So, you want to make money online? And probably one option you have heard was Ecommerce Amazon vs Shopify. Yes if done right this business model can make a lot of money.
And ecommerce isn’t going to die soon; it is expected online retail to increase in the near future.
Alright now we understand that this opportunity is legit.
But this did not answer your question, right?
So which platform is more legit to sell your products? Lets jump in !
What are the differences between Amazon and Shopify
So here is the thing: Amazon and Shopify let you sell products online, but they are not the same thing.
The biggest difference is Shopify is an ecommerce platform which lets you to build the website where you will place your products. However Amazon is an online marketplace which lets you place your products on their website.
When you build a Shopify website, you’re making a separate ecommerce store. Shopify provides you with the tools you need to create your own store. You are the one who is in control.
However, with Amazon you are creating a page in amazon’s website where you put your products alongside other peoples pages and products.
Another difference is that Amazon is already getting tons of traffic, which allows you to reach millions of customers. And obviously, Amazon is really popular and has an awesome reputation. So, you can get a lot of sales just with amazon’s own traffic easily, right?
Let’s find out!
Pros and Cons of selling on Amazon
1.You get more traffic
Each month Amazon gets over 213 million unique visitors. This platform already gets millions of people on their site to buy products and services available on Amazon. If you open a store (page) on Amazon, you potentially can access this traffic.
2.Amazon handles your products
When you are selling on amazon, you can choose amazon to handle your products. This system is called Fulfilment by Amazon or Amazon FBA.
With this FBA system, you send your products to Amazon’s fulfillment center. When someone chooses to order your product, Amazon will pick, pack and ship the chosen product. Plus, Amazon provides customer service if people have issues with your products.
This system is unique to Amazon. However, with platforms like shopify you are the ı-one who is in charge of the entire process, including shipping packaging and shipping.
This makes it easy for you to sell products without worrying about shipping and customer service, since you don’t have to worry about these.
3. Amazon got your back
Here is the thing Amazon has a great reputation. So people will be more confident buying from Amazon even if they did not hear about you before. However with Shopify you will have your own domain, which people won’t have any clue about your new business until you build and market it.
4.Easy shop setup
Another difference between shopify and amazon is that It is super easy to set up a shop on amazon. You just need to create an account and follow the steps. When all the steps are completed, your products will be listed and you will be able to sell.
Amazon also enables you to customize your storefront. You can use templates from amazon to change the look and feel of your Amazon store.
5.Free 30 day pro account trial
If you are new to ecommerce, Amazon is a good place to start, plus they offer a free 30 day trial for you to test things out.
This is fantastic if you are a newbie to the ecommerce business model.
Amazon has hundreds of fulfilment centers around the globe.
Fast delivery is an important part for ecommerce customer experience. And thanks to amazon, It does not matter where your customers are.
Now, let’s face some harsh reality
1.Amazon is crowded
Amazon is a crowded marketplace. Which means you will face a lot of competition. Over one million small and midsize businesses sell on Amazon. So if you want to make some sales be ready to face tough competition.
If you want to compete with others on Amazon, you need to do something called Amazon SEO. And you will need to outperform your competitors.
2.Amazon seller fees
If you want to sell on amazon, you will have to pay Amazon seller fees.
There are 2 plans for you-
- Individual ($0.99 per item sold): This plan is available if you sell fewer than 40 units per month.
- Professional ($39.99 per month): This plan is available for businesses that sell more than 40 units and want access to advanced selling tools.
Also you will be charged a referral fee for every item you sell and this fee depends on the product. Here is the selling on amazon fee schedule.
If you choose to use FBA, you will have to pay additional fees for shipping and packaging. And at the lowest point it will cost you $1.97 per item.
At the highest price point, it can cost $137 plus $0.91 per pound above 90 pounds for each item. You’ll also pay $0.75 to $2.40 per cubic foot for each item that your inventory occupies.
Which usually means the lighter your product the cheaper.
So overall amazon has few fees that you will need to pay, which does not mean you can’t profit.
3.Amazon is an online marketplace
This is the biggest difference between Shopify and Amazon is that Amazon is an online marketplace.Which belongs to this guy-
If you are looking for a personalized website that is 100% up to you, you won’t get it with amazon. With amazon You’re just creating a storefront or a “page” in amazon. Only way someone can find you is through amazon.
Yes, Amazon might allow you to “customize” your storefront, but it is very limited. This is probably a drawback for brands that want to have a highly customised page. And this might not be good for branding.
4.Limited payment options
Another drawback from Amazon is that Amazon has limited payment options. Their only payment option is Amazon payment, which includes credit and debit cards. Third-party tools like PayPal are not allowed.
