Well, this sounds like a "Clash of the Titans" and it sure is. Both Shopify and Amazon are giants in the e-commerce business. Shopify for its dedicated e-commerce performance. And Amazon for being the huge marketplace where thousands of retailers sell.
So, if you are looking for a place to sell your goods online, which one should you choose? Shopify or Amazon? Let us attempt to answer this million-dollar question with a simple analysis.
Table of contents
What are Shopify and Amazon?
- Shopify is a cloud-based e-commerce platform.
- It allows users to build sites for their online stores and sell products there.
- It can handle large online businesses and tons of products. Big brands like Unilever, Tesla & Nestle run their stores online on Shopify.
- Aimed at e-commerce, Shopify fulfills the needs of merchants and customers. Its special e-commerce features and templates account for its efficiency.
- It integrates with hundreds of apps like Oberlo or Printful.
- It supports many payment gateways like Square, Stripe, PayPal, Drupal, etc.
- Shopify streamlines everything from product presentation to its shipping.
- Well-defined, efficient and robust-these are the right words to describe Shopify.
- Amazon is the world's biggest online retailer and e-commerce marketplace. It sells 12 million products.
- Millions of customers access Amazon to buy products. Amazon business has its footprint in most countries. It has dedicated sites for each country. This helps customers shop in their own currency. This makes Amazon a global marketplace and the most visited site as well.
- Its ease-of-use and excellent customer support make it the world's #1 shopping site.
- Amazon has gone the extra mile to serve customers. It has its own monthly subscription service. This Amazon-Prime service has many benefits like free shipping, discounts, etc.
- Amazon is customer-savvy without a doubt. It has caught the pulse of the public by offering enticing offerings. Movies on Amazon Prime and eBooks on Amazon have widened its scope.
- Above all, Amazon even produces consumer electronics. These are Amazon-only products like Kindle, Fire TV, Fire Echo etc. they have added to the sales on Amazon.
- Its milestone achievement has been its foray into AI with its virtual assistant Alexa. With its unique voice-ordering facility, Alexa propels customers to make more purchases online on amazon. In fact, RBC capital’s Mark Mahaney predicts that the revenue sales due to shopping through Alexa would earn Amazon $10 billion by 2020 and $19 billion by 2021.
Amazon vs Shopify-Facts and Figures
- About 1 million businesses are powered by Shopify. The Shopify website and apps have a total of 2 million active users worldwide.
- Statista claims that in September 2019, 150.6 million people in the US accessed the Amazon mobile app in that month.
- Venture Beat states that there are 150 million Amazon Prime users worldwide currently.
- Amazon grabs 45% of the U.S. e-commerce market.
Why do people like to shop on Shopify or Amazon?
Before you start selling your products in a marketplace, you should analyze why people would buy them there. So, let us check out what customers find appealing about Shopify or Amazon.
An endless list of products, a wide variety and range, low prices, free shipping and convenience are the reasons why people like to go Amazon shopping.
But above all, people love Amazon for its shopping experience. 9 out of 10 people will always make their purchase decision only after checking out the prices on Amazon.
Interacting with the brand directly through their online store has many advantages. Customers can earn loyalty points and rewards, get free samples or try out the “site-first” version or flavors. They may get better deals, discounts, freebies, etc. because they buy directly from the vendor's Shopify store rather than through Amazon. And this is why they could prefer Shopify as they can directly interact with the brand and gain better benefits.
Which site should you sell on - Amazon or Shopify?
- If you want to tap a wide customer base, you can readily run towards Amazon. But the catch here is that you will be competing with thousands of sellers and sometimes from Amazon too as it manufactures certain products on its own and sells them on its site.
- One good thing about Amazon is that It allows you to sell almost anything, product or service on its site. It even creates niche markets like Amazon Handmade for unique handcrafted goods, Amazon Fresh for grocery, etc. This allows you to focus your selling to a relevant target audience rather than shooting in the dark.
- If you want your brand to stand out among the rest, you have to surely opt for Shopify. Shopify not only allows you to build your own site for your storefront online but helps you establish your own brand identity.
- Most important to note, Shopify allows you to integrate your Shopify store to Amazon and many other sales channels like eBay, Etsy, etc
While your brand might easily get lost in the Amazon ocean, it can sail steadfast on Shopify and get noticed.
Which is easier to setup - Amazon or Shopify?
Setting up your own Shopify e-commerce site is easy. It has the required themes, templates, tools and all e-commerce features required for easy navigation.
With Amazon, all you have to do is create an account, complete the set-up, add the products and start selling.
