Shopify vs. Amazon: Which is Better for Ecommerce Sellers?

elling products online can help you expand your existing retail business or start a new one. With effort and a bit of luck, you can build up a solid income stream and audience base. One of the first decisions you'll make in the process is your sales platform. Shopify and Amazon are known for supporting online sellers, but they work differently. In this article, you'll learn about the differences between Shopify vs. Amazon and which is best for your business.

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Shopify overview for e-commerce sellers

If you want to build a slick, personalized website for your e-commerce store, Shopify is the way to go. Shopify offers a robust, cloud-based platform that makes creating a fully functional website easy with no coding necessary. Over 10% of U.S. e-commerce sales occur on Shopify sites, and millions of merchants rely on Shopify as their go-to solution for online business, including big names like Allbirds, Crate & Barrel, and Kylie.

Sellers can choose from over 150 templates to build their online store, which includes features to optimize online sales, such as quick load speeds and mobile optimization. All templates are easily customizable, allowing you to switch colors, fonts, images, and menus to meet your business needs. You can sort through available templates based on your company's industry or specific features you require, such as an age verifier or language translations. [Ecommerce Website Templates - Free and Premium Themes for Your Online Store. (shopify.com)]

A built-in payment solution comes automatically with all Shopify stores. Shopify Payments allows eligible merchants to accept online payments with Visa, Mastercard, American Express, and Apple Pay for a fee that varies depending on your plan type. However, if you don't meet eligibility requirements, you must work with a third-party payment processor to accept payments via your Shopify store. [Shopify Help Center | Shopify Payments eligibility]

Shopify offers numerous features and customer service options that benefit store owners and customers, including promotional integrations with social media and online marketplaces, inventory fulfillment, abandoned cart recovery, and support for gift cards. You're also not limited to selling products exclusively through your website. You can integrate Shopify's payment system into your POS for in-person sales at events, pop-ups, or retail shops. [Shopify Pricing - Setup and Open Your Online Store Today – Free Trial - Shopify USA]

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Pros of using Shopify

There are several advantages sellers can look forward to with a Shopify storefront.

Customization

With over 150 themes to select from, you shouldn't have a problem finding one that suits the needs of your business. The theme is merely a starting point for your website. You can change the colors, fonts, images, and other details to fit your tastes. You can also add specific features like color swatches, lookbooks, and animation.

If you prefer a custom design made especially for your business, you can build it yourself or collaborate with Shopify Experts. A Shopify Expert can help you with every aspect of the website, from its development to design. [Online Store Builder—Create One Quickly (2023) (shopify.com)]

Branding

With Shopify, it's easy to personalize your e-commerce store to suit your company. You can design your own logo or upload one you already have so it appears on your website. Aligning your color scheme, messaging, images, and videos can help you establish a recognizable brand that customers identify with.

Shopify includes many promotional and marketing tools, making it easy to share products, videos, and blog posts with followers on social media or through email, further strengthening your brand. [Online Store Builder—Create One Quickly (2023) (shopify.com)]

Control

You're in total control of your Shopify e-commerce store, from selecting your domain name to designing your product pages. Since you own the website and it's not part of a marketplace, you don't need to worry about external factors that impact your ability to sell, such as changes to a search algorithm or the removal of a product line.

Shopify includes a robust analytics program to help you understand the customers who visit your e-commerce store and how they interact with it. You retain complete control of the data, which you can use to make better business decisions and improve your marketing strategies. [Online Store Builder—Create One Quickly (2023) (shopify.com)]

Integrations

Shopify integrates with numerous platforms and apps, including enterprise resource planning systems and customer relationship management software such as Netsuite and SAP. Integrations connect your store with essential software tools to help you run your business. They can help you optimize your systems so you don't need to transfer information between platforms manually.

If you can't find the integration you need, Shopify has an API and developer tools available. You can use them to create your own customized integration quickly and seamlessly. [Integrate in minutes with Shopify Plus - Shopify USA]

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Cons of using Shopify

Shopify falls short in a few areas. Here are some drawbacks to be aware of.

Customer acquisition

It can be challenging to obtain customers with a Shopify website, especially if you don't already have a customer base. You'll need to take charge of marketing your business, from sharing it on social media to running ads and sending promotional emails. While Shopify does offer a few marketing tools to assist you, such as customer segmentation and email templates, you have to pay to access them. You can't count on people to randomly find your store through a product search on Shopify as they might with Amazon. [Boost customer engagement and drive more sales with Shopify Marketing Tools - Shopify USA], [How to Decide Between Etsy, Amazon, and Shopify for Selling Online | Inc.com]

Additional costs

It's easy to incur additional expenses with a Shopify store. Most of the themes offered by Shopify require a one-time fee, which can be several hundred dollars. Adding plug-ins can also increase your costs. Plus, all credit card transactions processed through Shopify incur a fee, which varies according to your plan type. [Shopify Pricing - Setup and Open Your Online Store Today – Free Trial - Shopify USA]

Technical knowledge

While it's entirely possible to create a Shopify store without coding knowledge, you may miss customization options that could make your website even more attractive to visitors. A little bit of coding knowledge is beneficial. However, you can always collaborate with a developer from the Shopify team if you need help. [Website Builder 2023 | Create a Website in Minutes (shopify.com)]

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Amazon overview for e-commerce sellers

Amazon is an e-commerce behemoth known for selling everything consumers might need, including electronics, apparel, and home goods. Through Amazon, retailers can reach an audience of millions of consumers without needing to spend lots of money on marketing. That makes Amazon attractive to newbie sellers and small businesses trying to get a foothold in their chosen market.

