With eCommerce revenue expected to hit $4.5 trillion this year, it’s no surprise more and more people are turning to eCommerce as a way to make money online.
Ecommerce retail sales are expected to grow by a further 17.5%, with a 15% year on year growth rate.
Shopify is known for its all-in-one solution to building an online store while Amazon is possibly the world’s largest online marketplace.
So which option is better for those interested in online retail? Amazon or Shopify?
We’ll take a close look at the features of both eCommerce giants, how they work, the pros and cons of each platform, pricing, and which is best suited for which kind of business.
Let’s get started!.
What’s the Difference Between Shopify and Amazon?
If you’re new to eCommerce, you’ve probably heard of both platforms. Chances are you may have even bought items from Amazon or an online store hosted on Shopify (yes even those that sell T-shirts).
Both platforms allow a customer to find, order, and pay for a product and have it delivered to them, so how are they different? The biggest difference lies in how they both operate and their features.
How Amazon Works
First of all, Amazon which is the older of the two is an online marketplace. A market place has vendors selling all kinds of goods plus a steady stream of buyers who shop there regularly. This is the same principle for Amazon, the difference is, it is online.
Hence, a quick visit to Amazon’s site instantly greets you with lots of different items being sold in just about every category under the sun. So it’s not surprising most shoppers check out Amazon first when they are looking for something online.
Just like any marketplace, Amazon doesn’t necessarily make and sell its own items to populate its marketplace. It does have its own products like the Echo and Fire TV stick but a good number of items sold on Amazon are by third-party vendors.
It’s like renting a stand at a fair. Amazon is the host, and sellers pay for stands or in this case pay per sale generated on the site in addition to other fees. Amazon also offers its popular Amazon FBA program to help sellers take advantage of its massive shipping infrastructure.
For any online seller, shipping and returns form a major part of running your business. Amazon offers to save you that headache by holding your goods in their warehouses and shipping them to your customers on your behalf as well as dealing with any returns at a fee.
The FBA (Fulfilled By Amazon) service is available to both vendors who sell both on their platform or on their own eCommerce site.
How Shopify Works
Shopify on the other hand is not a marketplace. Shopify is simply an out-of-the-box eCommerce store builder. It’s a SaaS solution that allows you to create, manage, and run your own online store complete with your inventory of choice.
All you need to do is connect your Shopify store to a domain you have purchased and that’s it. If you don’t own a domain Shopify can help you purchase a domain that it will host for you. You’ll pay a monthly fee depending on the features you choose to run your store with.
Apart from Shopify’s native features, it also offers integrations with lots of third-party apps and services that cover nearly every aspect of running your store. This includes taxes, shipping and order fulfillment, inventory management, and more.
You even have access to marketplaces like Oberlo designed specifically for those looking to start a dropshipping store via apps and extension.
Shopify is like renting an empty space to create and build a shop from scratch. It may take more work upfront, but once you have a solid customer base, it’s worth it.
Amazon is a marketplace and Shopify is an online store builder. But what else makes these two different from each other?
Amazon has native solutions for just about everything related to using its platform whether it is publishing ebooks (Kindle), or a custom payment gateway (Amazon Pay). It provides everything you need to sell including potential buyers, as long as you’re selling within their marketplace.
Shopify conversely, gives you a finished store and all the functionality you need to make the store run plus even a domain name where needed. You just have to find the buyers yourself which in itself can be demanding.
Pros and Cons of Selling on Shopify
Shopify supports a staggering 800,000 eCommerce sites and counting. It has opened up the world of eCommerce and online retail to complete beginners thanks to its easy to use WYSIWYG builder platform. You can have a store up and running in as little as 15 minutes.
Before Shopify, anyone who wanted to open an online store had their work cut out for them. First, there is web hosting cost, then there is hiring a developer to build a responsive eCommerce site from scratch which is expensive.
Apart from that, you’ll also have to deal with maintenance costs and payment gateway integrations. And all that is in addition to figuring out how to drive traffic to your store and convert them into actual buying customers.
Today, Shopify saves you from most of that stress, by providing a simple, user-friendly interface to design, manage and even automate your online store. So for anyone who is new to eCommerce, Shopify makes getting started easy without needing to know code.
Does that mean Shopify is the best platform for you? Take a look at the pros and cons below.
Pros of Using Shopify
1. Beginner Friendliness
Shopify lets you build your store using its simple What-You-See-Is-What-You-Get editor. Any change you make to your website will reflect in real-time. Thus for new store owners, you can create your store in a matter of a few clicks.
Shopify’s dashboard on the back-end is also clutter-free and easy to navigate. You’ll be able to tell at a glance how your store’s performing, inventory, sales, and much more.
