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Are you one of the many new or veteran sellers looking to go digital? Perhaps you’ve already made your decision but still want to read up on a few informed opinions? Allow us to save you a good chunk of time by narrowing your options down to two of the best online e-commerce platforms in 2021: Shopify and Amazon.

Few marketplaces can hold a candle to these two giants—you don’t have to take our word for it. According to Shopify’s Q1 2020 Financial Results, the e-commerce company powers more than a million merchants across 175 countries including big names like PepsiCo, Gymshark, Staples, and more. 

On the other side of the coin, Amazon boasts around 9.5 million sellers worldwide and welcomes 2.5 billion visitors each month. Ever since the introduction of its FBA (Fulfillment by Amazon) service back in 2006, the e-commerce platform saw an even greater rise in both popularity and seller subscription count. 

So, in the Shopify vs. Amazon FBA debate, who comes out on top? In our opinion, we think Amazon is the superior e-commerce platform for sellers based on several factors. In this blog, we’re going to go over these factors and compare the features as well as the pros and cons of both platforms to maximize your chances of success!

Amazon vs Shopify – What’s the Difference?

Both Amazon and Shopify enable users to make money by selling products, both platforms require a subscription fee before they let sellers leverage their respective tools and resources, and both platforms also allow sellers to customize their brand to varying degrees. What makes them so different?

The core differentiation factor is that Amazon is classified as an online marketplace whereas Shopify comes under the heading of a specialized e-commerce platform. Amazon is akin to a large ‘mall’ that lets you open shop on any one of its floors whereas Shopify focuses on providing merchants with the tools necessary to build a ‘shop’ from the ground up. 

Chances are you’ve probably made a judgment call in favor of Amazon. After all, unlike Shopify, there’s no need to build a shop from scratch. The millions of visitors entering this ‘mall’ each day would surely guarantee sales? Well, it’s not that simple.

While Amazon does in fact provide sellers with much-needed visibility, it comes at a cost, or several costs rather. Sellers must pay a percentage-based product and referral fee on every sale. Also, there are fixed rules sellers must adhere to but more on that later. 

On the other hand, Shopify lets you create your own brand image which means that any visitors coming to your storefront won’t arrive by accident—they’ll most likely visit because they wish to make a purchase. The trade-off, however, is that you’re solely responsible for bringing people to your storefront via costly marketing campaigns.

In a nutshell, the choice between Amazon vs Shopify is heavily influenced by sellers’ needs. Large sellers or those wanting greater control over design and brand imagery might be more inclined towards Shopify. Amazon will appear more attractive to small or medium-sized sellers that don’t want to deal with the hassle that comes with handling the minutiae of marketing and logistics. 

Now, let’s go over the Pros and Cons of Shopify and Amazon.

Selling on Shopify: Pros and Cons

We’ve discussed some of the business place dynamics of selling on Amazon vs. eBay in another blog. A dominant theme of that topic revolved around the buyer and seller-centric nature of both platforms. Shopify, however, is wholly unique in that regard. There are no sellers to compete against—the platform is all about creating a quality web store in a way that is simple, user-friendly, and intuitive to even the most basic users. 

Remember, while there isn’t a steep learning curve, knowing how to bring traffic to your website is a prerequisite to success. That being said, we’ve compiled a list of pros and cons some of which we’ll be revisiting and explaining in greater detail later in the blog.

Pros: 

  • Intuitive functionality that favors newcomers
  • A multitude of app integrations
  • Around the clock customer support
  • Great sales features
  • Quality customer support
  • Multiple pricing options
  • Suitable to both small and large-scale sellers
  • Numerous app integrations
  • Mobile-friendly app
  • Fast loading times
  • Flexible and easy to design
  • Guarantees security and reliability
  • Provides value for money
  • Wide variety of website and sales features
  • Multi-language email support
  • Quality seller support
  • Ability to create a unique brand
  • Develop deeper customer-seller relationships

Cons:

  • No marketing app/extensions
  • Can only sell from certain countries
  • Third-party payments incur transaction fees
  • Phone support unavailable in certain regions
  • The Basic plan doesn’t offer a complete online store
  • The Basic plan also lacks the professional reporting feature
  • Adding customizations is both costly and difficult
  • Unable to determine or control aspect ratio for images
  • 3 option limit imposed per product
  • Expensive premium plan

Selling via Amazon FBA: Pros and Cons

Although Shopify is more user-friendly, it won’t take long—even for sellers with zero technical ability or experience—to understand Amazon’s seller central interface. Users may have to search up a guide or watch an instructional video on YouTube to tackle the more tricky parts of listing creation like adding images and back-end search terms. 

That being said, there’s a world of difference when it comes to ease of selling. Not only are sellers presented with ample opportunities to rake in traffic but the FBA model also takes over most of the marketing, logistics, and customer support concerns. The following are a few pros and cons of Amazon FBA that you should know about.