When it comes to ease-of-use, both Shopify and Amazon are in for a draw.
Who offers more flexibility in design - Shopify or Amazon?
With Shopify, designing your online store's site is going to be both flexible and functional. You can choose from an array of free or paid themes(costing between $140-$180) from its store. You can customize your site and establish your brand in the e-commerce market.
With Amazon, the site layout is fixed. You can upload your images and descriptions but it will definitely look more Amazon than you! There is no scope for branding here.
Shopify offers not just flexibility in design but the ability to establish your brand on its site.
How effective are the e-commerce tools on Shopify and Amazon?
Shopify was built exclusively for e-commerce. So, obviously, it offers the best e-commerce tools on the market. It has tools to manage everything- orders, inventory, tax calculations, logo designing, abandoned cart recovery, and more. It integrates with popular apps that can help you to do many things like multichannel selling, dropshipping, etc.
Amazon is not too far behind when it comes to e-commerce tools. Using its set of in-built tools, you can create targeted ads, sell globally or to a focused audience. Amazon offers Amazon FBA- Fulfillment By Amazon which is of special benefit to its Prime customers. With FBA, all your storage, packing and shipping of your products are handled conveniently by Amazon.
The range of e-commerce tools that Shopify offers are definitely more than that of Amazon but take a lot of dedicated effort.
How easy is it to attract customers on Shopify or Amazon?
To effectively sell your products online, you’ll need to lure, engage and retain customers. If your online marketplace made this easy for you, wouldn't you be pleased as punch?
Well, that's exactly what you get from Amazon. This oceanic marketplace is where the real action is. Yes, millions of visitors throng the website every month and could potentially notice your product. So instead of you chasing customers, customers are coming to you. Remember, 9 out of 10 customers check out Amazon before finalizing their decision.
The only hitch here is that not only you, but a zillion other sellers will be targeting the same customers including Amazon. So to score here, you must adopt clever tactics like inserting popular keywords in product titles and descriptions, posting high-quality product images and generating good customer reviews.
Your shopify store wouldn’t automatically have a high organic search volume. It would rely on effective SEO implementation to generate traffic. While it utilizes credible SEO features, like AMP to enable quick mobile indexing, it would need you to use smart digital marketing tactics to attract qualified customers to your brand.
On Shopify, you have to generate traffic to your store by yourself, but Amazon amasses the search volume in a big way!
What is the Cost of using the platform?
Knowing your costs upfront can help you streamline your budget and estimate cash flows. Having the facility to pay/receive payment through multiple channels can help you manage your costs better. So, before you select the marketplace you wish to sell on, check out their payment options, transaction fees and credit card charges. Sometimes, you will find that the transaction charges and credit card rates hit the ceiling. Does it occur on Amazon or Shopify?- let us find out.
If you’re selling on Amazon, you have to pay a monthly subscription fee and a selling fee. Selling fee includes referral, closing and shipping fees. Referral fees start from 2% and vary by category. Closing fees depend on the price range of the product. Shipping fees depend on whether you chose to ship by yourself or by Easy Ship handled by Amazon for Prime members. If you opt for a complete package like FBA, then its fees are in addition to the above.
On Shopify, you can use Shopify Payments and avoid any form of transaction fees which might otherwise range from 0.5-2%. If you accept credit cards, then are expected to pay some additional charges. But the best part of using Shopify is it offers over 100 payment channels like PayPal, Square, Stripe, etc.
When you use Amazon Pay, Amazon charges a transaction fee which is levied once the transaction is complete. This includes the processing fees of 1.95% plus taxes. If you use Shopify Payments, there are no set up or monthly charges. All you have to pay is your monthly Shopify subscription amount and the credit card rate.
Shopify supports around 100 different payment gateways with predefined cost or fee structure. Amazon with one unified payment gateway, levies transaction charges as per category of goods sold.
Who makes order fulfillment easy - Fulfillment by Amazon or Fulfillment by Shopify?
Order fulfillment is a challenging task for an online store with many products and high order volumes. It involves managing inventory, processing orders, organizing shipping and handling returns or refunds. For small businesses, you can do this single-handedly. But if you have a flourishing business, you wouldn’t mind a little help from your online marketplace.
Amazon came out with a brilliant idea to support its sellers with order fulfillment. It launched Fulfillment by Amazon-FBA to handle sales logistics. With Amazon FBA, you can store your goods at the Amazon warehouse until an order arrives. On receiving the order, Amazon handles it end-to-end, from packaging, shipping to delivery and returns.