With Amazon, you don't need to have a massive inventory of products. You can stock up on a few items and see how they sell before making additional investments. Established retailers can also benefit from Amazon as a secondary revenue stream, allowing them to reach customers who aren't already aware of their offerings.

To start selling on Amazon, you must create a profile and select a sales plan. There are two main plans: Individual and Professional. The Individual plan charges you a flat $0.99 fee for every item you sell, while the Professional plan is $39.99 monthly. Amazon charges additional referral and fulfillment fees, so it's essential to review those when determining how you'll price your items. [How Much Does it Cost to Sell on Amazon? | Pricing Calculator]

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Pros of using Amazon

There are several distinct advantages to using Amazon as your e-commerce sales platform.

Massive customer base

Amazon is the go-to e-commerce website for many consumers. Nearly 7,400 sales occur every minute on Amazon. When you use this platform to sell your products, you guarantee they'll be seen by potential customers, which may take time to achieve if you rely solely on your personal e-commerce website. [Sell on Amazon | Build Your Ecommerce Business]

Trust

Amazon is a household name, which means consumers are more likely to trust it when making an online purchase. They may feel more comfortable pulling out their credit card and buying something on Amazon than on an unfamiliar website.

Fulfillment options

Retailers have flexible fulfillment options to choose between on Amazon. They can handle fulfillment entirely on their own or sign up for Fulfillment By Amazon (FBA). With FBA, you send your products to designated fulfillment centers, and they'll handle the packing and shipping for you. [How Much Does it Cost to Sell on Amazon? | Pricing Calculator]

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Cons of using Amazon

While Amazon can help you gain exposure among customers, it does have some downsides.

Competition

There is a lot of competition on Amazon. Depending on the category you sell in, you may face dozens or hundreds of retailers selling items that are quite similar to yours. You'll need to find a way to stand out among your competitors for the best chance of success.

Fees

Selling on Amazon isn't cheap, and fees can take a big chunk of your profits. Besides choosing a sales plan, you'll also incur referral fees. These average around 15% of your product sales price, depending on the category your goods fit into. If you use FBA, you'll incur a fulfillment fee for every item shipped, which typically varies depending on the item's weight. Some sellers may also need to pay inventory storage fees. [How Much Does it Cost to Sell on Amazon? | Pricing Calculator]

Control

While you can create an online Amazon store specific to your brand, you'll have limited customization options. Amazon will provide you with an Amazon-branded domain, which you can share with your audience. Your store's appearance will follow Amazon's basic theme, but you can write your own product descriptions, upload images, and share videos. [How to Build an Online Store in 2023 (amazon.com)]

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Shopify vs. Amazon: How they stack up

There are a few major differences between Shopify and Amazon that can impact your decision-making process.

Cost

Shopify offers three primary pricing plans for sellers:

• Basic starts at $39 monthly
• Shopify starts at $105 monthly
• Advanced starts at $399 monthly

In addition to your plan costs, you'll incur transaction fees for credit card sales made using Shopify Payments. [Shopify Pricing - Setup and Open Your Online Store Today – Free Trial - Shopify USA]

Amazon has two primary plan structures: Individual and Professional. The Individual plan charges a flat fee of $0.99 for every item sold. Professional is $39.99 monthly, regardless of how many items you sell.

In addition to the plan fees, you'll incur a referral fee for each sale, which depends on your product's sales category. Sellers that use FBA will pay a fulfillment fee, too. [How Much Does it Cost to Sell on Amazon? | Pricing Calculator]

Control

With Shopify, you retain complete control over your store's appearance and customer data. You can modify your website to include features and functionality that improve your sales and client experience. [Shopify Pricing - Setup and Open Your Online Store Today – Free Trial - Shopify USA]

Amazon sellers don't have as much creative control over their site appearance. They can write product descriptions and share images and videos, but their storefront will follow the Amazon theme. [How to Build an Online Store in 2023 (amazon.com)]

Customer reach

With Shopify, you'll need to build your following to find long-term success with your e-commerce website. You won't have the sizable pre-existing customer base that you'll find on Amazon. However, building your following strengthens client relationships and loyalty, which will be advantageous in the long run.

Ease of use

Both Shopify and Amazon are relatively easy to use and don't require any coding knowledge to get started. Amazon may be a little more simplistic since you won't be modifying a website but simply uploading images and videos and filling in product descriptions.

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Shopify vs. Amazon: Which one is best for e-commerce sellers?

Deciding between Shopify and Amazon is difficult since both offer significant advantages. You may find that selling through both platforms is beneficial, especially if your online store is new and you don't have a large audience.

You'll get the best of both worlds when you create your own Shopify store and sell through Amazon. That way, you can work on building your brand through a website you control while also drawing upon Amazon's massive customer base to make early sales.

Carefully consider your resources and objectives when making your decision. If time and money are an issue, selling on both platforms may not be viable. Instead, you'll need to select the platform that best suits your needs.

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Shopify and Amazon offer different benefits to e-commerce sellers

Both Shopify and Amazon provide effective platforms to help you grow your e-commerce store, whether you're just starting or have an established business. Amazon should be your first choice if you're seeking to reach a broad audience quickly. However, companies that want to develop a recognizable brand and following will find Shopify optimal.

Choosing the right e-commerce platform is important, but you'll also need a banking solution that integrates well with your online shop. Explore Novo's integrations that allow you to easily facilitate sales through multiple e-commerce platforms, including Amazon, Shopify, Etsy, and eBay.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

Novo is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A.: Member FDIC.

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