2. Better Options for Customization and Branding
Apart from allowing you to build your store easily, Shopify also offers lots of themes from which you can choose and customize your store’s design to suit your brand. You can pick brand colors and even themes that are niche-specific.
For developers, you can also edit your store using CSS/HTML in a secure environment so you can further customize your store’s look and functionality.
3. Multiple Payment Gateway Integrations
Payment gateways form a big part of eCommerce. Having trusted payments gateways boosts your store’s conversion rates and also makes it easy to process chargebacks and refunds.
Shopify has its own native Shopify payments as an option, which charges lower fees compared to third-party payment processors.
If Shopify payments are not available in your region, you can choose from among 100+ other third-party payment gateway providers that serve different parts of the globe including PayPal, Stripe, Apple Pay, and many more.
In line with multiple payment gateway options, Shopify also lets you sell in multiple currencies and has apps that let your customers check out in a currency of their choice. This is ideal for better conversion rates.
4. Built-In Blog
Content marketing is the best long-term strategy for getting repeat customers and consistent traffic to your site. This is where starting a blog comes in. If you’re looking for your website to get traffic organically from search engines, having a blog is a key factor in ranking highly.
Shopify offers you a strong suite of built-in SEO features to help your site get noticed by search engines. The blog feature is also fairly straightforward and easy to use, allowing you to even schedule blog posts beforehand.
5. Responsive Customer Service
Shopify’s main customers are store owners. Hence it has an entire dedicated team of staff on hand to help you via phone, email, or chat should you run into any issues with your store.
This is especially handy when you run into problems in the middle of a big marketing campaign.
6. Multilingual support
For store owners who are looking to sell internationally, multilingual support is necessary especially for customers in regions that have multiple languages like the EU.
Shopify allows you to translate your site into 5 or up to 20 languages based on the subscription plan you are on.
All you have to do is simply add a language folder to your domain after enabling multi-language selling. So you’ll end up with www.myshop.com/fr/, www.myshop.com/de/ to name a few.
7. More Merchandise Flexibility
Shopify allows you to sell physical and digital goods as well as services from your online store.
Thus as long as your products/services don’t fall within Shopify’s Prohibited items list, you can sell just about anything. You can even schedule appointments and book clients right from your store.
8. Marketing Tools and Solutions
The creators of Shopify know that store owners will have to drive sales themselves. Hence there are lots of built-in marketing apps.
From email marketing integrations to Google Analytics, you can track your ad campaigns from within your Shopify dashboard.
You also get automated abandoned cart recovery emails to help you close any sales you may have lost on your site.
9. Omnichannel Sales
Shopify supports multichannel sales allowing you to sell on Facebook, Instagram, eBay and even Amazon. Hence you can sell using whichever platforms seem to work better for your business.
Cons of Using Shopify
Shopify allows you to quickly create and build a professional-looking eCommerce site even with zero coding experience. But there are some downsides to using the platform.
1. May Quickly Become Expensive
Shopify has lower-priced plans suited for those on a budget. But if you intend to really grow and scale your store, you’ll end up paying more for its Shopify Plus or Enterprise Plan.
Apart from your subscription, you’ll also have to pay for premium apps and plugins to use with your store. Next are the card processing fees depending on which payment gateway you use. All these fees add up to the overall cost of running your store.
Shopify Payments are the cheapest option but if it’s not accessible in your region, you may be stuck with other vendors and pay a little more on top of Shopify’s own transaction fees.
2. Needs More Marketing
Just like how opening a new store doesn’t mean you’ll make sales unless you advertise, you’ll need to spread the word about your new store yourself.
With Shopify, you’re entirely responsible for the whole sales and marketing process. From driving traffic to your eCommerce store up to converting abandoned carts into sales, it’s all your responsibility.
Thus you’ll need to learn a lot about marketing your store online via free options or running paid ad campaigns on Google or social media.
3. Shipping Fulfillment Is Your Responsibility
Shopify may help you give your customers good shipping rates, but it’s still up to you to make sure the order gets to the customer.
That also means you’ll have to handle inventory and warehousing as well. If anything goes wrong with the shipping process, you’ll have to fix it.
4. Support for Your Customers Is On You
Unless you have a large team, you’ll also have to handle any customer complaints, inquiries returns, and exchanges anything customer-related. Just like how customers can shop around the clock, don’t be surprised if you get complaints at odd hours.
You have the option of using chatbots and other similar services to ease this burden, but other than that, a lot of this will be part of your workload.
Pros and Cons of Selling on Amazon FBA
The biggest selling point of Amazon’s FBA feature is not having to worry about shipping. That plus the marketplace’s 2.5 billion monthly visitors makes Amazon an appealing option to eCommerce entrepreneurs.
