Shopify and Amazon are giants in the e-commerce world, but which one is better for your business? Read on to make the right choice.
- Both Shopify and Amazon are strong e-commerce platforms.
- Amazon is better for exposure and a built-in marketplace.
- Shopify offers more control over your store and sales.
- You don't necessarily have to choose one or the other; you can integrate both.
Shopify and Amazon offer excellent e-commerce solutions, and both platforms are popular. Shopify announced at the June 2019 Shopify Unite event that the company had 820,000 merchants. Amazon's figures are less precise, but it's commonly believed that more than 2 million sellers have products listed on that e-commerce platform.
While both platforms offer potentially large exposure, the benefits and challenges of selling through them are unique. Businesses must choose the platform that works best for their needs, products and selling methods.
What is Shopify?
Shopify is a commerce platform. It lets you create an online store and manage all e-commerce functions — including inventory, payment acceptance and shipping — in the same place. It's also a hosted platform, which means it's cloud-based. You don't have to purchase software and pay to upgrade it; your Shopify membership ensures you have access to the latest updates.
What are some benefits of Shopify?
Shopify offers an easy setup and friendly administrator interface, making it one of the most popular e-commerce platforms on the market. This program also provides several free professionally designed templates.
The administrative options for Shopify are listed in English, but you can create your storefront in any language. Additionally, the platform lets you choose which payment gateway to use. It also accepts funds in several currencies.
Another popular function of Shopify is its E-Commerce University, which provides access to numerous articles, how-to guides and other training resources. Shopify also has a 24/7 in-house support team.
Keeping your customers happy is one of the most important things you can do when operating an e-commerce business. Shopify helps you provide the best tools to your customers so that they purchase through your store. Some of these features include the ability for your customers to zoom in to get a better look at your products and the ability to show other customer reviews. You can choose to work with third-party fulfillment services (or drop shippers). You can also opt to fulfill all of your own orders.
How much does Shopify cost?
As of November 2019, Shopify offers three pricing options. The cost is between $29 and $299 a month, plus transaction fees for each sale. You can also try Shopify for free for 14 days to help you decide whether it's right for your business and which plan you might need.
- $29 per month, plus transaction fees
- Transaction fees of 2% on all sales that don't use Shopify payment, in addition to credit card fees
- Features: Two staff accounts, an online store with a blog, unlimited product listings, 24/7 support, manual order creation, discount codes, SSL certificate, abandoned cart recovery, ability to print shipping labels, fraud analysis, POS app for local sales, third-party POS and hardware support
- Shipping discount: Up to 64%
- $79 per month, plus transaction fees
- Transaction fees of 1% on all sales that don't use Shopify payment, in addition to credit card fees
- Features: Five staff accounts and everything included in the Basic plan, plus gift card options, professional reports, USPS Priority Mail Cubic pricing on qualified shipments, register shifts and unlimited Shopify POS staff PINs
- Shipping discount: Up to 72%
- $299 per month, plus transaction fees
- Transaction fees of 0.5% on all sales that don't use Shopify payment, in addition to credit card fees
- Features: 15 staff accounts and everything included in the Shopify plan, plus an advanced report builder and third-party calculated shipping rates
- Shipping discount: Up to 74%
Shopify is extremely flexible. If the three major plans above don't cover your needs, you might also consider Shopify Plus, which is a custom-designed solution for enterprise organizations. Another option is Shopify Lite, which lets you sell items on Facebook or a blog for only $9 a month but doesn't include a Shopify store.
What is Amazon?
You probably already know that Amazon.com is an e-commerce behemoth. But did you know that more than half of all the units sold on the platform are sold by third-party sellers? You can sell on Amazon as an individual or a professional, and the platform offers several options for shipping.
What are some benefits of Amazon?
Probably the biggest benefit of having your products on Amazon is that it makes it easy for customers to find you. As of 2018, 54% of people started their product searches directly from Amazon. Only about 46% of the search traffic began on Google.
So, for some products, if you're not on Amazon, more than half of potential customers may not find you.
Here are some other benefits of selling on Amazon:
- Traffic and repeat business, with less marketing effort. Amazon already owns the brand power, and you get a boost just from being listed on the site. That doesn't mean you can sit back and relax completely, but you don't have to put in the SEO work to make your own site rank.
- Automatic trust. People won't worry if you're secure and trustworthy for payments and shipments. Amazon builds in a lot of protection for shoppers, so they're more likely to take a chance on you.
- Access to Amazon resources, including shipping and fulfillment options, shipping discounts, the third-party seller community and Amazon customer service.
How much does it cost to sell on Amazon?
The cost of selling on Amazon depends on how you sell and whether you want Amazon to fulfill orders for you.
If you're fulfilling your own orders, you can sell as an individual or a professional.
- Cost: 99 cents per sale, plus referral percentages
- Features: Ability to add new items to the Amazon catalog, option for Fulfillment by Amazon
- Cost: $39.99 per month, plus referral percentages
- Features: Everything included for individual sellers, plus the ability to sell products throughout North America, bulk listing and reporting tools, custom shipping rates, the ability to offer special promotions and eligibility for top placement on product pages
How much Amazon charges for referral fees depends on the product category. For books, it's 15% of the sales price, for example. But for consumer electronics, it's 8% or 30 cents minimum.
You can also pay to have items fulfilled by Amazon. That means your inventory resides in an Amazon warehouse and Amazon handles the shipping. You'll pay a per-unit shipping fee on every order plus a warehousing fee per cubic foot of product stored.
Choosing between Shopify and Amazon
Both platforms have their pros and cons. Shopify requires you to brand and market your store, while Amazon comes with a built-in audience. But Amazon limits how much you can truly control about your sales; for example, third-party sellers can't list every type of item. Ultimately, you have to determine which platform best supports your business. Or you can choose to integrate both Amazon and Shopify, to get the best of both platforms, but you'll have to pay for both.