Launching an ecommerce business is one of the best decisions you can make if your goal is to gain financial stability. But with this great decision comes tough choices. And one of the first choices you’ll have to make is picking a platform to sell on. The success of your business largely depends on the e-commerce platform you use, so you must weigh your options well before making a decision.
Shopify and Amazon are two of the most prominent e-commerce platforms to sell on, hence the regular Shopify vs. Amazon comparison. You may have also narrowed down your options to these platforms. If you decide to sell on Amazon, you’ll be able to tap into the platform’s massive, already-engaged audience without having to do much small-business marketing yourself. In contrast, with Shopify, you’ll have to drive traffic to your own online store and manage your ecommerce business yourself.
Choosing between these eCommerce platforms may seem easy on paper, but it isn’t. There’s a lot to consider, and that’s why we have come up with this Shopify vs. Amazon guide. When it comes down to it, Shopify vs. Amazon, which should you choose? We’ll put both platforms to the test and examine their differences so you can pick the best one for you.
Let’s get right into it!
Overview of Shopify
Shopify is a cloud-based online platform that allows online business owners to launch, manage, and grow independent digital storefronts. The platform serves as an eCommerce platform and doubles as an online store builder. A Shopify store works like a standalone eCommerce website, allowing sellers to display their products exclusively. So, customers who visit a brand’s Shopify store will only see products from that brand unless they visit another online store.
The platform also offers a unique point-of-sale app called the Shopify POS. With this feature, online sellers can merge their online and physical stores and manage them from one account.
Shopify offers over 70 customizable website templates for online business owners to choose from. Sellers can also use the seamless Shopify payments system to accept payments at the speed of light. Shopify offers all the structure you need to launch an eCommerce store without competition from other online sellers. But, the platform does not offer fulfillment services, so you will have to bear all shipping responsibilities.
Overview of Amazon
Amazon is the largest online marketplace in the world. If you want to sell online without setting up an e-commerce store from scratch, AMZN is the place for you. Unlike Shopify, Amazon is a large marketplace that hosts millions of online stores. So, if you decide to sell there, you’ll have to compete with other sellers.
Furthermore, AMZN not only allows you to launch your own online store but also provides two fulfillment options to help you manage orders. You can sign up for either Fulfillment by Merchant (FBM) or Fulfillment by Amazon (FBA). With FBM, you will be fully responsible for your business processes. In contrast, FBA allows you to outsource storage, shipping, and customer service to AMZN.
There are many processes involved in selling on AMZN; product research, keyword research, listing optimization, and more. And because of the complexities of these processes, it may take a while for new entrepreneurs to get the hang of the marketplace. But once you learn the ropes, it’s easy to scale your business.
One thing to note, however, is that Amazon sellers are subject to the platform’s rules and must strive to follow laid-down regulations. Plus, there are tons of restrictions, and new sellers sometimes get lost in the maze of dos and don’ts.
It is evident that Shopify and Amazon are very different platforms, and each comes with its own pros and cons. Pricing is also a major difference between these e-Commerce platforms. So, it is almost impossible to do a Shopify vs. Amazon comparison without talking about pricing. We’ll talk about Shopify vs. Amazon pricing in the next section before delving into the real comparison to help you weigh your options.
Shopify vs Amazon: Pricing
Shopify has five different plans, each with different monthly rates, features, and payment or shipping discounts. The plans are as follows:
- A basic plan for new sellers who have few, occasional physical sales. The basic plan costs $29 per month.
- The Shopify plan costs $79/month and is best for small businesses that have a good balance of online and in-person sales.
- An advanced plan for established businesses that want access to an advanced reporting feature. This plan costs $299/month.
- Shopify Plus is a customized pricing plan for established brands or businesses who want access to more features.
- Shopify lite which costs $9/month and allows sellers to upload products to any website or accept credit card Shopify payments.
These plans offer different benefits but they also have a lot of features in common. For instance, you get access to:
- An independent eCommerce store
- Unlimited products
- 24/7 customer support
- Marketplace and social media channel integration
- Manual order creation and discount codes
- Free SSL certificate
- Abandoned cart recovery
Shopify offers a 14-day free trial for sellers who want to get a feel of the platform before going all in. Afterward, you’ll have to sign up for a paid plan to continue using Shopify.
Selling on AMZN is free for the most part, but there are some selling fees you’ll have to pay as you go along. First, you’ll have to choose a selling plan and pay the fees.
