If you’re thinking of starting your own e-commerce business or expanding your existing brick and mortar operations into the world of online retail, you have a few big decisions to make. One of these decisions is choosing the platform you’re going to use to run your business. There are dozens of different platforms, but most entrepreneurs end up choosing between Amazon and Shopify. Both of these offer some excellent benefits, so in this article, we will talk about the differences between Shopify and Amazon, their advantages and disadvantages, and give you tips for choosing the best option for your company.
Amazon and Shopify are two services people most commonly use to sell products online.
Both platforms make it very easy for sellers to sign up on the platform since they don’t require individuals to register their businesses before starting to sell products.
However, Amazon makes the process a little more challenging by asking potential sellers to submit a government-issued ID, valid credit card, and tax details before allowing them to create an account on the platform.
You don’t need to have any programming experience or other special skills to add products on these platforms. The user interface is generally very intuitive, and both services give you a list of information you need to enter for each product to list it.
Both Amazon and Shopify make it really affordable for sellers to get started on the platforms. For instance, Shopify gives each new seller a free 14-day trial and after that, charges them $29.99 monthly under the basic plan. You can upgrade to more advanced plans if you want.
At the same time, Amazon gives you two plan options. Under the Individual plan, you have to pay a fee for each product you sell, so you won’t need to pay anything if you don’t make any sales. Alternatively, you can opt for the Professional plan, which costs $39.99 per month.
Starting a business is always challenging, so both Amazon and Shopify provide a lot of informational resources, articles, tools, FAQ pages, and even dedicated support teams to answer seller questions.
One of the main differences between Shopify and Amazon is that the former is an e-commerce platform, and the latter is a marketplace. So when you sell on Amazon, you will have to compete with other sellers who have identical product listings. Most of the time, an Amazon product listing will have dozens, if not more, of sellers who all have the same product in stock. At the same time, the platform gives business owners limited tools to make them stand out from the competition.
On the other hand, on Shopify, you will have your own storefront with all of your products. This is very similar to creating a website from scratch to sell your stock. There will be no competition to distract customers from your brand, and you’ll have the chance to customize the way your storefront looks and its features.
One of the most significant advantages of Amazon is that by joining the platform, you instantly gain access to its 300 million active users, half of whom have Prime memberships. This means that if you sell a relatively unique product that’s in demand with customers, you likely won’t need to spend money on advertising.
On the other hand, if you go with Shopify, you will be responsible for driving traffic to your store, resulting in significant SEO and advertising expenses.
Since Amazon provides you with a huge customer base, the platform needs to find a way to make money from this model. This is where Amazon fees come in. When you sell on Amazon, you will be responsible for paying numerous fees for different actions you take on the platform. These fees can easily add up to over 30% of your total sales revenue.
Shopify fees are much lower, as you will only need to pay the price of a monthly subscription, payment processing fee, and the annual domain name registration cost.
In this section, we will take a detailed look at the advantages and disadvantages of selling your products on Shopify.
Shopify pros for sellers:
Shopify cons for sellers:
While Amazon has two seller plans which are pretty straightforward, Shopify plans are more complex. Essentially, sellers can choose from 3 options: the Basic plan, which costs $29 per month; the Shopify plan, which costs $79 per month; and the Advanced plan, which adds up to $299 per month.
The Basic Shopify plan allows you to create e-commerce websites and blogs, add an unlimited number of products to your store, use 2 staff accounts, utilize multichannel selling, fraud analysis, and contact Shopify support 24/7.
The Shopify plan includes everything available in the Basic plan, plus, it allows customers to purchase gift cards, sets lower credit bards fees for sellers, gives sellers access to 5 staff accounts instead of 2, allows them to create professional reports, and provides access to the point of sale extras.
Finally, the Advanced Shopify plan incudes 15 staff accounts, even lower credit card fees, advanced reports, and third-party shipping rates.
Now that we’ve discussed the advantages and drawbacks of Shopify, let’s look at the things sellers love and hate about Amazon:
Amazon pros for sellers:
Amazon cons for sellers:
All things considered, there’s no one correct answer to this question. It all depends on your business, priorities, and the amount of time and money you want to dedicate to it.
Amazon is generally a better option for people who source products from suppliers and then resell them at a profit. Since the platform most likely already has existing listings for your products, you will be able to start selling without spending a lot of time and money.
At the same time, if you create a unique product and want to keep your brand front and center, Shopify is a better option. People with dropshipping businesses also generally prefer Shopify over Amazon.
It’s also worth mentioning that Amazon has lower entry requirements, so it’s a better platform for beginners. If you don’t have any experience with online retail and want to try it out without investing a lot of capital, Amazon is a good option. That being said, even large corporations can benefit from having an Amazon presence, so it’s worth joining the platform even if your company is already successful.
As we’ve explained above, both Amazon and Shopify have a huge number of advantages for sellers. But, in the end, neither of the platforms is better or worse – they are just different. This is why we advise you to try both! In fact, this is a brilliant business decision since it will allow you to diversify your sales channels and reduce risks.
Sellers who use Amazon FBA and Shopify simultaneously can simplify their operations and minimize the amount of work they need to do by syncing their inventories on both websites and using Amazon FBA to ship their Shopify orders.
If you ultimately decide to start selling products on Amazon, you should consider hiring an agency to help manage and grow your business. Handling all Amazon operations in-house can be a huge pain, and it can easily prevent your business from realizing its full potential. At the same time, Nuoptima can help develop a robust Amazon strategy from your company, handle Amazon-related business matters, and guide your company to success. Schedule your free discovery call with one of our Amazon specialists today.