Shopify vs Amazon

Shopify vs. Amazon: Which Is Right For You In 2020

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Global eCommerce has taken over, rising from $1.3 trillion in 2014 to nearly $4 trillion and counting. For those who follow website builders and eCommerce, you’ve probably noticed a battle between Shopify and Amazon as online storefronts. Amazon often wins because of its traffic, which is upwards of 150 million visits per month. 

However, Shopify has increased its base over the past few years, reaching new heights by hosting over 800,000 businesses. It’s the third-largest online retailer after Amazon and eBay.

Which is Better: Shopify vs Amazon

After testing out both online sales channels, we compared pricing, features, customer support, user interface and other factors to determine which eCommerce platform really works best for today’s savvy merchants.

While these two platforms may look similar, you have to remember that Shopify is a specialty ecommerce platform, while Amazon is a huge online marketplace.

Here’s exactly how these two platforms differ:

    • Shopify allows you to build your own, standalone online store with their tools and resources, and in return, you pay Shopify a monthly fee. If you want to add third-party apps to make your store better, you may increase your monthly costs.
    • Amazon lets you sell through their marketplace, much like a market stall. You can set up a store but within the limits of Amazon.com. There are also a few more restrictions for merchants on Amazon.

If you’re a dropshipping company, both providers are strong supporters of dropshipping (whether that be through Amazon’s FBA program or through a third-party provider such as Oberlo).

Advantages of Shopify

One of the best parts of Shopify is that beginners can create online stores without any coding knowledge. You don’t have to install any software or set up hosting. There is a range of Shopify plans, including :

    • Basic Shopify
    • Shopify
    • Advanced Shopify

These tiers range from $29 to $299 per month to get started, and they’re designed to accommodate both small business and mid-to-large sized companies. For Shopify, there are credit card and third-party payment processing fees (that vary depending on your plan) There are no additional transaction fees so long as you use their “Shopify Payments” system.

Powerful Ecommerce Tools

Shopify is well known for its store templates that are easy to set up. If you’re just starting out with an online store, it’s easy to scale, and there are a number of apps to customize your shop on the Shopify App Store. Some of these are available for free, and some are not.

Beautiful, Customized Web Design

You can customize your Shopify store to your heart’s content. There are thousands of themes to choose from, and most of them are mobile-friendly and responsive. They also provide the “Liquid template engine” to create your own custom websites if you don’t want to use their store builder or themes.

Shopping Cart Functionality

We like that Shopify has an “abandoned cart recovery” option, which reminds visitors with an automatic email to check out and finish their purchase. You can customize all of your marketing messages and create a sophisticated automated email campaign to nurture first-time visitors into lifelong customers.

Disadvantages of Shopify

While there’s a lot to like and enjoy concerning Shopify’s platform, there are some caveats that need to be considered before taking the plunge.

Additional Costs for Apps and Credit Card Fees

There are a ton of extra costs once you sign up. Even though you may think it’s a steal to set up a store for $29 a month, you’ll end up paying more in transaction fees and fees to add certain “high-quality” apps.

Fewer Baked-In Marketing Tools

Unlike Amazon, Shopify doesn’t really have too many inherent marketing tools, so merchants are fully responsible for marketing their website and products across the internet. You’ll have to build up your own brand awareness to get seen by your targeted audience.

Processing and Fulfillment

Compared to Amazon, you’re entirely responsible for handling all processing and fulfillment of your orders. If you want to automate that process, you’ll need to use a third-party provider. This will require you to conduct the research and vet out providers for that yourself.

Advantages of Amazon

With millions of visitors per day, Amazon is the most popular online marketplace. Right off the bat, your Amazon ecommerce store can receive excellent exposure just by executing SEO on your products. Using the right keywords in your product descriptions and titles, it’s easy for customers to find and purchase your products.

While Amazon makes this easy, it’s up to you to get reviews and testimonials from customers. Any poor reviews and ratings could throw off your marketability and even get you removed from Amazon’s marketplace.

