If you’re at a loss deciding between Shopify vs Amazon FBA, we’ve all been there. Choosing between Shopify and Amazon as a platform isn’t readily easy, but it can totally be if you understand the core differences between both.
In this article, I draw an in-depth comparison between each platform, including the features as well as the pros and cons. So, let’s delve right into it!
To be able to decide on one platform over the other, I’d suggest considering the method of investment that you prefer. Though, optimally, going for both Amazon and Shopify would be the savvy decision, as long as you have the commitment.
If you’re looking for a short-term investment with higher risks and quicker returns, opt for Amazon. However, I’d highly recommend Shopify for a growth type of investment where you create your own brand and develop it until it’s big in the business.
Now that you have a clear idea of the mindset you should have for each eCommerce platform let’s discuss the core points in detail.
It’s important that you understand the concept behind each platform. Think of Shopify as a specialized eCommerce platform and of Amazon as an online marketplace.
So, with Shopify, you’ll have your own brand, build your own business, and manage everything for yourself. On the other hand, Amazon simply enables you to sell products alongside other online sellers, you don’t have to worry about growing a business.
Selling on Amazon is like having a booth at a fair. You get plenty of prospects that need a certain product, but they aren’t here for your brand, they’re just there for the product.
On the other hand, having a Shopify store enables you to have your own space and customers. It’s like renting a store or a building in which you can set up your business.
From this information, it’s clear to see that selling on Amazon vs Shopify can be settled through the question of whether you want to have your own customer base and brand or whether you just want to sell a product to people who need it.
Are you in the business with the mindset of an individual or a company? If you just want to get to selling products and making a profit, you should use Amazon FBA. You don’t have to worry about processing payments or transaction fees.
In fact, all you have to do is choose which products to sell, keep your inventory stocked, and do some marketing for your products. It doesn’t even have to be that extensive as Amazon already guarantees plenty of traffic and exposure.
On the other hand, if you want to be in total control of all your business’ transaction fees, finances, marketing, as well as manage your own selling fees, shipping, and fulfillment, you should use Shopify.
It’s perfect for starting a small business and turning it into a much larger brand, where people seek this particular brand name rather than just any of the products on the market.
Obviously, since they work in different manners, each platform has its own features and methods. So, whose feature set wins: Shopify or Amazon?
How much money you can make online, whether you’re selling on Shopify vs Amazon, has to do with how much traffic you get. It’s not only about that, but it’s also about how much you keep.
Amazon doesn’t give you much room for growth as it considers customers or prospects as their own. If you’re selling on Amazon, you’re just a supplier of a product, not the owner of a brand or a business.
For this reason, Amazon doesn’t give you access to the list of customers that need your products, and consequently leaves no possibility for you to get in contact with those customers for more offers or feedback.
On the contrary, if you’re selling on Shopify, you get a list of people who have bought your products, and thus, you can grow your business with more efficiency and a clear direction. The thing is, to kickstart your business on Shopify, you’ll need a list of prospects to begin with.
This is also the reason you need to manage your own marketing through third-party apps like Facebook, Pinterest, and other social media or networks that can drive traffic to your online store. Something you wouldn’t have to worry about if you’re using Amazon FBA.
Naturally, Shopify beats Amazon FBA when it comes to customizing your profile. Whether it’s through pictures and themes, you get to personalize your environment to create a brand that’s unique and distinctive.
It allows you to create a logo, slogan, business name, QR code, terms and conditions, and even a cloud-based pay stubs on the fly, all of which are unique and customized for your business and your individual brand.
While this is a huge plus if you’re looking to grow an online store, it’s not optimal to worry about branding if you’re selling in bulk, especially with generic products that people don’t usually shop for with individuality in mind.
For Amazon FBA, there aren’t many tools or features. You just send your products to Amazon, which then ships them to customers once they’re sold. You pay Amazon a fee for this service, and everyone’s happy.
However, for Shopify, things go way deeper than that. Shopify actually comes with one of the most in-depth ranges of sales tools on the market in an effort to help you build your brand’s name and a customer base. It offers the following features:
Moreover, Shopify recently teamed up with Oberlo to provide support for dropshipping businesses and facilitate transactions to and from your Shopify store.
Shopify also has an extensive app store that you can use to grow and advance your eCommerce website, expand your reach, and build a stronger base.
For all the freedom Amazon FBA gives you when it comes to managing your shipping, fulfillment, and transaction fees, it’s not quite as flexible in terms of payment. The profit of the products you sell on Amazon is registered biweekly, after deducting selling fees.
On the other hand, Shopify is a lot more flexible and gives you liquidity. Once the transaction is done, you get your profit sent to your online payment processor, like PayPal.
Both Amazon and Shopify work well in attracting customers and getting you selling, but their mechanisms aren’t similar and aim for different results.
With Amazon, you won’t need to worry about your product being seen and exposed, and selling plenty of items is pretty much guaranteed with millions of visitors a month. Basically, Amazon spares you the need to tackle search engine optimization (SEO) or to run email campaigns.
However, you’ll still need to make your own product shine in comparison to the competition on Amazon in order to sell it. In other words, you’ll need to comply with Amazon’s SEO to rank high up in the search results.
