Shopify vs. Amazon: Which Is Best for Your Business and Why

With the changing times and advancements in technology, opportunities to make money have never been more.

We're here to guide you through this process and equip you with everything you need to know. In today's article, we will look at Shopify vs. Amazon.

We'll look at both platforms in detail and then compare them side by side. This will give you enough information to make the best decision.

However, remember that these are just selling platforms. Therefore, you have to first get a product that resonates with you and that you are passionate about.

Once you have your product locked in and you're coming from a place of passion, you'll be able to make the best decision on which platform to use.

Let's get started.

How Do You Sell on Amazon?

Have you heard of Amazon FBA? FBA stands for Fulfillment By Amazon. This Amazon service allows sellers to get their products to their customers conveniently.

The best part about using Amazon FBA is that you don't have to be 100% involved in the day-to-day running of the business.

Amazon FBA will handle the storage of your products, shipping to the customers, and customer support. Once you find a good product and close a manufacturer you trust, you can have the products shipped directly to Amazon's warehouses.

This saves you the trouble of handling that process yourself. Amazon will then automatically fulfill all the orders your customers make. Imagine that. You won't have boxes piled up in your living room or have to worry about meeting your customers' orders on time.

So, how do you get started with Amazon FBA?

Getting Started with Amazon FBA

The first step is to set up your Amazon seller account. Once this is done, you're already on your way to getting your online business off the ground.

Amazon Seller Central is a dashboard that allows you to manage and list all your products on this online marketplace. On this platform, you can add more products, manage your inventory, and much more.

You can think of Amazon Seller Central as your own mission control. This is where you'll be running your Amazon business from.

Now that your Amazon seller account is up and running and Amazon has received your products, your products will automatically go live. This means that they'll be available for sale. They will also become Prime shipping eligible.

What Are Some Benefits of Using Amazon FBA?

1. Flexibility

One of the best things about using this e-commerce platform is that it allows you to run your business and have a life. No more working insane hours every day or taking care of every single process. Instead, Amazon FBA does most of the work for you in this online marketplace.

2. Access to Amazon Prime Members

If you've used Amazon before, you've probably heard of Amazon Prime. Amazon has over 200 million Prime members. Imagine all these customers being at your disposal.

Compared to other non-Prime members, these members enjoy services like free one- to two-day shipping and the ability to return the product if they see fit. You'll get to sell to all these Amazon customers without doing too much advertising on your part.

Once your products are listed, they'll have a Prime badge and thus be accessible to millions of people.

3. Shipping to Amazon’s Fulfillment Centers

This is another great thing about this marketplace. You can sit back because your inventory is sent from your manufacturer's factory to the Amazon warehouses.

Once you create your shipping plan on the Amazon Seller Central platform, you can start the shipping process.

Amazon will then store your products until a customer purchases them and they are shipped to them. This brings us to the next advantage.

4. Amazon Handles Shipping

Amazon FBA will be in charge of shipping your products to the customer. The people in charge of shipping will manually package your product and ensure that it gets to the customer.

This saves you a lot of time that you would have used to do the packaging and shipping yourself.

5. Amazon Handles Customer Support

Another thing you won't have to deal with is handling customer service issues. Once Amazon FBA ships the products for you, they'll also handle any customer queries that come along.

6. Customers Trust Amazon

This benefits you because you won't have to convince customers to trust you in order to buy from you. Amazon is an already established brand and a marketplace trusted by millions of people worldwide. And you get to benefit from that.

Once customers see the Prime badge or logo, they already know that they'll have access to Amazon's customer service and speedy shipping.

7. Amazon Handles Returns

Just like Amazon handles shipping and customer service, it also handles returns by customers. This takes another task from your plate. If the item returned is still in good shape, they will return it to your inventory.

So, now that you know the benefits of using Amazon FBA, how do you know it's for you? We'll find out.

Amazon FBA is For You if:

• You have no space for inventory
• You want your products to be eligible for Amazon Prime
• You sell small, lightweight products
• You want to run your business remotely
• You don't have the budget to employ people for packaging, shipping, and returns
• You don't have time to do to packaging or shipping
• You don't want to handle customer service or returns

Amazon FBA is Not For You if:

• You want to handle packaging, shipping, and returns
• You have the bandwidth to handle customer service and support
• You have a warehouse for storage
• You deal in large and heavy products
• You want to have complete control over your business

Now that you know the benefits of selling on Amazon, let's look at some pros and cons of selling on this platform.

What Are the Pros of Selling on Amazon?

Like any other online store or business, there are pros and cons to working with Amazon. We'll look at these and then move on to Shopify.

