As a digital business owner, one of your most important decisions is deciding which ecommerce platforms you should use to sell your goods online—and, as two of the biggest names in ecommerce, it’s likely that you’ll end up deciding between Shopify vs. Amazon.
Before we get into a detailed comparison of Shopify vs. Amazon, let’s get clear on the real difference between these platforms: Shopify is a top-to-bottom ecommerce store platform on which users can build, customize, and fully manage their unique, standalone online stores. On the other hand, Amazon is a marketplace that aggregates sellers from around the globe—so you’ll be given a platform within the Amazon marketplace on which you can sell your goods, but you won’t have nearly as much control over its branding, management, customer relationships, and fulfillment process as you would with Shopify.
In this review, we’ll review both platform’s major features, pricing, and both of their pros and cons. We’ll also hear from small business owners and small business experts about which of these platforms they recommend using. That way, you can come to a better-informed decision about whether Shopify vs. Amazon (or both) is the right digital home for your products.
An Overview of Shopify
Shopify is a powerful cloud-based ecommerce store platform that enables online retailers to easily build and manage standalone digital stores. Shopify is scalable, too: companies as big as Kylie Cosmetics, Tesla, Budweiser, and Nestle all use Shopify to power their online stores, but the platform’s basic service plans are equally suitable for single-person operations.
Users can choose from over 70 professionally designed templates that they can customize however they see fit, and they’ll accept payments online through Shopify Payments, the platform’s built-in payment processor that’s powered by Stripe. Then, you can take advantage of Shopify’s huge amount of store- and customer-management features, like social media integration, discounts and gift cards, secure customer information storage, connection with fulfillment centers (including Amazon), and so much more. And if Shopify doesn’t provide the solution you’re looking for, you can likely find it on the Shopify App Store, which aggregates thousands of apps that are compatible with your Shopify store and which can help you further streamline your processes. Also, if you need to sell your products in person in addition to online, you can use Shopify POS, the platform’s range of physical point-of-sale hardware.
Shopify offers three plans, which increase in monthly fees, features and capabilities, as well as discounts on Shopify Payments and Shopify Shipping. Some features that all of these services share, however, are an endlessly customizable online store, unlimited products, 24/7 customer support, the ability to sell on other online marketplaces and social media channels, manual order creation, discount codes, a free SSL certificate, and abandoned cart recovery. All plans also have access to Shopify Payments, Shopify Shipping, and Shopify Point of Sale, though again with varying discounts and capabilities.
- Basic Shopify: $29 per month
- Shopify: $79 per month
- Advanced Shopify: $299 per month
Alternatively, enterprises and businesses handling large order volumes can opt for Shopify Plus, which charges customized pricing. And at the other end of the spectrum, the smallest of small businesses selling on Shopify, like hobbyists and side hustlers, can sign up for Shopify Lite. For $9 a month, this plan lets you sell on social media, in person with Shopify’s point of sale app, or on your existing website or blog by embedding a Shopify Buy Button.
An Overview of Amazon
As you probably know, Amazon is the largest online retailer in the world; so if you sell your products on Amazon (or if you sell your services through Amazon Home Services), you’re given automatic access to a customer base made up of millions of people around the globe. For that reason, selling on Amazon is incredibly useful for new or very small businesses that don’t yet have enough inventory to create a standalone online store to build up a customer base. But Amazon is equally valuable for established online businesses as a supplementary revenue stream, and to redirect a new contingent of customers back to their dedicated online stores.
Although it can take time to get the hang of selling on Amazon—and you’ll need to make sure you’re aligned with Amazon’s rules and regulations—setting up your seller profile and listing your products is relatively straightforward. As a major bonus, you can take advantage of Fulfillment by Amazon (FBA), so Amazon will store your inventory for you then handle packaging and shipping when your orders come through. (If you’re only selling a few products, though, you can choose to handle fulfillment yourself.) You can take a look at our comprehensive guide to selling on Amazon for a step-by-step look at becoming an Amazon seller.
