Amazon vs Shopify Bottom Line: you can build an uber-successful online store with either of these two platforms. For new online sellers, Amazon is the best choice, as it makes traffic generation easier, it requires less work to set up your product pages, and comes with the added advantage of FBA. In comparison, Shopify gives you more ownership over your business, more flexibility, but requires more work to set up and maintain your store.
If you’re looking to build an e-commerce business in 2021, there are two major platforms to consider: Amazon and Shopify.
While there are additional competitors (WooCommerce, Walmart, Magento, eBay) which all have their own merits, Amazon and Shopify come out ahead as the clear winners in e-commerce today.
Read on for the ultimate breakdown of Amazon vs Shopify – the biggest differences, pros and cons, and our verdict on which e-commerce platform is best for you.
Amazon vs Shopify: Biggest Differences
There are a few key differences that define Amazon vs Shopify – such as customization, ownership and traffic generation. Amazon FBA also makes a big difference in what’s needed to run the logistics end of your business.
Let’s look into these differences a little further.
Marketplace vs End-to-End Platform
Even though Amazon and Shopify are generally considered “competitors”, they are two very different platforms.
Amazon is an online marketplace. You can list and sell your products on the marketplace, but in the end, your customers are still buying from Amazon.com.
In comparison, Shopify is an end-to-end, cloud-based platform, which provides the foundation for building and managing online stores. Shopify lets you create your own website, rather than listing and selling on another site, as you do with Amazon.
Customization and flexibility
The biggest difference that comes with a marketplace like Amazon vs Shopify, a website builder, is customization, and the flexibility to do what you want with your site.
Amazon gives you limited options for customizing product listings. They are slowly introducing more options for this, such as Enhanced Brand Content, but at the end of the day, you need to create your product pages within a strict template.
Though you have clearly defined templates to work with on Amazon, the site has a proven track record of converting shoppers into customers (see more about Amazon conversion rates here). It also cuts down the time spent creating your product pages, with less design work necessary.
On the other side of things, Shopify lets you build your site however you like, with nearly 100% flexibility.
Shopify themes and plugins give you a lot of functionality and design options, even if you don’t know how to code. And if you do have programming knowledge (or you hire someone who does), you can customize your Shopify theme to make it exactly as you want it.
While complete freedom is nice to have, it also increases the chance you can get it wrong. A poorly designed store can easily turn customers away and hurt conversions.
On Shopify, you’re responsible for every single customer who comes to your store. Meaning, if you don’t do anything to attract customers, no one will see your site.
In comparison, shoppers can find your products on Amazon, through Amazon’s search engine. If your product pages are optimized for Amazon SEO, you’ll get passive traffic to your products from people already on the Amazon marketplace.
This allows you to run your business in a much more hands-off manner, as you don’t need to constantly manage and optimize traffic generation channels.
Amazon search has become more competitive over the years, so it’s not quite as simple as listing products and getting traffic. But an effective early launch strategy will kick a flywheel effect into action, which doesn’t exist with Shopify.
When you sell on Amazon, you’re essentially operating under the Amazon brand, as much as your own. While this is a negative in a sense, it also means you benefit from the trust their brand has with consumers.
Amazon is a household name in 2021. Shoppers feel confident buying products from Amazon. This level of trust, or “social proof”, helps you get more conversions.
If you sell on your own site, you’re an unknown. Shoppers need to trust you to make a purchase online, and they may not do so if they’ve never heard of your brand. As a result, many customers will feel safer going to Amazon and buying a product there instead.
On Shopify, you fully own your store. While Shopify does have an acceptable use policy, you can generally do what you want with your business. They’re not going to shut you down, unless you break one of these rules.
On the other hand, Amazon can shut you down at any time. Their rules are much more strict, and relate to what you can write on your product listing, how you communicate with customers, and more.
This means you don’t have complete control over your Amazon store, as Amazon controls whether you can sell your products on their marketplace.
You don’t have control over your customers either. Technically, when someone buys from you on Amazon, they’re Amazon’s customer, not yours. You’re not allowed to contact these customers afterwards, making it hard to build a list and utilize email marketing.
fulfillment and shipping channels
Amazon offers a service that handles all the storage, picking and shipping for you, known as FBA (Fulfilled By Amazon).
