Shopify vs Amazon Bottom Line: Shopify and Amazon are the two most popular e-commerce platforms today. Both offer a wide range of tools to help you grow your business. Amazon is a great choice for beginners, while Shopify offers a more flexible e-commerce platform, along with full ownership of your online store and customer base.
If you’re looking to start an e-commerce business in 2021, there are two major platforms to consider: Shopify and Amazon.
While there are additional competitors (such as 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 a complete breakdown between Shopify and Amazon – 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 and Shopify – such as customization, ownership and traffic generation. Fulfillment by 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 Site Builder
Though Amazon and Shopify are considered competitors, they are two very different e-commerce 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 e-commerce platform, which lets you create and manage your own e-commerce site. You pay a monthly subscription fee to use Shopify, but retain ownership of your store.
Customization and flexibility
The customization and flexibility options are very different between Shopify and Amazon. A complete ecommerce platform like Shopify offers more extensive options in this area.
This could be a negative to some, but could easily be a positive for a new Amazon seller. Amazon has a proven track record of converting shoppers into buyers, and the clearly defined product page template is a big reason why.
Alternatively, you can use Shopify to completely customize the look and design of your e-commerce webstore.
Shopify themes and plugins give you a lot of functionality and design options, even if you don’t know how to code. You can add apps to capture emails, for cart recovery, live chat, discount codes, and more.
Freedom is nice, and a selling point for many. However, this means it takes longer to start selling, and there’s more that a new business may get wrong when starting out.
On Shopify, you’re responsible for every single customer who comes to your store. That means no one will see your site if you don’t do anything to promote it.
In comparison, shoppers can find your products on Amazon, through Amazon’s search engine. If your product pages are optimized for Amazon SEO, you can get passive traffic to your products from people already on the Amazon marketplace.
This can be a huge advantage, taking away one of the biggest learning curves for a new business – driving traffic.
With an effective launch strategy, you can start selling products organically, making a much larger profit on every item you sell, due to the lack of advertising costs.
As a third-party Amazon seller, you’re operating under the Amazon brand, as much as your own brand.
While some may see that as a negative, it also offers benefits.
Amazon today is a household name. Shoppers feel confident buying products from Amazon. This trust, or social proof, helps you get more conversions and sell more.
If you sell on your own site, you’re an unknown. Shoppers need trust 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 buying a product off Amazon instead.
On Shopify, you fully own your store. While there is an acceptable use policy, which can have your store shut down, you own the site and your customers.
Conversely, as an Amazon seller, Amazon technically owns your store, your product listings and your customers. You just have the right to sell on the marketplace, as long as you adhere to the (sometimes strict) rules.
Third-party sellers can be suspended or limited at any time, and have very limited ways to contact customers, build an email 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).
Fulfillment by Amazon takes a lot of logistical tasks off your plate. It also lets you offer low shipping rates and fast fulfillment, which is a priority for nearly 80% of Amazon customers.
In comparison, when you sell on Shopify, you have to organize and manage fulfillment yourself.
You can choose to hire a third-party logistics company (3PL), or use the new Shopify Shipping feature. However, neither are as effective and battle-tested as fulfillment by Amazon FBA.
Both Shopify and Amazon 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 credit card fees and transaction fees.
Amazon Pricing & Fees:
There are two different selling plans on Amazon, with different levels of pricing.
On the individual seller plan, sellers pay $0.99 per item sold, plus referral fees ranging from 6-25% depending on product category.
The professional seller plan costs $39.99 per month, plus the same referral fees based on category.
If you think you will sell more than 40 items every month, you will want to upgrade to the professional seller plan.
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
Both Amazon and Shopify offer unique advantages as an ecommerce platform, which may be more or less important to different store owners.
Let’s sum up the pros and cons of selling on Shopify vs Amazon.
✅ Comes with a powerful traffic channel and customer base
✅ Potential for passive traffic & sales
✅ Social proof with the Amazon brand
✅ FBA offers streamlined, reliable storage and shipping
✅ Proven conversion-optimized product pages
❌ Don’t have full ownership of your store
❌ Hard to build a customer list
❌ Little design flexibility
❌ High selling fees
✅ Fully customizable online store
✅ App store with a wide variety of themes & plugins
✅ 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 Fulfillment by Amazon, you can also use manual order creation to fulfill orders from Shopify with your Amazon FBA 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 is the best platform to use.
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. An online marketplace like Amazon takes a lot of work off your plate, despite not having full control of your online store.
You can focus less on time-consuming tasks like driving traffic and optimizing traffic channels. This is a big barrier to entry with Shopify. Then there are other tasks to consider when you use Shopify, such as:
- Order fulfillment
- Designing product pages
- Managing customer support & returns
- Optimizing site speed & CRO
You can save 2-3 staff at least by selling on Amazon, compared to Shopify. This makes it a great choice for individual sellers and small businesses.
Amazon does have higher transaction fees, but the overall cost to use Shopify is more than just selling fees – you also need to consider the cost of driving traffic and paying staff, in addition to monthly subscription costs and credit card fees.
That being said, by not owning your online store, as well as strict rules and high competition, Amazon is risky to rely on long-term as your only online presence.
You may get started on Amazon, but it’s a good idea to branch out eventually, and use Shopify to build an online store that’s truly yours.
Amazon is a great selling platform to use for third-party sellers and small businesses. Millions of people around the world go straight to Amazon when they want to buy something online, and the Amazon marketplace makes it easy to tap into that customer base.
While some people don’t like the transaction fees charged with Amazon, the difference in cost for the two platforms is more than just $39.99 per month vs a $29 per month Shopify plan. Driving traffic and managing staff accounts for a large cost with Shopify, so Amazon can actually end up being cheaper.
Ownership and flexibly is definitely a concern long-term, so eventually it makes sense to expand to Shopify, even if you start selling with Amazon. However, if you’re starting out, don’t overthink it – Amazon is a great place to start an e-commerce business.