If you want to start selling on Amazon, you’ll first choose between Amazon’s two service plans: Individual or Professional.
The Individual plan works best for small business owners who plan to sell under 40 items per month. This plan doesn’t require a monthly subscription fee, but you’ll need to pay $0.99 per sold item, plus Amazon’s additional selling fees, like variable closing fees and shipping fees.
The Professional plan costs $39.99 per month. You won’t need to pay per-item selling fees with this plan, but you will need to pay a referral fee that varies according to the item’s category, as well as variable closing fees and shipping fees.
On top of your selling fees and monthly subscription (if you have a Professional plan), you’ll also need to pay Fulfillment by Amazon (FBA) fees if you’re using the service for order fulfillment and/or inventory storage. Amazon’s costs can become a bit confusing to track and calculate, so you can take a look at the Amazon Fee Schedule for a more detailed breakdown.
What Do Small Business Owners Say About Shopify vs. Amazon?
When we asked small business owners and SMB experts their opinions about Shopify vs. Amazon, the majority actually recommended using both platforms. You can use Shopify to build your standalone online store, which is vital for branding, customer relationship management, and generally having control over how you choose to sell and market your products. At the same time, you can use your Amazon profile as a valuable sales channel, and a means of driving traffic back to your Shopify store.
Here’s what just a few small business owners had to say:
“Shopify and Amazon are both great platforms for ecommerce, and they’re not mutually exclusive. For companies selling products, Amazon is nearly essential due to the volume of traffic that it offers. Shopify is a great complement to Amazon; there are even apps within Shopify to directly link the inventory of the two. For instance, if you use Fulfillment by Amazon, you can use your Amazon inventory to fulfill orders from both Amazon and Shopify (this is called Amazon MultiChannel Fulfillment).
Plus, Shopify provides a valid web presence, which boosts the trust of Amazon shoppers who are searching for your site. Lastly, there are limitations within Amazon as to how much information you can provide about your product and brand. On the other hand, Shopify allows you to fully display your product information, and your store will certainly help with branding.”
—Laura Douglas, ecommerce and Amazon specialist, FountainheadME
“Ideally, an effective ecommerce campaign should have an official website, hosted with a service like Shopify or WordPress, and a strong presence on platforms like Amazon. Combining these tactics will allow you to reach out to a wider audience and rank across more high volume, relevant searches, leading to increased conversions. Having a primary ecommerce website allows you to rank for organic search results and utilize onsite tools and customization that can’t be found on platforms like Amazon. The main advantage of Amazon is the ability to reach out to a massive audience—Amazon accounts for the majority of ecommerce sales, and can be a viable gateway to future sales on your main site.”
—Matt Benevento, senior SEO specialist, Geek Powered Studios
“Amazon and Shopify are two different platforms that serve different purposes. Selling on Amazon is appealing because your products can get immediate exposure to Amazon’s massive existing customer base—many buyers go directly to Amazon when they want to buy something due to Amazon’s established reputation.
Selling with a Shopify-powered website is not going to give your product instant exposure. Regardless of whether you use Shopify or any other ecommerce platform to power your own site, you’ll have to work to get traffic to the site and to establish your brand’s reputation.
Selling on Amazon is a great option because you can start to make money quickly, but you’ll have to pay fees to Amazon, and you’ll also be subject to all of the rules and policies that go along with selling on Amazon (and they can change quickly). Having your own ecommerce site gives you much more control and you won’t have to share the revenue with Amazon, but it’s more of a long-term project that will take time and effort.”
—Marc Andre, founder, VitalDollar.com
“It’s best to sell on both platforms but prioritizing one over the other depends on the small business’ skills and competition.
Amazon is a great marketplace to start on for a small business owner that doesn’t have their own customer base or a good idea of their target customer. This is because more than 50% of Americans have an Amazon Prime membership, so customers are already on Amazon shopping for your product. However, if you have a lot of competitors and the Amazon market is saturated—you can have a tough time due to higher advertising costs compared to other platforms. One example of a tough competitive market on Amazon are health supplements.