There are two plans available: the individual plan and the professional plan. The individual plan is best for sellers who intend to sell fewer than 40 products per month, and the selling fees follow a per-sale approach. Sellers who opt for the individual plan will have to pay about $0.99 on every sale.
In contrast, the professional plan allows you to sell more than 40 products per month and follows a fixed monthly payment approach. So, professional sellers will have to pay a flat rate fee of about $39.99 monthly.
In addition to selling fees, AMZN charges a referral fee on every sale. The fee ranges from about 8% – 45% depending on the product category. Apart from the selling plan and referral fees, most of the other fees only apply to sellers who opt for FBA.
Now that you know the costs of selling on each platform, let’s get into the Shopify vs Amazon comparison. What are the pros and cons of selling on either of these platforms?
Pros and Cons of Selling on Shopify
- Detailed Report Feature
The platform offers a wide range of analytics and reporting features to help you track the performance of your online store. Using the report feature, you can see the number of orders and which product pages are converting.
- Unique Brand Identity
Since Shopify allows you to launch independent storefronts, you won’t have to beat an algorithm or struggle to make sales. All you have to do is to direct traffic to your online store. Shopify stores work best for sellers who want to build a brand on their terms.
- Easy to Use
The website’s interface is easy to navigate, especially for sellers who are new to the eCommerce world. The platform is perfect for sellers who lack technical expertise since they will not have to worry about technical procedures. The storefronts can also be easily customized using drag-and-drop boxes.
- Multiple Templates to Choose From
The platform offers multiple aesthetically pleasing templates for sellers to choose from.
- Rigid Business Structure
When you create a Shopify store, you’re creating a business rather than a passive income stream. And launching a business isn’t always straightforward. So, it takes months of trial and error to figure out how to utilize Shopify and create a profitable business. Plus, it can take some time to get used to the features of your online store.
- Scaling a Shopify Business May Be Difficult
Since your Shopify storefront runs independently, the growth of your business ultimately depends on you. Shopify does not provide an engaged audience that guarantees sales, so you will have to channel most of your effort into marketing. You may also need to learn how to run social media ads and use SEO for your business.
- Stressful Business Procedures
Like every other eCommerce platform, selling on Shopify will require you to pick, pack, and ship orders. You’ll also have to provide excellent customer service. Handling all these processes can be exhausting, but Shopify does not have structures in place to help sellers automate or outsource these tasks. You will be fully responsible for them.
Pros and Cons of Selling on Amazon
- A Vast Customer Base
AMZN has over 300 million active customers, and these people shop for anything you can think of. So no matter what you decide to sell, you can be sure you have AMZN’s reputation to piggyback off of. Plus, 89% of online shoppers are more likely to shop on AMZN than on other marketplaces. So you’re more likely to make sales on Amazon than on other marketplaces.
- Ease of Expansion
AMZN operates 16 marketplaces, making it easier for sellers to expand their businesses. In other words, you could be based in the US and still list your products in the Canadian marketplace. There’s no better way to expand your reach and increase your income!
- Cost-effective Marketing
AMZN already has massive traffic, and you have unrestricted access to it. Depending on your niche and how in-demand your products are, you can begin selling immediately without considerable marketing effort. Also, the website functions as its own search engine, so customers looking for your products will have no trouble finding you.
Moreover, making sales on AMZN depends on how well-optimized your listings are. And there are effective listing optimization tools to help you create optimized listings. In addition to well-optimized listings, you can run ads to improve your visibility even if you’re on a budget.
- Flexible Fulfillment Options
AMZN has over 175 fulfillment centers or warehouses across the globe. If you sign up for Amazon FBA, you can store your products in these warehouses and have them shipped on your behalf. In addition to storing and shipping orders, AMZN will also provide excellent customer service and process returns for you.
Shopify leaves the entire fulfillment process to you, but AMZN offers you the option of outsourcing through FBA. So, Amazon FBA vs. Shopify? You choose.
- Stiff Competition
There are over 2.5 million sellers on AMZN, and a regular Amazon store puts you up against other sellers. So, you will have to develop strategies to beat the competition. Thankfully, AMZN offers an Amazon storefront feature that works like Shopify. The feature allows you to display your products at a glance. You can step away from the competition and leverage the traffic if you create a storefront.
