fulfillment Network.
You can add applications such as Doubly to your Shopify store to enable currency conversion.
Having more payment options allows customers to more easily purchase your products and can have a positive effect on conversion rates.
Shopify has Shopify Payments that will excuse transaction fees. However, you can also use third-party providers. The platform allows you to choose from over 100 credit card payment providers as well as direct and external providers.
Amazon also has a variety of payment options. You can even shop using points, and the currency converter feature is also handy to market to buyers worldwide.
The last factor we want to look at is how much business owners have a say regarding their online stores.
If you’ve ever heard of Amazon seller accounts being suspended for unclear reasons, then you know the horrors that plague brand owners in Uncle Jeff’s lair. You might have the most superb product ever and the sales might be at its highest, but if you break any of their policies, they could shut down your listings without batting an eye. Some mistakes might even land you in jail.
Every Amazon seller knows the pressure of following the platform’s policies, which is why if you aren’t updated about Amazon’s new messaging policies yet, you better get reading.
Shopify, on the other hand, allows sellers to have autonomy. When you sell on Shopify, you’re not renting a spot on a marketplace. You own your site, and Shopify just provides the feature that makes the process seamless. From how their pages should look to the extensions they could add, brand owners are free to mix and match.
So if you don’t like the feeling of constantly walking on eggshells and being limited by too many company policies, Shopify is a good place to check out.
Choosing the right platform is one of the most critical decisions first-time ecommerce sellers have to make.
If you value brand presence more than anything else, Shopify is the clear choice. However, if you want a higher chance of getting more traffic early on, it’s best to start with Amazon.
Both platforms have their own strengths and weaknesses. The good news is that you don’t have to choose between the two forever. Over time, the wise thing to do is to use both to maximize revenue and create better brand awareness.
Which platform do you think is better for your business? Are you team Amazon or team Shopify?