One of the most impactful decisions you’ll make as a business owner is determining which platform to sell your products on. You’ve already narrowed it down to the two most popular e-commerce websites: Shopify or Amazon. But with each offering a unique set of advantages, how do you know which one is a better fit?
Shopify provides the freedom and flexibility for you to create a custom website, while Amazon allows you to open a storefront while leveraging their pre-existing audience (all 197 million of them). They are two very different platforms with one thing in common: They enable you to sell products and make money. Here’s everything you need to know about the two companies so you can make the best choice for your business.
Overview of Shopify
Shopify is a cloud-based e-commerce platform that allows you to build and manage a fully customizable website and storefront for your brand. If you want full control over your branding, Shopify might be an ideal option for you. You’ll have the ability to customize almost every detail, from aesthetic features like colors and fonts to the user experience and how customers interact with your brand.
Shopify offers everything you need to build your brand from start to finish, including tools to create a free logo, over 80 professionally designed layouts, and dozens of helpful resources to help you get started. You also have the option to purchase a custom web address to maintain cohesiveness when it comes to your online presence.
Fun fact: Did you know that big brands like Staples, Gymshark, Heinz and Dressbarn all use Shopify to power their online stores? After upgrading to Shopify Plus, Staples found that they were able to run 4X more online sales promotions per day!
Benefits of Shopify
Shopify is one of the best e-commerce websites on the market for both startups and more established companies alike. Here are a few of the platform’s most notable benefits:
- Gain total control and ownership over your store. Whereas Amazon is an online retailer that allows you to “rent” space and open your storefront, Shopify allows you to build your very own store from scratch.
- Customize your brand. With the ability to personalize your website as you see fit, Shopify makes it much easier to distinguish your brand and stand out from your competitors.
- Ease of use. Setting up and managing your store is simple, even for beginners. From dozens of online courses to an expansive collection of how-to guides, Shopify’s free online resources for small business owners are plentiful.
- More payment options. Shopify offers more payment getaways (at present time there are over 100 available to use) than Amazon, allowing customers ample options when it comes time to check out.
- Dropshipping integrations. If you plan to ship products that you don’t make or fulfill directly, there are hundreds of dropshipping integrations available within the Shopify app.
Drawbacks of Shopify
One of the biggest disadvantages of using Shopify is the lack of an established audience. Unless you hire outside help, you’ll have to do most of your marketing and search engine optimization (SEO) yourself. In other words, you’ll need to put in some serious work to find and build loyal customers. With Amazon, you join the platform with the ability to leverage their preexisting customer base.
Another downside? The price. Though they offer several more affordable options that cater towards those who are just starting out, opting for the Advanced Shopify Plan could cost you up to $299/month (more on that later).
Overview of Amazon
Amazon is a third-party marketplace platform that allows you to build a storefront and sell your products to a widespread audience. It’s ideal for small business owners like yourself who want a greater level of visibility when it comes to their products. With an Amazon merchant account, you’ll be selling your products on their online marketplace along with other sellers. It’s akin to a supermarket: You’ll see thousands of people walk by your storefront daily. They may or may not be looking for what you have to sell, but when they come across your products, they decide to buy them anyway.
Fun fact: Amazon is projected to account for nearly 40% of the U.S. e-commerce market in 2022.
Benefits of Amazon
As the leading online retailer globally, Amazon can be an excellent source of exposure for your products. Here’s what you can expect when selling on Amazon marketplace:
- A pre-existing customer base. Since Amazon has a large ready-made audience for you to leverage, there’s the potential for millions of eyes to see your products.
- Easy set up. Because Amazon does not offer the same type of customization options that Shopify does, it takes less time to set up your store and start selling products.
- Assistance with shipping. Utilize the option to have Amazon assist with handling, fulfillment, packing, and delivery. If you use Amazon’s fulfillment services and meet their criteria, you have the option to offer two-day Prime shipping on your products.
Drawbacks of Amazon
Unlike Shopify, Amazon does not offer a fully customizable experience. While you can add a few elements (like a header and logo) to your storefront to make it your own, you just don’t have the same options when it comes to letting your brand shine through. If you’re in the earlier stages of your startup, this may not be a big deal to you.
Another downside of selling on Amazon is that your products will show up alongside your competitors, making it harder to differentiate yours and requiring more work to rank higher during searches.
Additionally, Amazon does not offer any options for third-party payments. Customers are able to pay using a credit card, debit card, or an Amazon Pay balance.
Shopify vs. Amazon pricing
When it comes to pricing, Shopify and Amazon both have very different structures. Here’s everything you need to know to find the best option for you.