Amazon FBA is more organized and efficient as its fulfillment network is huge. It has 250 million square feet of warehousing space and boasts of 175 fulfillment centers across the globe. Amazon FBA is currently available in the U.S, U.K., Canada,Germany, France, Italy, Japan, China, and India. This is of great advantage to customers as at least one of it is bound to be near their location, enabling swift delivery.
Amazon FBA levies fulfillment fees according to the product's package size. These fulfillment fees include the cost of its pick up, packaging, shipping, customer service and product return management(whenever applicable). In addition, it also charges a monthly inventory fee depending on the space your products occupy at the warehouse.
Amazon FBA is touted as the best option to make your products more visible and competitive in the marketplace. Amazon sellers have an added advantage with its FBA as they can offer COD, Free Shipping and Same-day delivery to their customers. These are attractive options for customers who want to make last-minute purchases.
Amazon claims a 3X increase in sales for its Amazon Sellers who use FBA. The 2014 Amazon Survey revealed that 86% of the FBA sellers reported an increase in sales after they joined the program.
In comparison, “Fulfillment by Shopify” is a recent offering from Shopify and is yet to be fully launched. Its early access is available only to merchants who ship between 10 to 10,000 orders per day. It uses inventory-allocation tools powered by machine-learning and robotics-driven warehouses to improve logistics.
The advantage of using Fulfillment by Shopify could be that you could use your own branded packaging material and shipping labels. These will fortify the brand identity and improve brand value. Fulfillment by Shopify is available only for the U.S. right now
When it comes to order-fulfillment, Amazon FBA makes a clean sweep outwitting the new “Fulfillment by Shopify'' with the sheer size of its network.
How is the customer support on Amazon and Shopify?
Shopify offers excellent customer support through email, phone, live chat etc on a 24x7 basis. Their video tutorials are self-explanatory and help you solve most of the issues by yourself.
Amazon has only a form to fill and offers customer support through a return call.
When it comes to customer support, Shopify leads.
Pricing plans on Shopify and Amazon
To launch your products on your marketplace, you must See if that marketplace is economically viable for you. In other words, is it cutting a hole into your pocket or reaping profits for you? to know this, one must analyze the pricing plans on Amazon and Shopify.
Amazon has 2 pricing plans- Individual and Professional.
- Individual- If you sell less than 40 items a month, and do not want to advertise or use the sales tools, you can opt for this plan at $0.99 per item sold plus additional sales charges.
- Professional- You sell more than 40 items per month, and would like to advertise and use advanced sales tools. You also want to qualify for top placement in the product categories. Then choose this plan at $39.99 per month plus additional sales charges.
The difference between these 2 categories is that with a Professional selling plan, you can create bulk listings, manage inventory, advertise and run promotions like free shipping, etc. You can also use FBA to grow your business, by paying extra.
Shopify has 3 pricing plans-
- Basic Shopify Plan- $29/month
This plan allows you to sell unlimited products on the e-commerce site and its blog. You can integrate with the Shopify POS app. Abandoned cart recovery, manual order creation and discount codes are possible. This plan allows 2 staff accounts and permits multichannel selling
- Shopify Plan- $47/month
All the elements of Basic Shopify Plan hold good here. The difference lies in the staff accounts being 5 and POS extras being allowed. The credit card rates are lowering this plan and gift cards are available. Professional Reporting is offered here.
- Advanced Shopify- $299/month.
This is the best plan for corporate and big brands. It allows 15 user accounts and provides advanced reporting. Third-party shipping and credit rates are lower.
Take a good look at the pricing of both Amazon and Shopify. You will find Amazon perfect for individual sellers and small businesses. But Shopify is just right to handle big brands and more products. It offers better value for money as its basic plan is cheaper than Amazon's Professional plan but offers more takeaway.
Who wins - Shopify or Amazon?
It is not a question of whether Shopify or Amazon win as a marketplace. It is more about you winning by choosing either of them as an online trader or e-commerce entrepreneur.
Amazon has undoubtedly got the best scope being the most visited site with the highest search volume. Handling it is also easy, and so is attracting customers to it. But you cannot stand out easily on Amazon with your brand. Its pricing is more viable for small-scale businesses.
With Shopify, everything is transparent and professional. You get branding, customizability, multichannel integration, top quality SEO tools and integration with many apps and payment channels.
To sum up, if you want to run a small business online, Amazon is perfect for you. If you want to start your online store, create a brand and scale it up, Shopify is the right choice. But remember, you cannot afford to not be on Amazon. So the best way is to have the cake and eat it too. Yes, build your online store on Shopify and list it on Amazon. That way, you can get the best of both worlds.