By the end of this article, you'll be fully equipped with the knowledge you need to move forward. But, first, let's look at the pros and cons.

Pros of Selling on Amazon

• Amazon handles all the shipping details
• The brand also handles all returns and customer service
• You  have access to millions of users once your products go live
• You don't have to build your own online store
• You have access to advertising and ecommerce tools such as Sponsored Display ads, Sponsored Products ads, and Sponsored Brand ads
• Amazon is constantly improving its platform and services
• You have access to Amazon's warehouses
• You have access to buyers worldwide
• You get access to more selling tools once you get into Amazon's Brand Registry
• You get to work with various business models like dropshipping, wholesale, private label, and retail arbitrage
• Your conversion rate is higher compared to most online selling platforms

Cons of Selling on Amazon

• Competition is very high from other online sellers
• You can barely customize your listing
• Amazon can kick you out at any time
• Amazon changes its rules often and anytime
• You have to follow Amazon's Terms of Service to the letter or risk permanent removal
• Seller Support isn't always available for you in case of an issue
• Some advertising tools can eat up your profit margin if you're not well informed

Now that we have a good idea of how Amazon works let's move on to Shopify.

How Do You Sell on Shopify?

Let's get started on all you need to know about Shopify.

What Is Shopify?

Shopify is an ecommerce platform that allows you to create your own online store. This is one of the differences between Amazon and Shopify, but we'll get to that later.

If you are looking for a cost-effective and simple way to get your own online store and sell online, a Shopify store is an excellent way to go. What makes a Shopify store great is that it is perfect for small businesses and startups.

Nonetheless, if you have a large brand but still want to reap the benefits of this excellent ecommerce platform, you can join Shopify Plus.

Shopify Plus offers you a Saas ecommerce solution that is fully hosted and can support large volumes of traffic and orders.

Even though we're looking at Shopify vs. Amazon, it's important to note that none of these platforms require you to know how to code. This is especially true for Shopify, which allows you to have your own website and customize it the way you'd like.

You can use their wide array of themes to design your own website to fit your brand.

Who Should Sell On Shopify?

Anyone who wants to create their own ecommerce business and sell their products online. Basically, anyone who wants to start their ecommerce journey and build their brand. If this is you, then read on as we look at the steps to follow to make Shopify work for you.

A Guide to Selling on Shopify

Let's look at the steps to follow to succeed with this e-commerce platform.

Step 1: Create An Account

The steps to signing up for an account are pretty simple. First, enter your email address and select “Start free trial.” Once you've entered your brand name, which can also be the name of your store, and created a password, you will then provide information about your business.

This step allows Shopify to recommend the best plan for your business. Once you're done with providing all the necessary information, click “Enter my store” and get started.

You can start with the Basic Plan and then proceed from there. You can either import an existing store from a different platform or build one from scratch. If you already had an online store before, you can import that.

We recommend that you deal with the "boring" stuff before customizing your store with the available e-commerce tools. Some of this work involves setting up your shipping settings, payments, and connecting to a domain.

The domain is how your customers will find you. Therefore, make it as catchy and relevant to your brand as possible.

Here are some tips when choosing a domain name.

• Make it short
• Try and go with a .com address
• Make it simple and easy to spell

Once this is out of the way, you can start customizing your new business "home."

Step 2: Design Your Store

Building and designing your Shopify online stores will be an exciting experience. This is another difference between Shopify and the Amazon marketplace. You can customize your store however you like.

You can choose a theme from the free theme library or purchase a theme from the store. Take your time choosing a theme because you want a theme that represents your brand.

Remember that your online store is your 24-hour salesperson. Therefore, you want it to represent you and your brand exceptionally well even when you're actively on the site.

The good thing about choosing premium themes is that you get more features and functionalities. However, if you are starting out, you can always go with the free themes and then change to premium later after learning the ropes.

Step 3: Work on the Imagery

Here's another place that Shopify has a leg over Amazon. You get to customize your Shopify store fully. So online sellers who want to control their store's look should consider selling online on Shopify.

Here, you have all the freedom to customize your site as you see fit.

Use high-quality, eye-catching images that tell your story. You want to appeal to the emotions of your customers and online visitors and show them that you are a competent business person.

Step 4: Add Your Products

When adding products to your standalone online store, a tip is to use relevant keywords. This will increase the chances of your potential customers finding your store and buying your products.

You should also use compelling and straightforward descriptions to increase your conversion rate and make Search Engine Optimization work for you.

Step 5: Fulfill Your Orders

You will have to fulfill your own orders with this online selling platform. However, you can also choose to use FBA or a third-party logistics (3PL) service to fulfill your orders.