All you have to do is make sure your inventory is in Amazon’s warehouse and that’s it. Much as this sounds simple in theory, it is not without its drawbacks.
Pros of Using Amazon
1. Ready Buyers and Fast Profits
Amazon gets over 2.5 billion shoppers on its site every month. For most vendors, that is traffic they may not see in the first few years on their eCommerce site.
Thus if you’re looking for a market that’s ready to buy plus relatively quick profits, Amazon is the place to be.
In fact, not only do you benefit from all that free traffic, but Amazon may also promote your merchandise via some of its native promotion features like the Buy Box. This is one of the most coveted sales tools Amazon awards to vendor listings on a basis that is still unclear.
But the Buy box allows shoppers to purchase your products right away, giving you more conversions and sales.
2. Complete Hands-Off Fulfillment Solution
Another very impressive feature is their order fulfillment process which runs like a well-oiled machine. Amazon built its reputation by reliably offering fast one and two-day shipping via Amazon prime.
Now it makes this same service available to vendors across the globe for a fee. No more worrying about how to get items to your customers fast.
As long as it’s in Amazon’s warehouse, your customer will enjoy speedy shipping via the FBA service.
3. Built-In Customer Care
Amazon is a very customer-centered company and thus have one of the most responsive customer support teams on hand to deal with any customer complaints or enquiries on your behalf.
Given that customer can be pretty time consuming, that’s one more weight lifted off your shoulder, thanks to Amazon.
4. Offer Prime Shipping
Amazon allows you to offer Prime shipping to your customers via its FBA program. Once you’re a vendor on Amazon (or off Amazon) signed up to their FBA program, you can use their order fulfillment services on any eCommerce platform that is compatible.
Thus your customers can enjoy fast and reliable one or two day shipping like they would if they had bought directly on Amazon.
5. Earn Trust Easily
Amazon has built its reputation around being honest and allowing customers to see what they are buying and what others are saying about it.
This trust in Amazon’s brand and how it regulates reviews is what would convince window shoppers to choose your product.
Thanks to its well-planned system that allows customers to ask questions about products and share reviews, your product is more likely to be bought because others liked it or had positive things to say about it.
6. Simpler Returns
Amazon not only allows you to benefit from its well structured shipping system, but you also benefit from its returns handling. Shoppers on Amazon spend more simply because they can easily return the product if they don’t like it.
For merchants that means you no longer have to worry about handling those returns requests directly. Amazon will take care of it for you.
7. Easy Set – Up Process
Building a website from scratch is not easy. Even with a simple drag-and-drop builder, there will still be many moving parts to making sure each part of your eCommerce store or site functions properly.
Some of which include choosing a responsive theme, web copy for each of your web pages aside from your product descriptions, landing pages and others. Amazon cuts out this entire process because it has already built the site.
All you have to do as a seller is simply create a seller account, upload photos of your goods and add product descriptions and that’s about it. No need to worry about site design, copy, pages or aesthetics as Amazon has that handled already.
Cons of using Amazon
Amazon is a behemoth of a company and offers high-standard services to its vendors. But someone who is completely new to eCommerce, the same things that make it appealing could also be drawbacks.
1. Fees Add Up Fast
The Fulfilled By Amazon service has many small charges that include a fee per product sale, storage, shipping and also returns. These fees add up pretty quickly and may reduce your margins on whatever you’re selling.
The fact that the fees are based on product dimensions and weight also mean those fees aren’t fixed. This means you can’t accurately estimate your fees month in, month out if you have lots of variations. Plus it costs more to use the FBA service on any other eCommerce platforms.
The longer your stock stays without being sold, the heavier your bill becomes.
2. Difficult to Track Inventory
To benefit from Amazon FBA, you’ll need to ship your products to their warehouse. In effect, you’ll not be directly in control of monitoring your stock levels. This becomes more complex if you have multiple product offerings.
Also, new merchants may find Amazon’s inventory naming which includes ASIN and UPC (universal product codes) confusing.
3. Intense Competition
Amazon’s large buyer market is because it has millions of options for shoppers. This is great for shoppers but not so much for vendors because your product will be displayed side by side with a competing product in the same niche.
Thus if your products are new or haven’t pushed up the best-selling ranks, you’ll have to struggle for visibility.
4. Not Ideal for Building A Customer Base
Amazon is not the place if you’re looking to build a large brand following simply because it treats products listed there as commodities. It may be good if you already have an existing following that you can simply redirect there.
But if you’re looking to truly build a base of consistent repeat customers, Amazon doesn’t support that.