This takes a lot of tasks off your plate as an online store owner. It also gives you access to Amazon’s proven and efficient shipping network. This is a priority for shoppers today – nearly 80% of Amazon customers say they shop on Amazon because of the free, fast shipping available.
In comparison, when you sell on Shopify, you need to organize most of this for yourself. There are a lot of companies out there who can manage storage and fulfillment for you. However, the process is unlikely to be as streamlined as it is with Amazon FBA.
Shopify does have a new service called Shopify Shipping, which works a lot like FBA. It’s not as reliable and battle-tested as Amazon’s fulfillment network though.
Both Amazon and Shopify require a subscription cost to use the platform. On top of this, there is a referral fee on each sale for Amazon, which can be substantial. Shopify doesn’t charge referral fees, but do charge payment and transaction fees.
Amazon Pricing & Fees:
There are two different selling plans on Amazon, with different levels of pricing.
The individual seller plan charges sellers $0.99 per item sold, plus referral fees ranging from 6-25% depending on category.
The professional seller plan, which almost every serious business will use, costs $39.99 per month, plus the same referral fees based on category.
In addition, if you’re using Amazon FBA, you’ll have to pay fees for storage and fulfillment.
Shopify Pricing & Fees:
After a 14-day free trial, you’ll need to sign up for a paid plan to continue selling with Shopify.
The Basic Shopify plan costs $29 per month, which includes all the basic necessities for running an online store. For larger businesses, the next level up is $79 per month, while the Advanced Shopify plan is $299 per month.
Additional fees on top of the monthly plan include payment processing fees, ranging from 0.5% to 2% for third-party payment providers, and 2.4% to 2.9% for credit card payments with Shopify Payments.
You’ll also need to pay for shipping, storage and fulfillment, whether you handle this yourself or use the services of a 3PL company.
Pros & Cons: Amazon and Shopify
Let’s sum up the pros and cons of selling on Shopify vs Amazon.
✅ Comes with a powerful traffic channel (Amazon search)
✅ Potential for passive traffic & sales
✅ Amazon brand gives your products social proof
✅ FBA offers streamlined, reliable storage and shipping
✅ Proven, conversion-optimized site design
❌ Don’t have full ownership of your store
❌ Hard to build a customer list
❌ Little design flexibility
❌ High fees
✅ Fully customizable stores
✅ Wide variety of themes & plugins available
✅ Full ownership of your store & customers
✅ Flexibility to build a unique brand identity
❌ Have to drive all your own traffic
❌ More work required to maintain your store
❌ Need to use a 3PL company for shipping & fulfillment
❌ Complete customization requires coding, excessive plugins can slow down your site
If you’re more of a visual person, check out the infographic summing up these points below:
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Why Not Both? Selling on Amazon AND Shopify
Do you need to choose one or the other?
Absolutely not. You can sell on both platforms, which is a good way to take the advantages of both Amazon and Shopify, and mitigate the risk of getting banned or suspended by Amazon.
For a new store owner just starting out, it might not be advisable to try and run an Amazon store and drive traffic to a Shopify site at the same time. However, you can launch on Amazon, and at the same time start building your Shopify store, so you eventually have a 2nd sales channel to fall back on.
If you’re using FBA, you can also fulfill orders from your Shopify store from your Amazon inventory, using Multi-Channel Fulfillment.
Shopify vs Amazon – What do the Pros Say?
A lot of businesses operate on Amazon and Shopify. We asked a few business owners with experience on both their opinions on which platform they recommend.
Amazon handles all the order fulfillment, all the customer service, conversion rate optimization… They’ve been running conversion rate optimization now for two decades, they know to a tee how to get someone to buy something. When you sell on Amazon, you get to take advantage of that. Most people who sell on Amazon don’t realize, on a Shopify store the conversion rate is much lower.
You can send the same customer, from the same traffic, and get twice as many sales on Amazon. Shopify is great software, but you basically have to do ten things right at the same time, all of which Amazon does for you. You need to hire a team to manage a Shopify store, and this is a very high cost in time and money, and for most Amazon sellers, there’s really not that much upside to moving to Shopify.Dave Huss, Amazon/Shopify seller & consultant.