- Too Many Restrictions
Selling on AMZN is straightforward, but the platform has many restrictions. And if you want to sell on AMZN successfully, you must adhere to these restrictions. Also, some product categories are restricted, and you must get approval if you want to sell in those categories. If you sell through FBA, you’ll also have to follow packing and prepping guidelines, or you’ll risk incurring more costs.
Shopify vs Amazon: What’s the Difference?
An important distinction to keep in mind is that Shopify is a specialized eCommerce platform, whereas Amazon is an online marketplace. Shopify doubles as a store builder that gives you the tools to create your store, while AMZN lets you sell alongside other sellers on its platform.
Selling on AMZN is like owning a stall at a busy trade fair. Thousands of people pour in to explore and buy, and most of them are not familiar with your business. But you still make a lot of sales because everyone passing by notices your “stand.” In contrast, selling on Shopify is like renting a space for your store.
So, there’s more freedom to create a distinct image, but it’s more difficult to establish a loyal customer base. Both platforms are suitable for different kinds of businesses, making it harder to settle for one.
But, there’s a lot to consider when deciding which platform to sell on. Of course, your business goals and budget are important, but there are several other things you may overlook. We’ll discuss a few of them in the next section.
Related: Selling on Amazon vs eBay
Amazon FBA vs Shopify: How to Choose A Marketplace
Now that you’re aware of the pros and cons of selling on either of these platforms, you’re several steps closer to making an informed decision. It is obvious that FBA offers much more flexibility and structure. But there’s more to think of when choosing an e-commerce platform. Here are a few things to consider.
Customer Base and Revenue
In 2021, Shopify processed orders worth $79.5 billion. When compared to AMZN’s total revenue of $82.3 billion in the fourth quarter, the difference is huge. Amazon also has more monthly visitors, about 197 million vs. 56.5 million for Shopify. Without a doubt, AMZN has a larger customer base and revenue potential.
Nothing discourages buyers from bad, unresponsive websites or designs. With Shopify, you won’t have to worry about losing customers at any stage of your funnel. There are tons of customizable designs to help you develop a unique brand outlook.
In contrast, AMZN does not offer customizable templates, so you’ll have to make do with the regular website design. But, if you create a storefront, you can customize your store’s design.
Amazon has more website traffic, but to attract customers’ attention, you’ll have to go the extra mile. On the other hand, Shopify will require you to drive external traffic to your store. People come to AMZN on their own, so all you have to do is get them to notice you instead of your competitors.
No one wants to spend 24 hours weekly running through tons of monotonous tasks. If you launch a Shopify or Amazon store, you most likely have to do this. But the good thing is that AMZN is willing to take on some heavy lifting so you can focus on other things. In contrast, Shopify leaves you to it, and your business growth is entirely dependent on you.
You can automate some of your business processes using AMZ software. This makes it easier to build a passive income source. Read to the end to learn all about the best Amazon software and how it can help you scale your AMZ business.
Best Amazon Software for FBA Sellers
AMZ Software is the perfect tool for sellers who want to build a fully passive business. Software options are available on the market, so it may be difficult to choose one. But here’s one that we can recommend: ZonBase.
ZonBase is the best Amazon software for anyone who wants to automate their business processes to enable them to earn a passive income on AMZN. The software offers 14 tools for business automation. These tools cut across product research, keyword research, listing optimization, and many more.
With ZonBase product research tools, you can find the best-selling products in your niche. Its keyword research tools will help you generate relevant keywords for your store to expand your reach. Lastly, its listing tools will help you create well-optimized listings to improve conversions and boost your sales. But that’s not all.
In addition to product research, keyword research, and listing optimization tools, ZonBase also offers sales estimation and analytics tools. You can also outsource your listing optimization and PPC automation to a team of experts for a fee.
Conclusion: Amazon FBA vs Shopify
When choosing a platform, you should consider how far you’re willing to go when it comes to driving traffic to your store. If you’re not ready to go all out on external marketing, then AMZN is your best bet. Also, create a budget and factor in the fees that you’ll have to pay on either platform. Then, choose the option that works best for you.
With budget and traffic out of the way, the next thing is to check your schedule. Are you willing to commit time to growing a business? Or would you rather automate or outsource your business processes? If the latter sounds like a better option, then Amazon would be a perfect fit for you.
On the whole, selling online is a great way to gain financial stability. If you have struggled with the Shopify vs Amazon dilemma and you read to this point, you should be able to make an informed decision now. Utilizing the tips in this post will help you weigh your options well and make the best choice.