I assume that you have done customer research, and your potential customers prefer to pay with PayPal. This is not good news.
Pros and cons of selling on Shopify
Now we are on the other side of the ring: Amazon vs Shopify. Let’s see how Shopify can benefit or drawback your business.
When you are building a website using shopify, you won’t get lost or confused. Shopify enables the website you desire for your ecommerce business.
Shopify offers lots of templates for you to build your site with some inspiration.
Shopify’s interface is really friendly too. Shopify site builder offers a drag-and-drop feature which offers really easy to used to build your website and has a variety of templates you can choose from.
Shopify sites are fully responsive, meaning they’re already ready to adapt to mobile devices. You won’t need to do additional work to make your site look good on mobile because Shopify integrates responsive design.
When you choose to build your website with shopify, You get access to tools that help you to create the best site you can.
Here are the list of tool you get with shopify-
- Abandoned cart recovery tool
- App integration
- Automatic tax calculation
- Inventory system
- Invoice generator
- Slogan maker
- And more
These are just a few of the tools you can access while you build your site. If there’s a tool you need that’s not in your dashboard, you can get a lot more tools at Shopify’s app store to get additional tools.
This is where shopify knocks out Amazon. Compared to amazon, you will find out that Shopify offers dozens of payment options.
First of all, Shopify offers their payment option called Shopify Payment. If you use this payment option, you won’t pay any fees for the transaction.
And Of course there is a lot more. Shopify offers dozens of payment methods. Like PayPal, Amazon pay, Credit and debit card payments.
If you choose to use one of these outside payment options, you’ll have a 0.5% to 2% transaction fee, depending on which Shopify plan you have.
4.You are the boss
One benefit of shopify is you are not creating a page on other websites. When you are creating a website with Shopify, you are 100% in charge of the website.
You can design it as you want, you can add the programs and functions as you want. Yes this is actually really useful. Why?
When you have full control over your website, you can leverage it to brand your ecommerce business.
Similar to Amazon, Shopify has some additional costs too.You will face them when you want to use their services.
First of all, you will need to pay a monthly fee for your website. The cost will depend on which plan you got
Here are the costs-
- Basic Shopify: $29 per month
- Shopify: $79 per month
- Advanced Shopify: $299 per month
Plus, if you want some top-notch design for your website, you will have to pay for the premium themes. There are free themes for shopify, but they might not offer what you need.
Here is the shopify plans-
|Shopify Plans/Prices||Basic Shopify||Shopify||Advanced Shopify|
|Monthly Price||$29 /mo||$79 /mo||$299 /mo|
|Credit card fees||2.9% + $0.30||2.6% + $0.30||2.4% + $0.30|
|Transaction fees / 3rd party gateway||2%||1%||0.5%|
|Abandoned cart recovery||Yes||Yes||Yes|
|Free SSL certificate||Yes||Yes||Yes|
|Advance report builder||–||–||Yes|
|Real-time shipping rates||–||–||Yes|
On top of that, some apps for your shopify site might have their own fees. Shopify offers the essential apps for free but, it is up to you if you want to use a paid app.
Your website is new, so nobody knows about it. That is why you need to do Marketing and it is going to take time, money, effort.
Marketing your ecommerce website is not an easy task. Yes you also would need to market your products with Amazon but it would be quite easier since amazon already has trust and Good SEO.
3.Limited website functions
Ok, my bad, maybe you cant 100% customize your website.
Shopify website design is not limitless. You can use the templates they offer, but you’ll still be limited with what you can do with your site’s design and functionality.
What is the problem with this when you don’t have a fully customisable website it might be hard to stand out from the crowd? ZPlus this might hurt branding your ecommerce business.
If you want to use third party payment options like PayPal there is a little transaction fee which is a shame.
But I actually would argue if this is really a con for Shopify, since Amazon has them too.
Which is the best?
Truth is it is your business. First of all you need to do market research. Once you have written your goals down you will have a better understanding of which is the best for you.
aIn my opinion if you are a beginner to the ecommerce business model go with Amazon since you don’t need to create reputation and marketing isn’t going to be tough like Shopify.
But view this positively you would learn a lot about marketing if you started a shopify site.
Amazon and Shopify together?
Wait! The idea pops up in your mind. Is it actually good?
Absolutely! Using Shopify and Amazon together is actually recommended.
There is no reason why you should not use Amazon and Shopify together. It’s never a good idea to have all your eggs in one basket anyway.
To make things even easier, you can integrate Amazon with Shopify. Simply connect your Amazon selling account to allow you to reach Amazon customers instantly. This way you’ll get the best of both.
I hope this blog post helped you make a decision for your goals. If you have any idea or recommendation, let’s connect at the comments section. Don’t forget to share!