5. More Returns
Prime and One-day shipping may be a blessing to customers and even businesses however, that equally implies easier returns. You may not have to handle these returns yourself, but your bottom line and online reviews will suffer for returns.
Again you would have already paid Amazon their fees on the sale plus delivery and possibly even its storage. So that’s a double loss.
Ecommerce Tools and Features
The basic functions of any eCommerce platform include allowing customers to view products, add them to a shopping cart and pay for them to be shipped.
For the store owner, it means being able to view product stock and inventory levels, while integrating shipping costs too.
In this regard, both Amazon and Shopify cover everything you need for basic eCommerce functions. But which features really set each platform apart?
By default, Shopify will offer you more eCommerce features and functionality than Amazon simply because you are building your store completely from scratch. Nothing is done for you. Intimidating as it sounds, it’s not that hard to create a storefront in Shopify.
Even a complete newbie can be done in a matter of a few clicks within minutes.
1. Unlimited Products
The beauty of creating a Shopify store is that you can sell almost everything (as long as it’s not on their prohibited items list). There’s no limit to how many products you can sell in your store and how many listings you can create.
Apart from product listings, you can also create variations for your products, meaning if they are available in different sizes or colors, then you can add those without having to pay more or even be on the highest plan.
For service-based businesses, you have even greater room to schedule appointments and book more clients. Just add an app from Shopify’s well-populated App marketplace to enable clients schedule a call/appointment and you’ll be good to go.
2. Multiple Payment Options
To take full advantage of eCommerce and appeal to a wider market, your site should allow shoppers to pay in a way that is convenient for them.
Shopify gives you the option to either use their native payment gateway solution, Shopify payments or choose from 100+ third party payment gateways. This includes major platforms like Paypal, Stripe, Apple Pay and others.
Their native payment solution is also comparatively cheaper card processing fees too, compared to other payment processors. Again, if your customers span across multiple locations, they can still pay in their local currency, thanks to Shopify’s multi-currency support.
3. Third-Party Integrations and App Support
There are different aspects to running and managing your store. This includes but is not limited to apps for email marketing like MailChimp, tax automation, shipping rate calculators, discount and gift cards, dropshipping integration, and many more.
4 . Omnichannel selling
Another key feature Shopify offers is the ability to sell on different channels, including Facebook, Instagram, Walmart Marketplace and Ebay.
You can link your store directly to Facebook Messenger and share products links from right within the app. Also you can run and manage your Facebook ad campaigns right from within Shopify.
The Facebook and Instagram option lets you add shoppable product links to your stories and posts. Thus customers can browse and buy products without having to leave the Instagram app.
Even more impressive, is the fact that you can integrate Amazon with your Shopify store. You can sync your Amazon product listings to your Shopify store and display your products listed on Amazon within your store while still keeping them on Amazon.
You can even integrate Amazon’s fast One-Day and Two-Day shipping options in your Shopify store. This is a great way to ease your order fulfillment burden while keeping your customers happy.
5. Buy Button
Assuming you’re not selling only on your eCommerce site, Shopify gives you the option to add a “Buy Button” to any other eCommerce site or blog letting you create a shoppable link. The Buy button will integrate the shopping cart functionality on any site you add it to.
This makes it ideal especially if you have multiple websites or are sharing your product link anywhere on the web.
6. POS Functionality
For businesses that do a lot of in-person sales, the Shopify POS function allows you to collect and record sales that are made in person. This is helpful for brick and mortar businesses that are looking to sync their online presence with their offline business.
You can track in-store sales from multiple store locations because of unified reporting in your Shopify backend as well as generate purchase orders.
7. Staff Accounts
Once your online business starts growing, you’ll have to delegate more and more tasks. In line with that, Shopify allows you to create up to 15 staff accounts depending on your subscription plan.
As the main admin, you can assign multiple roles to these accounts, grant and restrict access as well as supervise staff activity from a single and easy to understand interface.
8. Free Business Toolkit
Apart from all the main eCommerce features that Shopify offers, it also puts at your disposal, its free business tool kit. You’ll have access to free tools that will help you get your business up and running faster.
This includes tools like a logo, pay stub, Terms and Conditions and even Slogan generator. These are things which you would have otherwise paid someone or used a paid app to create.
Amazon allows almost everyone to sell just about anything including handmade goods, home services and digital products. Its high volumes of shoppers means it provides sellers with the basic framework to get their products seen and sold.
1. Built-In Advertising and Marketing
A major reason vendors and merchants lean towards Amazon is because your products will be visible to buyers almost right away.
Thanks to its large volumes of traffic month after month, selling on Amazon exposes your products to ready buyers who are looking to buy now.