Amazon is the number one buying platform, the conversion rate on Amazon is crazy. So if you get on page one for a big whale search term, you’re going to make money.
Amazon’s bringing in such cash flow, I can divert 20% of my attention to trying to get my [Shopify] website up, or I can just launch more products on Amazon. A lot of sellers I know don’t have a website.Tony Brooks, COO of a 7-figure Amazon & Shopify brand, Amazon launch consultant.
Any eCommerce business that’s in it for the long-haul will list their products on both their own website and on Amazon. One helps mitigate the risk of the other. If our shipping fulfillment software fails for a week and we can’t ship from our site, we can still sell on Amazon (and point site visitors there). If we have a delayed shipment to Amazon we can still sell through our site. You get the picture.
Where selling exclusively on Amazon has a big advantage is for eCommerce business that are part-time or side hustles. For smaller ventures it can make a lot of sense to just ship everything to Amazon and let them deal with returns, customer inquiries, website maintenance, and all of the other things that can go wrong. Yes the margins are lower than managing your own site, but it comes at a huge convenience.Calloway Cook of Illuminate Labs.
I would never build a business on a 3rd party platform like Amazon or Walmart, nor would I allow it to become too large a part of my sales. Anytime you build something on a third party, you’re one move away from them wiping out your entire business. Amazon can raise fees, suspend your account, no longer allow a certain product to be sold or gating a category. Amazon and any 3rd party platform should be a single sales channel, but your business shouldn’t be reliant on it.John Frigo of My Supplement Store.
We sell both on Shopify and Amazon. We started selling our Christmas items through our website, advertising on Google etc, then selling on Amazon. Now in the first year or two, our online Shopify site did 80% of the sales. But after our Amazon listings started taking off, more and more of our sales start originating from Amazon. This year 40% of our sales were through Amazon, which is a huge percentage. We now spend more time managing and optimizing Amazon than we do on our own store!Jeff Moriarty, Moriarty’s Gem Art.
Other than the fact that you don’t have much control over the Amazon platform including the customers that buy from you, you can get ‘lost’ on there due to the possibly many product listings and sellers that offer similar kinds of stuff.
Maintaining my own standalone website (using Shopify) gives me a better chance to grow the business thanks to the ability to publish blog posts and build an email list, as apposed to merely selling on Amazon. I haven’t completely abandoned Amazon as it’s still undeniably the biggest platform for eCommerce sellers to reach millions of customers, but my current focus is building and promoting the business beyond their platform, where it’s easier to stand out in this competitive era.Hassan Alnassir, Founder and owner of Premium Joy
I prefer Shopify for established brands who have their own customer base and good organic traction because it is a prettier, more accessible brand interface that allows customers to more easily see and buy more. Shopify also lets you keep all your revenue except a small transaction fee whereas Amazon takes a heftier percentage cut. Amazon is great for brands starting out because it offers its existing audience and is an inexpensive way to start up and get your brand’s name out there.Stacy Caprio, Accelerated Growth Marketing.
Amazon vs Shopify: Our Verdict
So, what’s the final verdict? Should you start your business on Amazon or Shopify?
There’s no “right” answer to this question. Each one has its own advantages, which may be more or less important to different business owners. You can also utilize both, as many online businesses do.
We do have some recommendations, depending what stage your business is at.
For most sellers, Amazon is a better fit. While it’s nice to have total control, as you do on Shopify, most people underestimate how much work Amazon takes off your plate.
Driving traffic full-time is a big task, and you’re unlikely to ever have the same exposure as you do on Amazon. Then there are additional tasks such as:
- Order fulfillment
- Designing product pages
- Managing customer service & returns
- Optimizing site speed & CRO
You can save 2-3 staff at least by selling on Amazon, vs Shopify. This makes it a great choice if you’re a new business owner, perhaps running your business as a solopreneur.
Many cite higher fees on Amazon, but it can come out even in the end when you consider the costs of driving traffic, as well as paying and managing additional staff you need for a Shopify business.
All this being said, it’s not a good idea long-term to sell on Amazon alone. Having all your eggs in one basket is risky, especially a third-party platform like Amazon.
It’s best to branch out eventually and sell on multiple platforms. This gives you full ownership over your business, and allows you to grow further and faster.
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