Pros:

  • Access to high traffic volume
  • Easy to set up and operate
  • Amazon takes care of packing and shipping
  • The Individual plan is economical for small sellers
  • Potential customers right at your doorstep
  • Easy to scale
  • Inventory storage included
  • Ability to easily switch to FBM if needed
  • Advertisement methods are relatively cheap
  • Multi-channel fulfillment
  • Sign up for Amazon Prime
  • Possibility to win and retain buy box 
  • Amazon favors FBA users over FBM

Cons:

  • High competition in most niches 
  • Limited design/layout options
  • Amazon actively favors customers over sellers
  • Difficult to stand out
  • Need to enroll for Brand Registry to access A+ content
  • Budgeting may prove difficult for the uninitiated
  • Return and refund demands may place a financial strain
  • Customer support is lackluster at times
  • Limited payment options
  • Referral fees may be high in certain niches e.g. books and electronics

Let’s now compare two vital factors from the pros and cons listed above to see which platform comes out on top.

Shopify vs Amazon FBA: Pricing and Fees

When deciding between two subscription plans, it’s no surprise that a monthly or package-based fee is the first thing that springs to mind. Not least because you want to determine what amount will siphon off your bank balance each month but also the fact that new sellers are constrained by set—and often times lesser—budgets.

The bottom line is the most crucial aspect when determining viability. Shopify offers sellers the choice of three pricing plan options. These range from $29 to $299/mo. plus transaction fees incurred on each sale. Shopify lets users try out one of the following plans for a free 14-day period. 

  • Basic Shopify: Starts off $29 a month. Features include unlimited product listings, discount codes, abandoned cart recovery, a blog and an online store, 2 staff accounts, an SSL certificate, third-party POS, and more. The transaction fee is 2% on each sale carried out without Shopify payment and also any credit card fees. Users can avail up to 64% discounts on shipping.
  • Shopify: Priced at $79 a month. Package features include everything that comes with the Basic plan and 5 total staff accounts, professional reports, register shifts, gift card options, and more. The transaction fee is set at 1% on sales carried out without Shopify payment with the addition of credit card fees. The shipping discounts can go up to 72%.
  • Advanced Shopify: Set at $299 a month. Features provided in this package include everything that comes with the Shopify plan, 15 total staff accounts, the ability to calculate third-party shipping rates, and also an advanced report builder. The transaction fee is set at 5% with the same credit card fees as the above plans. The upper-limit for shipping discounts is 74%.

Shopify also lets sellers create a custom-designed solution should the Advanced Shopify plan not meet their needs called Shopify Plus

Pricing plans for Amazon seller central accounts include the Individual Plan and the Professional Plan.

  • Individual Plan: $0.99/mo. on every sale plus a percentage-based referral fee. This plan is ideal for small-scale sellers that are new to the platform. Features include the ability to fill up the Amazon catalog and avail FBA services as well.
  • Professional Plan: $39.99/mo. and also a percentage-based referral fee for each sale. Features include the ability to sell nationwide, set up special promotions, access custom shipping rates, reporting tools, bulk listings, and sponsored ads.

Tools and Features

Both Amazon and Shopify classify user-friendliness and convenience as major concerns. This is evident from the basic layout and the availability of seller tools and features that make life easier. A wide range of products can be sold on Amazon including everything from baby toys all the way to complex electronics. Users can even offer services instead of physical goods.

Out of all the tools and support features Amazon extends to its users, none offer more utility than its FBA services. Sellers can sit back and relax while Amazon takes care of the packing, shipping, and storage and also provides increased visibility and traffic by targeting Amazon Prime customers.

When it comes to seller comfort, Shopify isn’t that far behind. It offers an immense range of features and sales tools that are crucial to sell and grow any retail business. Some of these include:

  • Storefront sign maker
  • Profit margin calculator
  • Exchange marketplace
  • Logo maker
  • Online video maker
  • QR code generator
  • Business loan calculator
  • CPM calculator
  • Image resizer

What’s more, Shopify’s acquisition of Oberlo allows sellers to also engage in dropshipping. Overall, Shopify offers a wider range of features which—according to some sellers—might still not be enough to outweigh the benefits of FBA. 

Can You Use Amazon FBA With Shopify?

Definitely. Both platforms have unique features that complement each other quite well. By combining the two, you’re not only mitigating the risk of failure but also adding depth to your overall selling strategy.  

Shopify lets you integrate Amazon with your Shopify store. By doing so, you’re able to maintain your e-commerce presence and sell your products on one of the largest global marketplaces with a few clicks of the button. Once you subscribe to this feature, you’ll be able to create listings on Amazon from your Shopify store and also synchronize product details and inventory to gain unprecedented levels of exposure, ultimately boosting sales and expanding your customer base. 

To do so, sellers need to sign up for an Amazon seller central account first and then proceed to integrate the Amazon Sales Channel to their Shopify Store. However, there is a caveat: you’ll need to subscribe to the $39.99/mo. professional plan in addition to your monthly Shopify subscription plan. 

Such a strategy opens the door to numerous possibilities but should ideally be employed once you’re ready to bear all the costs involved. 

Shopify vs Related Marketplaces – A Review

Up till now, we’ve established that Shopify can hold its own vs. a behemoth like Amazon but how does it compare with other related marketplaces? Let’s take a look.