For a new merchant, those first few sales can be both motivating and life-saving as they’ll keep your business going. Apart from putting your products in front of millions of eyeballs, you also have the option to create a sponsored listing.
This is Amazon’s version of Facebook’s sponsored posts or Instagram ads. This will give your product more visibility over competing products and eventually convert into more sales.
Amazon also has its own SEO algorithm which with a little tweaking can work to show your products to more customers.
2. Multiple Shipping and Returns Solutions
Another big selling point for Amazon is its One-Day and Two-Day shipping options which is one of the main reasons why shoppers love the platform. It makes these services available to vendors and third-party sellers via its FBA program.
This simply means Amazon will handle order fulfillment once an order is placed on a listing you created on the platform, whether it’s via your Shopify store or directly on Amazon. This means Amazon will get your product to your customer on your behalf.
Likewise, if the customer has an issue with the delivery, they can easily and quickly return the product for a refund, a process Amazon will handle for you too. It’s no wonder Amazon FBA is one of the most popular fulfillment methods among vendors.
Sellers also have the option to fulfill orders themselves (Fulfilled By Merchant or FBM) or can use a combination of both fulfillment methods to serve their customers. Both FBA and FBM have their advantages.
Fulfilling orders yourself gives you more control, flexibility and better tracking of inventory while Amazon’s FBA is simply a complete hands-off order fulfillment option.
3. Customer Support Integration
For a new business owner, juggling inventory management, marketing, orders and customer care can be a handful. Because customers who buy your product on Amazon are actually buying from Amazon, Amazon handles your customer care for you.
This especially includes returns, complaints and some enquiries. This will save you loads of time and staff costs which you can redirect into running other parts of your business.
Amazon has arguably one of the largest networks of warehouses across the US which is what makes its express shipping so efficient. By finding the nearest warehouse to where the customer is, they can ship products faster and more efficiently to customers while cutting costs.
Likewise, if a large number of your buyers are US based, all you have to do is get your merchandise to Amazon’s warehouse and they will handle the distribution. This is especially useful for sellers outside the US who are targeting US-based customers.
Amazon charges a fee for renting storage and a separate fee if your goods stay over 365-day in their warehouses. Thus it’s worth making sure that your goods are fast-moving goods.
5. Customer Reviews
Social proof counts a lot when it comes to selling online. Since people can’t see and try what exactly they are buying, many shoppers count on online reviews to make buying decisions.
Thanks to Amazon’s aggregated marketplace and large number of buyers, shoppers can make an informed decision as to which product to go with.
Shoppers trust these reviews because they know that a lot of people buy from the platform and so they believe these reviews are genuine.
For sellers, this means if your product is good and delivers value, you can count on shoppers leaving great reviews which will get you more sales.
Getting the same amount of social proof on your own website or social media page would have required a lot of work, but Amazon makes it easy.
Winner: It’s A Tie
Both Shopify and Amazon offer a suite of powerful features that work perfectly for the right business model.
Shopify’s strongest selling points here include the fact that you are not limited to one sales channel and have complete design flexibility and customization.
Amazon on the other hand wins because everything is technically done-for-you. All you need to do is simply create an account and add your listing and you’re good to go.
Attracting Customers and Demand Generation
It is one thing to set-up an online store but it’s a totally different thing to get your products (and store) in front of people who are ready to buy. The online space is full of distractions and ads from competitors all vying for your potential buyer’s attention.
Your eCommerce platform choice may help your brand and product standout or not depending on which one you choose.
In this case, Shopify and Amazon work differently, you’ll need to apply two different strategies to get the most results in each situation.
Amazon Customer and Lead Generation
One of the most tempting benefits of choosing a marketplace like Amazon is free traffic. Amazon boasts of over 150 million unique monthly visitors from the US alone.
Combined desktop and mobile visits to Amazon.com from May 2019 to September 2020.
In September 2020 alone, Amazon had almost 2.8 billion visits from both desktop and mobile visits and that was not even around Black Friday. All these visitors are most likely shoppers doing product research or buyers looking to get items.
Amazon gets a lot of traffic because it offers a wide variety of products in any given category allowing shoppers to find something no matter what their budget is. The Buy Box feature is also Amazon’s way of helping vendors convert leads to sales.
However all that traffic may not be as productive for new and small sellers on Amazon. Why? Because your products will most likely be displayed alongside your competitor’s products. Hence you’ll both be competing for the same buyers.
Given how wide Amazon’s offerings are this may mean your products don’t get little to no visibility at all especially as a new entrant.
Thus if you’re a small scale seller with a product in a fiercely competitive niche, Amazon may actually end up being a counterproductive choice. Amazon has its own SEO ranking algorithm and keyword lists which can take some learning to master as well.