However, if you’re just starting out and the market isn’t competitive, you can use your Amazon sales to build out your Shopify. Many Amazon businesses diversify onto other platforms like Shopify, Walmart, and Groupon. If you’re a new business that launches on Amazon, you can use your Amazon sales to grow your brand and send traffic to your Shopify. You can also use your Amazon customer data to build your target customer profile. One of my clients discovered that a good portion of his sales came from young moms in Texas.
At the same time, if you’re a small business who already has a dedicated customer base and customer profile, you could easily build your own Shopify and traffic.”
—Youn Jung Chung, founder, Dal Enterprises
Shopify vs. Amazon: Weighing the Pros and Cons
With SMBs’ advice in mind, you’ll still need to weigh the pros and cons of Shopify vs. Amazon to decide whether establishing a digital presence on either or both of these platforms is truly doable for your business.
Jessica Thiele, the Director of Marketing at VL OMNI, helps break down the major considerations involved in that decision:
“If you’re a merchant looking to onboard a new sales channel (or perhaps your first digital sales channel) and you’re caught between deciding between Amazon and Shopify, take a beat to first think about your growth strategy. There are some very important strategic differences for your business between Amazon or Shopify.
Most important is channel ownership. With Amazon, you don’t own the platform you’re selling on. The trade-off is access to the Amazon brand and the recognition the platform has internationally, and access to worldwide customers that already trust the Amazon brand. But tethering your business to a single digital marketplace comes with risks. Recently, Amazon ousted a number of merchants without warning, forcing many merchants to grapple with the fallout of their single-channel strategy. There are other detractors to Amazon that should also be weighed carefully, but the ultimate takeaway to merchants is this: Amazon is out to build their own bottom line, and if your business no longer factors into their plan, you may find yourself without access to this prime channel anymore.
With Shopify or Shopify Plus, merchants own their channel and the property they sell through. There are challenges to this approach as well, but they mostly center on driving traffic to your site (provided your products are what people want to buy). It will take more time and investment to build your audience, but the trade-off here is that this channel is yours. Shopify never removes sellers from their ecommerce platform without very good reason (like repeated copyright infringement, which requires multiple filed complaints and review by Shopify before removal). Once you build your traffic and sales, it’s all yours.
Merchants should also explore the fee structures of the two platforms. In general, Amazon’s monthly fees are dependent on the level of the platform you participate in, plus a fee per item sale. Shopify similarly charges a monthly fee that is also dependent on the level of the platform you participate in and charges a small fee per transaction, but savvy merchants can create efficiencies and savings around some of these elements.”
Is Shopify vs. Amazon Right for Your Business?
All told, there are obvious advantages and disadvantages to both Shopify and Amazon.
If you decide to sell through Amazon, then you can leverage the platform’s huge, existing Amazon audience without needing to take on much small business marketing yourself. Plus, Amazon can handle a lot of back-end heavy lifting, like storing your inventory and fulfilling and shipping orders. It’s also easy to set up an Amazon page, and thanks to that massive traffic, you can start selling your products quickly. On the downside, Amazon’s fees are difficult to track, and they can add up quickly. You’ll also need to abide by Amazon’s selling policies, which include restrictions on selling certain items.
With Shopify, you have full ownership over your online store, including its branding, layout, and customer experience. Their fees are transparent, too, and setting up and customizing your store is simple and intuitive. But to reap the benefits of your store, you’ll need to dedicate time and effort to manage all aspects of your store, including the fulfillment process and customer service. You’ll also need to build and drive traffic through your own marketing efforts, though you won’t need to compete with Amazon’s saturated ecosystem by lowering your prices more than you’re comfortable with.
Ultimately, you may want to take the advice of the small business owners we spoke to and use both Shopify and Amazon to diversify and optimize your selling potential. As Laura Douglas says, “building a digital presence is best performed by strategically placing your products in a variety of online channels. Utilizing both Shopify and Amazon will provide you with a great start.”