If you’re ready to start selling your products on Shopify, there’s good news: you can sign up for a 14-day free trial to test out all of the platform’s features before committing to a plan. After the two weeks are up, you’ll pick from 1 of 3 pricing plans:
- Basic Plan Includes everything you need to build your store and process payments.
- Shopify Plan Includes all the features of the basic plan plus professional reporting and more staff accounts.
- Advanced Plan Get all the features of the basic and Shopify plan plus custom reporting and low transaction fees.
Note: If you sign up for a year-long commitment, you’ll save 50%. All 3 plans offer customization options, unlimited products, 24/7 customer support, abandoned cart recovery, and a free SSL certificate. There are no setup fees, and you can upgrade or downgrade from a plan at any time.
If none of these work for you, you can also opt for the Shopify Starter plan. For $5 a month, you can sell products through social media, email, or an existing website or blog by embedding a Shopify product link.
Amazon’s pricing structure is pretty straightforward. There are two pricing plans to choose from:
- Individual Selling Plan This plan is ideal for small business owners who plan to sell less than 40 items per month and want to test out their products on the platform.
- Professional Selling Plan This plan is for those looking to sell an unlimited amount of products. It allows you to advertise your products on the platform, use advanced seller tools, and qualify for top placement on product detail pages.
- Referral fees - For every item sold, you’ll pay Amazon a percentage of the total price (including item price, shipping cost, and any gift-wrapping charges) or a minimum amount, whichever is greater.
- Fulfillment fees - These will depend on whether you plan to ship your own products or use Fulfillment by Amazon (FBA) to handle logistics and offer Prime shipping.
If you use FBA, you will pay a fixed fee per unit depending on the size of the package. If you plan to ship your own products, you’ll be charged an additional shipping fee based on the product category and shipping service selected by the customer.
Shopify vs. Amazon: Which is a better choice
When it comes to choosing the better e-commerce platform, there is no clear winner. It will depend on what your business’s needs are. Both Shopify and Amazon are easy for beginners to use, come packaged with a ton of useful features, and offer 24/7 customer support via email, live chat, and phone. As far as customization goes, Shopify takes the cake. With a Shopify store, you’ll be able to choose from dozens of professionally designed themes and personalize almost every aspect of your website. If you want full control and ownership of your store and branding, a Shopify store is likely to be a better fit.
However, Amazon will get your products in front of more customers. If you’re just getting started on your entrepreneurial journey, this platform may work better for you since it requires less work to bring in an audience. Buyers come to Amazon ready to shop.
And of course, there’s no rule against selling on both platforms. It will require a little more effort on your end, but there is a Shopify app that allows you to integrate your Amazon and Shopify stores.
Setting up your Shopify store
Getting started with Shopify is easy. Just pick a plan, customize your storefront, and start adding your products! For a more comprehensive tutorial on what you’ll need to get your store up and running, you can check out VPM’s guide to setting up your Shopify store.
Frequently asked questions about Shopify
- You mentioned dropshipping earlier. What is that? Dropshipping is a fulfillment method that does not require you to physically keep products in-stock. When you sell a product, it is shipped directly from a third-party, who is a wholesaler or manufacturer.
- Will my Shopify business address be public? Yes. The business address associated with your Shopify account will also be listed as your business's designated return address. Therefore, you should only use an address that you feel comfortable with the general public having access to.
- I was planning to use my home address. How can I protect my privacy? There’s a simple solution to protecting your privacy while selling on Shopify. When you sign up for a VPM virtual mailbox, you’ll get a commercial mailing address to use as your dedicated business address on Shopify.
Setting up your Amazon store
Signing up for an Amazon seller account is a little more complicated because of their strict verification process. Once you’ve decided on a plan, here’s what you’ll need to provide before getting started:
- Your name and phone number
- Business email
- Tax information
- Your credit card information
- A bank account to get paid
- Proof of address
Frequently asked questions about Amazon
- What is proof of address? In order to get verified on Amazon, you’ll need to provide proof of address. This can be any document that proves the validity of your business address, including a business license, bank statement, credit card statement, or utility bill. Keep in mind that all your addresses will need to match up in order for it to be accepted.
- I don’t have any of those. Is there a way I can obtain proof of address? Yes. VPM’s TruLease plan takes the stress out of obtaining proof of address. When you sign up, you’ll get a physical business address and valid lease agreement that verifies you operate out of the space. Opt for the utility-bill add on and you’ll have everything you need to open your Amazon store.