You also have the option to pay for your listing to be shown to more visitors within the platform as a sponsored ad, just like Google or Facebook ads. Thus, you may have to potentially spend more time and money just optimizing your listing for better visibility.
Shopify for Customer and Lead Generation
To be fair, using Shopify would require a similar effort to get your eCommerce store more organic traffic from Google and other search engines.
You’ll still need to optimize product descriptions and possibly create keyword-rich blog posts to keep organic traffic coming.
The difference is that you can build a repeat-customer base with your Shopify traffic compared to Amazon’s traffic. When a customer buys from Amazon, Amazon controls the emailing and communication on your behalf, hence that customer is theirs technically.
With your Shopify store, you’ll be doing the emailing to maintain your customer list. But that list will keep providing you repeat buyers for a very long-time.
The good news is, Shopify’s app market offers lots of options for marketing, emailing, SEO, abandoned cart recovery and social media apps to help you grow a strong brand presence.
Pricing Structures: Amazon Fees vs Shopify Fees
Every business has overhead costs as part of its operation. A physical store would have come with rent, licensing, permits, warehouses and more. Likewise your online store will come with monthly ongoing costs to stay open.
Knowing these monthly costs will help you better calculate your profit margins and price your products or services right to stay profitable. That said both Amazon and Shopify offer budget pricing options for people who are just starting out with eCommerce.
Amazon offers two selling plans with unique features, each meant for a different kind of business owner. The fees vary based on which category you sell in and which fulfillment option you choose.
If you’re just starting out and don’t move a lot of products yet, the Individual Selling plan is ideal. It comes with zero monthly fees but rather a fixed fee of $0.99 per item you sell. This fee will be on top of other fees like additional selling which differ based on category.
Again the individual selling plan limits you to about 40 products per month. So for vendors looking to grow their sales in the long-term, the individual selling plan will only limit you. If your products are however unique handcrafted items, this plan is a good way to get started.
The individual plan doesn’t give you access to some of Amazon’s advanced features like custom shipping rates and analytics as well.
For vendors who want to move more than 40 products per month, the Professional Plan will cost you $39.99/month plus additional referral fees based on the product category. This plan also comes with all the advanced business reporting tools you’ll need to track your sales.
Referral fees here are a percentage Amazon charges for getting you a sale by showcasing your product. It ranges from 8% to 15% depending on the category.
In terms of fulfillment, you can choose to fulfill orders yourself or use Amazon’s FBA program which also comes at a fee.
So in summary with Amazon you’ll be paying
- A referral/selling fee starting from $0.30 or more
- Monthly subscription fee depending on your plan ($0.99 per unit or $39.99/month)
- Fulfillment fees if you ship via Amazon FBA or when you ship out yourself
- Storage fees charged per cubic meter determined by the dimensions of your product
- Advertising fees (if you choose to advertise) that average $0.81 per click depending on how competitive the keyword you choose is.
Thus you have to be sure your profit margins have room for all these costs simply because they are not fixed.
For example, a small beauty product with a $40 profit margin will return only $29.87 in profit to you if you use Amazon FBA and possibly less if you ship out yourself.
Shopify Pricing and Costs
Shopify is a little more transparent with its pricing plans. You know what exactly you’re paying for thanks to three straightforward plans.
The only cost variations will be card processing fees from your payment processor and paid apps from the Shopify App market if you use any.
All Shopify plans come with unlimited products, at least 2 staff accounts, multichannel selling and real-time shipping rates.
The Basic Shopify Plan bills at $29/month and gives you
- 2 staff accounts
- Manual order creation
- Integration across different platforms
- Shopify POS
- Fraud analysis
- Standard card fees
Next is the Shopify Plan billed at $79/month which gives you everything in the basic plan plus
- 5 staff accounts
- Better shipping discounts from USPS and other major carriers
- In depth reports
- Lower card processing fees
- Added POS features
And finally the Shopify Plus plan is for medium to large eCommerce sites. It provides everything in Plus plan billed at $299/month. This includes
- 15 staff accounts
- Live shipping rate quotes from third parties
- Much lower card processing fees
- Advanced reporting and analytics
If you’re just starting out with eCommerce, the Basic Shopify plan has everything you need to set up your store and get it running.
Since Shopify’s plans are designed for easy scalability, you can simply upgrade as your business grows. Also most of the paid apps will help you run your store and business more efficiently, saving you money and boosting your profits.
Shopify wins here simply because you can budget for your business costs and hence preserve your margins better. This is important especially for growing businesses and if you want to expand your product offerings.