Great Options for Specific Merchants

There are certain merchants who make more than others on the platform. These include:

    •  Merchants selling unique-to-them items
    •  Merchants who sell niche or hobby items
    •  Merchants selling low-cost used or refurbished products

If you have an online business that sells something unique within a popular niche, you should have a store on Amazon, as well as a Shopify store. This method works out best to increase your sales while keeping your options open.

Massive Traffic and SEO Potential

Jeff Bezos is continually expanding Amazon’s services. With Amazon Prime, Alexa, Echo and many others, Amazon has dedicated, loyal everyday shoppers who would prefer to stay on the ecommerce website if what they’re looking for is available there.

Amazon’s search engine is one of the strongest out there. With that said, there are tons of search engine optimizations that you can conduct for your products to get them seen by more people.

Due to its size, however, there are hundreds of thousands of online sellers. Many of them have been optimizing their products on Amazon for years. Your business may have a hard time if you choose a particularly popular product category.

We recommend conducting research prior to creating your seller account, as well as working with an SEO and market research company to help determine a good strategy for your business.

Amazon FBA

One of the biggest draws to selling products on Amazon is its fulfillment program. Essentially, as long as you hold a certain allocation of inventory in an Amazon warehouse, they’ll process and ship any and all products you sell through the site.

Not only that, but your products become eligible for Amazon Prime two-day shipping. Amazon will also handle all customer service requests and returns too.

This can be a huge advantage for small businesses that may not have the time or resources to take care of every single order that comes through. While there are fees associated with Amazon FBA, depending on your size and capacity, it may be worth it.

Disadvantages of Amazon

Just like it was the case for Shopify, there are a lot of different considerations that you should take into account when it comes to selling your products on Amazon.

Pay Attention To Policies

For one, there are many policies that FBA (Fulfilment by Amazon) merchants must understand before building a store on the popular site’s marketplace. These pertain to selling, shipping, marketing, customer communication and many other topics.

If you violate Amazon’s policies or the seller code of conduct, you could have your store simply “turned off.” Amazon sellers frequently complain of Amazon’s changing policies that often reflect in lower profits or simply losing their store’s viability on the platform altogether.

Reviews Make-Or-Break You

In addition, merchants must get reviews to rank higher in Amazon search and get the attention of savvy Amazon shoppers. Everyone looks at reviews and ratings before they make a purchase, so even one poor rating can bring your entire shop’s selling power to a halt.

Less Control

Finally, you don’t have as much control as you do with Shopify. While you can set up a store with Amazon’s merchant interface, it’s not the same as building your own site with its own theme and navigation. You’ll have to rely on Amazon.com to display your product listings correctly.

Merchants also don’t have control over shipping fees. The massive online marketplace determines how much it should cost to ship an item based on a number of factors, which aren’t up to you. Many merchants have complained that they aren’t adequately compensated for shipping costs. In addition, you have to earn faster shipping rates if you’re a new merchant.

Additional Fees

Just like Shopify, there are fees associated with transactions. While Shopify lets merchants skirt past those when using Shopify Payments, Amazon takes several selling fees out of your sales. These vary depending on the products you sell and if you’re set up as an Individual Seller or Professional Seller on the platform.

Shopify vs Amazon: Which One Should You Use?

We think a better question is, “why not use both?” Shopify has certain advantages over Amazon, such as being able to control your site design and set your own shopping cart preferences. However, all of your marketing is up to you.

Amazon sellers and Shopify sellers need to diversify and always think about their brand. Although Amazon is a great marketplace for finding new brands and products, many customers conduct Google searches on products and brands they find because they want to find your online store.

For many business owners, it may make sense to take a multichannel approach to your company – where you have your own storefront on Shopify and sell/advertise a selection of products on Amazon to build up your customer base.

Ready to start selling? Work with a trusted digital advertising agency that can help set up your ecommerce website and create an omnichannel digital marketing strategy for your business to ensure success.