Shopify vs Amazon: Which One is Better for Your Small Business?
Many retail business owners know the importance of eCommerce to their overall sales, but plenty are still weighing the pros and cons of selling their products on Shopify vs Amazon. Is one of these well-known online marketplaces a better fit to sell your products?
The answer to that overarching question isn’t as straightforward as you might think. Analyzing Shopify vs Amazon requires a more in-depth look at the advantages of each platform, including convenience and ease of use, the specific product you’re selling or your industry in general, and the associated fees with doing so.
One of the best ways to start the process of deciding on an eCommerce platform is to travel down the path you take whenever you make a purchase. What platforms do you use to purchase certain products? What do you like to see when you visit online stores and browse products?
Ultimately, the purchases you make on these sites are of products that appeal to you most—both from a usefulness standpoint, but also of how it’s presented online. By keeping your customer’s journey in mind, it’ll help you analyze whether one online marketplace is better than the other—or whether they could both be beneficial to your business.
Selling your products online
It’s no longer a secret that selling products online can be advantageous to your business. It almost goes without saying that, no matter whether you sell physical products or services, eCommerce is a must for companies today.
There are several reasons why this is true:
- 87% of all shoppers start product searches online, versus 71% last year
- selling online is often cheaper than opening a physical store
- selling online allows you to reach more customers across the globe that you would be challenging to achieve if you didn’t have an eCommerce presence
These are all main reasons why eCommerce giants such as Shopify and Amazon have done so well over the last few years—and, in the process, done so well for those businesses who list on their sites.
Shopify is an eCommerce platform that gives businesses the ability to quickly and easily build and manage online stores. Instead of a company developing their in-house eCommerce solution on their website, they instead can opt to open an eCommerce store powered by Shopify.
The company was founded in 2004, and the platform was released in 2006. Shopify is based in Ottawa, Ontario, Canada. The company has more than 1 million businesses in about 175 countries using the platform.
The best part about Shopify is they have built-in solutions to make it easy for just about any business to design their own eCommerce store. They have more than 70 templates available, and payments are handled through a built-in payment processor powered by Stripe.
Shopify isn’t just for small businesses, either. They host eCommerce stores for mom-and-pop shops as well as huge companies such as Nestle and Tesla.
Amazon is the world’s largest online retailer. Instead of building a standalone eCommerce store as you would on Shopify, Amazon provides a platform where you can easily sell your products and/or services.
The Amazon headquarters are in Seattle, Washington, and it was founded way back in 1994. There are more than 2 million different sellers on the Amazon platform.
The best part about Amazon is that it has an absolutely massive audience; the site attracts more than 150 million visits per month just in the United States. This built-in audience gives your business a large built-in stable of potential customers.
Businesses that are very small or sell only a few products may prefer Amazon, as they might not have a lot of products to justify opening a completely separate standalone store. However, large companies sell on Amazon, too.
Shopify vs Amazon: fees
One crucial area to consider when you’re weighing Shopify vs Amazon as your eCommerce platform is the fees that each charges those who list on their site.
Shopify offers three plans:
- Basic Shopify, for $29/month
- Shopify, for $79/month
- Advanced Shopify, for $299/month
All three plans give you access to payments, shipping, and point of sale features, customer support, and a free SSL certificate. But you get more features and capabilities with the more expensive plans. Shopify also offers a Shopify Plus plan for large businesses and enterprises.
Amazon offers two basic plans—Individual and Professional.
- The Individual plan doesn’t have a monthly cost. Instead, you’ll pay $0.99 for each item you sell, plus shipping and variable closing fees.
- The Professional plan costs $39.99 per month and doesn’t require you to pay a per-item-sold fee. You will be subject to a referral fee, though, that is variable based on your product’s category.
Shopify vs Amazon: features
Money isn’t everything, as the saying goes, which is why when you’re weighing Shopify vs Amazon, you’ll want to take a look at the features each provides.
The main differentiating feature of Shopify is the fact that you can have a unique eCommerce store. This benefits your company because it allows you to brand your company and products on Shopify separate from the other sellers on the site.
Besides, there are excellent eCommerce tools built into Shopify that help you promote your store.
These are features that are just not available on Amazon, which lists your products among any others that match search results.
From a selling perspective, Shopify provides many eCommerce tools for all who have a store on their site. These include a powerful inventory system, a logo maker, multi-channel selling options, integration with third-party apps, and abandoned cart recovery, to name a few.
Shopify also allows businesses to accept payments via Visa, Discover, Mastercard, and American Express, as well as 100 other payment gateways, including PayPal and bitcoin. They allow businesses to offer customer accounts on their store to promote repeat shopping, provide marketing and SEO tools, social media integration, and even analytics.
That being said, Amazon comes with the power of being the largest online retailer in the world. Therefore, they deliver a customer base directly to you—without you having to do any work at all related to marketing or customer acquisition.
Another cool feature of Amazon is you can opt for them to handle your product fulfillment, too. With Fulfillment by Amazon, you can ship your inventory to Amazon, and they will handle packing up and shipping out your products when orders come through online. Sure, you’ll pay an extra fee for this, but it will take a considerable part of the eCommerce process entirely off your plate.
Amazon also provides the ability for businesses to sell services rather than just products on their marketplace. This is done through Amazon Home Services and allows non-retail-specific companies to become part of their powerful platform as well.
The platform provides those who list on their site with free analytics tools and reporting, the ability to take advantage of reduced shipping rates that the company has contracted, and the ability to list in more than 40 categories, including some niche ones.
Shopify vs Amazon: you can choose both
When deciding on an eCommerce platform, you ultimately don’t have to choose at all between Shopify vs Amazon. You can, in fact, use both platforms at the same time.
If you map out a plan well enough, integrating both Shopify and Amazon into your overall eCommerce offerings could be a huge benefit to your business.
You could use Shopify as the solution to create your separate online store, where you would list all your products in one place, under your business’ specific branding.
At the same time, you could list your products on Amazon to take advantage of the enormous audience that visits the site each month. It could be a great way to separate yourself from your competition within your product categories.
Ultimately, this could lead to customers finding your Shopify store once they’ve purchased—and loved—your products on Amazon.
eCommerce is the future of retail
There’s no doubt that eCommerce should be a considerable part of any business that sells products today. Which side you land on in the Shopify vs Amazon debate, though, is a very personal choice.
One site is not necessarily better than the other overall, though each has pros and cons that may make one a better fit for one business and the other a better fit for another.
If you’re ready to leap into the world of eCommerce, we invite you to keep reading:
No matter how you approach eCommerce, know that it will come with some associated costs, as do most aspects of running a retail business. That’s just one area where Camino Financial can help.
Our loans make it easy for small businesses to access working capital to invest in their business and help it grow to the next level. We live up to our motto of “No Business Left Behind” by providing excellent financial support to our customers, as well as informational and educational resources.
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