While Amazon allows you to calculate your costs, they may vary based on the number of other factors that are outside your control like returns and rent.
Help and Customer Support
Responsive and supportive customer care is the backbone of every business, especially online businesses. In fact more and more consumers are willing to pay for a better customer service experience.
These stats don’t only apply to you as a seller, but also to your eCommerce service provider. When you’re selling online, you’ll need a team that can help you in case something goes wrong with any part of your order process.
While both Shopify and Amazon are known to have stellar customer service, the value of that customer service isn’t exactly the same. For starters, Amazon’s main customers are the shoppers who buy from their platform.
Hence a majority of Amazon’s customer care efforts are dedicated to keeping shoppers happy so they always come back to use the platform. It’s part of why shoppers love Amazon in the first place.
For vendors, this is good news because it means Amazon will take good care of your customers. Unfortunately, that doesn’t apply to sellers in the same way.
Amazon’s support for sellers can be long and frustrating, with issues taking weeks to resolve, because sellers aren’t their primary clients. On top of that, you would have to send an email or phone in and wait for their customer support to get back in touch.
There’s also the option of filling out and submitting forms that let you describe whatever issues you may have or going into the Amazon seller community to try and get community support for your problem. Clearly, Amazon’s support isn’t that straightforward.
This can be frustrating especially when critical issues like counterfeit goods, stolen product images and descriptions and other sellers buying all your stock out for a month just to give them the competitive edge come up.
Shopify on the contrary deals directly with business owners. Their primary focus is helping entrepreneurs build profitable businesses using their platform. Hence Shopify’s entire customer support is dedicated to providing merchants with the best experience possible.
Their customer support includes almost all channels, including 24/7 phone support, live chat and tickets, social media, email support plus technical support for anything that may come up with your Shopify site. Thus, you can reach Shopify’s customer support any time, any day around the clock.
Aside from being able to quickly and easily reach the Shopify support team, you can also take advantage of their full suite of video tutorials and well-documented user libraries complete with articles, guides and FAQs to help you get the most out of their platform.
Shopify’s 24/7/365 customer support for vendors and business owners is simply unmatched.
Because merchants are Shopify’s main customer base, they have extensively dedicated their customer support resources to making sure you’re taken care of.
How to Integrate Shopify with Amazon
Shopify and Amazon are both pretty unique in what they offer and both do it exceptionally well. So the question is, what if you want the best of both worlds?
Perhaps you want to harness Amazon’s massive traffic to your product offerings without having competing products within sight. Thanks to Shopify’s omnichannel selling feature, you can actually integrate Shopify with Amazon in a few clicks.
This great news for sellers who have consistent sales from Amazon, but want to build their brand independent of the platform. This feature allows you to create new Amazon listings and offers right from within your Shopify.
You can also sync your inventory, edit product details and links plus view reports of how your products are doing on Amazon.
Keep in mind though, that you’ll still have to pay any fees related to maintaining your Amazon seller account, including rent and referral fees in addition to your Shopify subscription. So only combine these two platforms if your business is ready for that kind of expansion and cost.
Here’s how to integrate Amazon into your Shopify store
There are two main components of integrating Amazon into your Shopify store; shipping options so you can take advantage of Amazon FBA and also making sure your Amazon listings appear right.
1. First set up both an Amazon Seller account and a Shopify account if you don’t already have both.
2. Go to your Shopify account and follow this Shopify link to begin the process. You’ll see a page like the one below.
3. Read and agree to the terms and conditions. You’ll see a page like the one below.
4. Next you’ll have to edit your site’s shipping options to match Amazon’s, otherwise your orders will not be fulfilled. This is regardless of whether you intend to fulfill orders using Amazon FBA or not. Amazon offers Standard, Two-Day and One-Day shipping.
- Go to your Shopify store’s shipping setting and select ‘Manage rates’. Take note that using Amazon to fulfill your Shopify store orders means you’ll be restricted to shipping products from within the US only. Hence cancel any existing international shipping options.
- After deleting your default shipping options, create new ones that are exactly like Amazon’s; Standard Shipping, Two-Day shipping and One-Day shipping. To set the exact rates, visit Amazon’s page that details Fulfillment fees for Multi-channel Fulfillment Orders. Here are sample shipping rates that match Amazon’s. You can choose to set the standard shipping fees to whatever works for you, below its been set to free.
- Once you’re done adding in your rates, go down to the bottom of the page and click “Save.”
Now your customers will have these three shipping options as they check out from your Shopify store.
Now it’s time to configure your products for Fulfillment by Amazon. This can be done for both new products as well as those you already list.
For existing products in your Shopify store,
- From your Shopify admin menu, choose Products > All products.