  • Shopify vs. Etsy

Before transitioning into a multifaceted e-commerce marketplace, Etsy was solely dedicated to handmade crafts. It shares many similarities with Shopify like inventory management and online sales. However, if we’re strictly talking about features then Shopify takes the cake due to its robust reporting capabilities and multiple sales channels allowing for the formation of more complex business strategies. 

In terms of quality of support and pricing, Etsy edges past Shopify due to a simpler and easier to learn interface. It also features 3 subscription plans like Shopify but at considerably lower rates. However, Etsy’s simplicity is also its drawback; Shopify users have a greater arsenal of app integrations that can amplify the effectiveness of selling strategies, something that Etsy lacks.

To conclude, if you want to go big, go for Shopify. If you want to conduct small business online or maybe focus more on arts and craft products then Etsy will be right down your alley.

  • Shopify vs. Squarespace

In the Shopify vs. Squarespace debate, there are no losers. Both have proven to be excellent platforms for building a website. The main differentiating factor lies in the philosophies both choose to follow. Squarespace is focused more on building beautiful websites whereas Shopify places greater emphasis on the e-commerce engine powering its websites. 

Shopify isn’t too far off when it comes to customizability and design. It lets users pick and select from 10 free templates and by paying an extra $140-180 to access more than 50 premium templates. There’s also a vast array of themes suited for all types of industries such as clothing, cosmetics, sports, electrical gadgets, and more. However, in this aspect, Squarespace is in a league of its own. 

Aside from everything Shopify offers in terms of design, Squarespace also caters to clients from the creative industry. Users can add a more personalized touch to their websites by creating beautiful, static pages thanks to Squarespace’s page editors. Based on design optionality alone, Squarespace is the superior platform. Overall, Shopify wins by a large margin considering the breadth of features it offers and how holistic it proves to be as a platform for building online stores.

  • Shopify vs. WooCommerce

In a popularity contest, Shopify wins but popularity isn’t the sole or even the most important metric of judging between two e-commerce platforms. Shopify and WooCommerce take two drastically different approaches to managing and creating a store. WooCommerce is essentially self-hosted. This means sellers get to store all of their files on their own server and access and modify these files whenever they like.

Shopify is hosted i.e. the store, software, and everything in between is managed by them and not the user. While this does leave room for flexibility, changes can be made only to a certain degree. Although this may seem like a clear win for WooCommerce, you’ll definitely need to possess some coding knowledge or hire a coder to build your online store. 

There are few—if any—e-commerce platforms that can provide the same level of scalability as WooCommerce. Plus, it’s excellent value for money. You can download and install it for free and most of the extensions are reasonably priced. Sure, it’s not as holistic as Amazon FBA or Shopify but if you’re willing to put in the extra work you can end up creating a dream store.

In the end, it’s most certainly a tradeoff between customizability and convenience so choose wisely. 

Shopify vs Amazon FBA: Frequently Asked Questions 

As we’re looking to wrap things up, let’s go over some of the most commonly asked questions related to Shopify and Amazon FBA.

Is Shopify better than Amazon FBA?

It depends on what type of seller you are. If you're not really into marketing and logistics then Amazon FBA is the way to go. If you've already got a plan for bringing in traffic to your website and want greater control over your storefront then Shopify makes more sense. There's also the option to integrate Amazon with Shopify for greater effect.

Is Amazon FBA better than dropshipping?

Amazon FBA is more suited for sellers with a healthy chunk of capital in hand who also wish to leverage the benefits of a giant retailer like Amazon. Dropshipping, on the other hand, is more suited to risk-averse sellers with less capital and even lesser patience for brand building and marketing-related tasks.

Is FBA on Amazon worth it?

Definitely! 

Availing Amazon’s FBA service lets you conduct online selling from the comfort of your own home. For a nominal fee, it takes care of packing, shipping, and customer-related concerns which lets you focus on optimizing your product listing and fine-tuning marketing and advertising efforts.

Is Shopify good for beginners? 

Shopify is a cost-effective e-commerce platform that lets sellers build attractive websites from which they can promote, sell, and ship their products. The cloud-based solution features an easy-to-use interface that requires almost zero-technical ability to use. Starting from just $29/mo. you can begin your online selling journey today!

Final Thoughts: Which Platform Wins?

And with that we wrap up our Shopify vs. Amazon FBA comparison for 2021. We’ve listed the strengths and weaknesses of both platforms, discussed some of their features in greater depth, and also gone over some of Shopify’s more popular competitors. To summarize, you should go for Amazon FBA if:

  • You don’t have an existing customer base and are interested in bringing in traffic to scale your business
  • You don’t mind paying referral fees for Amazon to market and advertise products on your behalf
  • You are confident in your products and believe you’ll perform well against the competition
  • You want a ‘ready-made’ platform and want to hit the ground running

Shopify would make more sense if:

  • You can shoulder the task of building an online store from the ground up
  • You already have an existing customer base who you can rely on to generate sales in the first few weeks/months
  • You aren’t keen on competing with others
  • You want flexibility and complete control over your store and products.

So which option suits you best? If you've chosen Amazon FBA, let us share our secret research launch checklist that will give you a strong head start on your e-commerce selling journey. Best of luck!

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