In 2020, there are two clear leaders in e-commerce: Amazon and Shopify. If you’re starting up an online store, one of the earliest and biggest decisions you’ll have to make is Amazon vs Shopify as the platform on which your e-commerce empire is built on.
While the platform you use might not make or break your business (quality products and great service are most important), your choice will definitely make a huge difference in how you run your store.
Read on to learn the key differences between each platform, the pros and cons, and what is the best choice for you to start with.
Pros & Cons: Amazon and Shopify
Here’s a summary of the main pros and cons of doing business on Amazon, versus Shopify.
Amazon vs Shopify: The Biggest Differences
The biggest difference between Amazon and Shopify is that Shopify is an end-to-end e-commerce platform, which lets you build and manage an online store from the ground up.
In comparison, Amazon is a marketplace that you can list products on, but you do not have total control over your store or your product pages.
Now let’s break down the differences in a little more detail.
One of the most pronounced differences is in how you can customize your store. If visual identity and branding is important to you, take note.
With Shopify, you can customize just about everything on your site, provided you or someone you hire has the coding ability. Shopify is a hosted CMS (content management system), which means you can manage what’s on your site the same way you would with something like WordPress.
Shopify themes and plugins give you a lot of flexibility with your site, and the code in your theme can even be edited to make it appear exactly how you want it.
In comparison, Amazon product listings have pretty defined templates. You can customize your product copy (as long as it’s within Amazon terms) and images (again, have to fit in Amazon’s TOS).
If you have Brand Registry, you also have access to a few more customization options such as Amazon Storefronts and Enhanced Brand Content. However, there are pretty clear limits to how you can customize your store and product pages.
So while Shopify scores much higher in customization and flexibility, the tables are flipped when it comes to traffic generation. This is the biggest selling point for Amazon, and might be the biggest point to consider when comparing platforms.
When you create a Shopify store, you’re responsible for every single customer you get to your store. There’s no marketplace or discover vehicle for Shopify stores.
Amazon, though, attracts millions of shoppers every day, most with extremely high purchase intent. All these shoppers could potentially find any products you have active and listed on Amazon.
The impact of the visibility you get from having access to Amazon’s customer base cannot be understated. Not having to actively drive traffic to get people to your store takes a lot off your plate, particularly when your business is just starting out.
Built-in fulfillment and shipping channels
As well as bringing customers in, sending products out is a big difference. One of the great features you get when you sell on Amazon is Fulfilled by Amazon – FBA for short. FBA handles just about everything to do with fulfillment, including storage, packing your products and shipping. They can even fulfill orders on multiple channels.
Fulfillment is a huge part of selling online and can hurt your business’ reputation in a big way if it’s not up to par.
Shopify is working on building out its own fulfillment network to rival FBA. However, it will be a while before they have a shipping network of the same standard as Amazon’s. Amazon FBA is trusted, reliable, and able to offer free two-day shipping to most US customers, which is a tough task to beat.
Finally, we should talk about ownership of your store and your customers. With Amazon, you never really have full control over your business. Amazon controls the site, they control all the customers, and you have to play by their rules. If you don’t, you risk having your selling privileges removed, and losing access to Amazon’s customers.
In comparison, while you have more responsibilities on Shopify, you have full ownership over everything. You’re not renting a spot on a marketplace, as you essentially are with Amazon.
Sell on Shopify or Amazon – What do the Pros Say?
There are no shortage of sellers who have operated on both Amazon and Shopify. Here are some opinions we put together from prominent sellers and businesses with experience on both platforms.
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, it’s like, 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 FAQs
How much does Amazon cost?
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.
How much does Shopify cost?
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 and fulfillment, whether you handle this yourself or use the services of a 3pl (third-party logistics) company.
Does Shopify take a percentage of sales?
Shopify charges payment and transaction fees, which end up taking a percentage from your sales.
If you use Shopify Payments, Shopify’s native payment processor, you’ll be charged from 2.4% to 2.9% for credit card payments, plus 30c per transaction.
If you use any other payment providers (Stripe, for example), you’ll be charged from 0.5% to 2% per transaction.
Can I use both?
Yes, you can sell on both Shopify and Amazon. This is a great strategy to take advantage of the positives of Amazon while mitigating the risk of selling exclusively on Amazon.
If you need funding to grow your Amazon and/or Shopify stores, Payability is a multichannel funding solution that can provide you with financing based on all the channels you sell on. Best of all, there are no credit checks, you can get approved in 24 hours and Payability works well alongside the Shopify Capital and Amazon loans you may already have.
Can I link Shopify to Amazon?
Yes, there are many ways to link your Shopify and Amazon stores. See our article on integrating Amazon and Shopify for more.
What other e-commerce platforms can I use?
WooCommerce and Magento are the most popular Shopify alternatives as customizable e-commerce platforms. WooCommerce is a plugin for the WordPress CMS, while Magento is a hosted platform similar to Shopify.
Alternative marketplaces to Amazon are Walmart and eBay, both of which are looking to compete with Amazon’s third-party marketplace.
Amazon vs Shopify: Our Verdict
So, what is it? Should you go all-in on Amazon, or put in the work to build your own Shopify store?
First, I wouldn’t advise putting all your eggs in either basket. Doing so is risky, and missing out on the mutually exclusive benefits of each platform. If you want to grow and you have the resources, it makes sense to incorporate both in your business.
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.
It’s even better if you’re selling with FBA, as they’ll take care of all of the shipping and prep work for you as well.
All this time saved lets you or your employees focus on other tasks that can grow your business, such as keyword research or sourcing new products.
A lot of people claim rising fees on Amazon as a reason to expand to sell on their own site. However, you can end up spending just as much for fewer results, due to the costs of:
– extra staff
– 3pl services for fulfillment
– driving traffic through paid ads
– website maintenance
If you’re a small business, start out on Amazon. As you grow, you should look to start owning more of your business and drive traffic for yourself. A great way to do this is with LandingCube’s growth tools, which help you build an audience and take more control over your sales channels.
Eventually, it’s best to have your own store that you can sell through if anything goes wrong on Amazon. But even when you do have your own store, consider pushing customers to buy on Amazon, as the impact of ranking #1 for high-volume keywords could easily be worth more than slightly better margins on your own site.