- Select the name of the product you want to authorize fulfillment for.
- Under “Shipping”, select “Amazon Marketplace Web” from the “Fulfillment service” drop-down menu.
- Then go to “Inventory” and under it, select “Amazon Marketplace Web tracks this variant’s inventory” from the “Inventory policy” drop-down menu.
- Confirm that the data you’ve entered for the weight and SKU fields exactly match what you’ve entered for the same product in your Seller Central account. On Amazon, the SKU is called Seller SKU or Merchant SKU (MSKU).
- Click “Save.” to complete the process.
To Add New Products across both platforms,
- Go to your “Add a Product” page in Shopify, by first going to the “Inventory” section.
- Go down the drop down menu that appears and select “Inventory Managed by”. Select “Amazon Marketplace Web”.
- Next you’ll see a message that reads “This product’s SKU must match the SKU used in Amazon Marketplace Web.” Both SKUs (Stock Keeping Unit) must match on both marketplaces so make sure your products are synced with your Amazon inventory.
- You can find your SKU under the “Inventory” tab in your seller central account. Copy the 10-digit code under the SKU section.
- Add the copied SKU to your Inventory section in your Shopify store and leave the “Track quantity” box ticked. This will help you keep tabs on your stock levels with Amazon.
- Be sure to enter the same weight and dimensions as found in your Amazon seller central account for the item. Go to the “Manage Inventory” on Seller Central and look at the “Estimated fee per unit sold” section.
- From there check the Revenue calculator. It will show you the exact weight of the product. Enter it into your Shopify settings and then Save.
Shopify vs Amazon FAQs
That really comes down to what you intend to sell and your target market. It should also be influenced by your long-term business goals.
What kinds of products are you looking to sell and what are your margins per product? Do you someday want to have a brand? What about scalability? Does your product already have existing users?
If you intend to sell high-ticket items, heavy items or both, then Shopify will be a better option since you cut out inventory costs and other fees that come with Amazon FBA.
Conversely, if you’re selling apparel or lightweight fast moving consumer goods, then Amazon may be a good place to sell. You can also get the best of both worlds by integrating your Amazon listings with your Shopify store.
Shopify has built a solid reputation as one of the best options for eCommerce builders today. In fact, it powers over 800,000 online retail stores, helping them generate upwards of 61 billion dollars in revenue.
Its ease-of-use, 100+ payment gateways and integration with multiple apps make it a top consideration for anyone looking to build an eCommerce store.
That notwithstanding, there are plenty other best eCommerce platform providers that can equally work well depending on your needs. Our full review of the best eCommerce platforms provides some equally great suggestions.
Both options can potentially be budget-friendly or expensive. Shopify and Amazon both have lower priced plans for people just starting out or on a budget.
If you want to determine the cheaper option, you’ll have to consider your long-term business goals.
Your costs with Amazon will be influenced by how many units of products you plan to sell per month, what categories they are in, how much they weigh and their size.
Do you intend to sell one product or multiple products in different niches? Lastly, consider if your products are fast movers because Amazon will charge you for storage. Take note that these fees are not fixed since some are in percentages.
Shopify on the other hand has higher fixed monthly costs. You pay for your subscription plan plus any additional fees from paid apps and card processors and that’s about it.
This means you can better estimate your costs when using Shopify and cover them in your margins.
Amazon may appeal to many as the more beginner-friendly option because of its relatively simple onboarding process compared to Shopify.
There’s no need to build a website, worry about web pages or drive traffic to your site. Simply list your products with the right ASIN numbers and you can start earning immediately.
The catch however is that in the long-term you could end up losing in terms of unexpected fees, stiff competition from other sellers and even counterfeiters who copy your product and sell it at half price.
So ultimately, your long-term business goals should influence your decision.
Shopify vs Amazon Comparison: Which One Should You Choose?
For anyone interested in running an online store or eCommerce site, Shopify and Amazon are two great options that will show up on your list. Both platforms are hugely popular among the eCommerce community and many people have achieved success using one or the other.
Each one is designed with a different kind of business model in mind. If you want to benefit from lots of free traffic, a strong and trusted pre-existing brand, potentially hassle-free shipping and fulfillment plus done-for-you customer care, then Amazon would be a better option.
However keep in mind you’ll have to contend with fierce competition, unstable overheads, lots of returns and a zero customer base.
For those looking to build their own brand presence, a strong customer base with repeat buyers, full control of your eCommerce store and product pricing, fixed overheads plus multiple payment options, then Shopify is ideal for you.
On the flip side, you’ll be responsible for driving traffic and marketing your own products, handling customers and fulfilling orders. Ultimately, your long-term business goals should determine which option works better for you.