Alternatively, Shopify lets you create your own brand. In other words, to sell your product, people actually have to be looking for your business. You’ll need to work on SEO and social media presence, and your business needs a marketing plan.
The good news is, Shopify already comes with plenty of tools that help your business get more popular and provides you with all the tips you need to tackle in order to sell as many items as possible.
There are different payment plans for each platform, but you’ve guessed it, Shopify gives you more options to run your Shopify store.
You can pick the $29 plus 2% transaction fees per month plan for Basic Shopify, $79 plus 1% transaction fees per month for Shopify, or $299 plus 0.5% transaction fees per month for an Advanced Shopify plan.
There’s also a Shopify Lite plan that costs $9 per month and a Plus plan for enterprises, whose costs may vary according to region but is usually around $2000 per month. And you can enjoy free Shopify for 14 days without providing credit card info, just your email address.
On the other hand, Amazon FBA gives you a choice between an Individual Amazon Seller plan, which costs 99 cents per sale plus referral percentages, or a Professional Amazon Seller plan, which costs $39.99 plus referral percentage per month.
Now it’s time to consider the risks of Shopify vs Amazon FBA. With Amazon FBA, there’s a high risk that you might get shut down, and for reasons you don’t even know. What’s more, it has sales tax issues that require a market place facilitator.
These facilitators work on collecting sales taxes on behalf of sellers and giving them to the state, along with names, addresses, and social security numbers of sellers and customers. This is in order for the state to audit transactions.
If you violate the laws unbeknownst to you, there could be some major consequences, including having your business or Amazon seller account shut down.
It’s worth mentioning that you have to factor in margins when you’re considering Amazon FBA. Your gross profit percentage is your revenues minus the cost of goods sold divided by revenue times 100.
Net Profit % = (Revenues – Cost of Goods Sold) / Revenue * 100
And if your gross profit percentage on Amazon isn’t at least 30% per month, you’ll be losing capital instead of making a profit. In other words, you’ve got to make sure your profits surpass the breakeven point where the revenue is equal to the costs.
Shopify, on the other hand, is basically risk-free. If you exclude the risk of having insufficient marketing, that is. This is especially true because if Shopify as a platform was to be shut down, you could move your business to another hosting platform.
Looking beyond just Amazon FBA vs Shopify? There are plenty of options that you could use instead of either platform and still be able to sell your products to those who need them.
If you don’t like Amazon FBA’s selling fees, you could opt for one of three alternatives. Either FMB (Fulfilment by Merchant) where you take full control of handling and shipping your Amazon orders. And if you’ve managed that smoothly, you could opt for SFP (Seller Fulfilled Prime).
Amazon SFP grants you a “Prime” badge beside your products on Amazon, which has proved to be a huge driver of sales. However, your fulfillment service has to be of pristine quality to obtain and maintain that badge.
Finally, you could opt for a 3PL (Third-party logistics) service where your stock is sent to a third-party that’s responsible for storing inventory and fulfilling orders on your behalf.
If you don’t want to use Shopify and would rather get your store hosted elsewhere, there are plenty of other great options.
For starters, you could opt for BigCommerce as they don’t have any transaction fees beyond the ones from the processor directly. They also allow you to have unlimited staff accounts instead of limiting you to 15 as Shopify does. However, it doesn’t have an abandoned cart recovery tool.
You could also opt for 3dcart, which comes with plenty of built-in features, connects with over 100 payment processors, and doesn’t charge an integration fee. Not to mention, its Startup Store plan is only $19, which is considerably more affordable than Shopify’s Basic plan.
However, 3dcart requires you to edit the themes with HTML or CSS, which adds another task to the list of the things you have to take care of while starting and running an online store. This makes it much more complicated to get started with than it is with Shopify.
Finally, you could opt for WooCommerce, like 30% of online stores. It’s an open-source solution that allows you to edit the source code and customize your site to an extent that beats Shopify’s options.
But since it’s a WordPress plug-in, first and foremost, you’d have to already have a WordPress website to use it.
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Yes. You can dropship on Amazon through the FBA program. The products you buy are shipped to Amazon, where they carry the inventory and ship directly to your customers.
As a matter of fact, you should make use of drop shipping from Amazon as it has one of the fastest shipping times on the market, which means your customers will be getting their products sooner and you’ll be able to achieve customer delight.
Yes, definitely. You can use Amazon FBA to store your inventory at and fulfill orders from an Amazon fulfillment center. However, in order to do that, you must already have an Amazon Seller Central account.
What’s more, it’s only possible if your currency and location are respectively set to the American dollar, USA or Canadian dollar, Canada. Otherwise, you’ll need third-party app integration with Amazon for FBA.
When all is said and done, if you’re not sure whether to use Shopify or Amazon FBA, go for both.
You could use Amazon to sell your products for a quick profit that you can then utilize to grow your personal brand on Shopify. If your personal brand gets popular enough, you could ditch Amazon FBA and focus on it. Otherwise, you’ll still be making a profit to salvage any sunk costs.
And who knows, maybe both will bloom well, with enough commitment and good marketing strategies, and you could end up using both Amazon and Shopify together.
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