When a customer places an order on your store page, you'll find it marked as Unfulfilled under the “Orders” section. Your customer automatically gets the order and tracking information after the order is marked as Fulfiled.

Step 6: Advertise

Unlike in Amazon, where you have access to millions of available customers, you'll have to generate the traffic yourself in this part of the ecommerce world. So this is another way in which these online marketplaces differ.

Some of the ways you can increase your online presence include the use of Google ads, Youtube ads, social media marketing, influencer marketing, Facebook ads, and Email marketing.

Step 7: Monitor Your Analytics

No matter what Shopify plan you decide to use, ensure that you monitor your analytics. This will help you know what's working and what's not on your ecommerce website.

Luckily, Shopify offers this information, including conversion rate, traffic sources, returning customer rate, total sales, and more.

Pros of Selling on Shopify

• It is easy to set up your store
• Shopify gives you customizable themes to use
• You can customize your store to suit your preferences
• There are no selling fees
• Great customer support center
• You have access to the Shopify app store to add functionality and features to your site
• Shopify offers you a 14-day trial period before you have to pay for a plan
• You can sell one or several products on your online store

Cons of Selling on Shopify

• It can be expensive if you're not using the basic Shopify plan
• Free themes are limited
• You don't get a custom email
• Most of the apps in the store aren't free to use
• You have to drive traffic to your store
• You have to handle your own fulfillment
• Harder to sell compared to Amazon

Now that we've looked at both selling platforms in detail let's look at them side by side. This will allow you to understand the differences and see how you can use both or either.

What Are Similarities Between Amazon and Shopify?

1. You Don't Require A Registered Business

This is one of the things you'll enjoy when you decide to sell online. You can sign up for an Amazon FBA  account or get a Shopify store without having a registered business. All you need is your personal information and your products to start your e-commerce business.

However, you'll need to provide your tax information, Government ID, a chargeable credit card, and other personal details when working with Amazon.

2. Low Cost to Set Up

For Amazon, you can choose between the Individual seller plan and the Professional seller plan. The advantage of the Individual seller plan is that you'll get started for free, although your account will be limited.

Once you've seen how this e-commerce business setup works, you can always upgrade to the Professional selling plan.

Shopify offers you a 14-day free trial period. After this, you can use basic Shopify, where you'll pay $29.99/monthly.

3. Easy to List Products

Once your account is set up, you can start listing your products. You'll need to give yourself a learning curve on both platforms. However, the process is relatively easy. You will have control over which products go live, and you can monitor the progress thanks to the user-friendly interface on both platforms.

4. Access to Seller Support

You can have access to the support network on both platforms. This comes in handy when you want to ask questions or get some information you need.

In addition to the seller support system, you also have access to e-commerce tools that can help you navigate both systems.

What is the Main Difference Between Amazon and Shopify?

Here are some differences between the two e-commerce systems.

1. Marketplace vs. Ecommerce Platform

Amazon is a marketplace, while Shopify is an ecommerce platform. This means that when you place your products on Amazon, you'll be competing with plenty of other third-party sellers. This may be for the same product or different products.

This makes selling on Amazon extremely competitive. Therefore, using exact match keywords can help your listings appear higher on search results.

Although Amazon doesn't allow you to customize your listings as much as Shopify does, you can enroll in the Brand Registry for more flexibility.

Once you're enrolled in the Brand Registry, you can customize your store further and create A+ content.

On the other hand, Shopify allows you to customize your store however you want. This ecommerce platform allows you to express your brand as you see fit.

In addition, you can use the available themes to customize your e-commerce platforms.

2. Access to Amazon's Customers

The best part about selling on Amazon is that you have access to hundreds of millions of loyal customers. This is a significant point in our Shopify vs. Amazon article.

This is because it affects your conversion rate and how fast you start selling your products.

Shoppers who come to Amazon already trust the platform. This means that you don't have to convince them to trust that your products will be delivered. This difference already puts you a step ahead of another seller who's only selling on Shopify.

Another perk is that the customers who land on your listings are already looking for your products. As a result, you can make great sales without using advertising e-commerce tools.

On the other hand, you'll have to drive your own traffic if you decide to run your e-commerce business on Shopify. That's one of the disadvantages of using this online business platform.

You can have the best website but still, hear crickets if you don't focus on bringing people to your store.

Therefore, keep this in mind as you make your decision when looking at Shopify vs. Amazon. This can be especially hard if you are a beginner in the field.

3. Selling Fees on Amazon

This is one of the downsides of selling on Amazon. The selling fees can take up a chunk of your sales revenue. Therefore consider this as you decide on which product you want to sell if you choose to sell on Amazon.

The Shopify payments or fees are not as severe. All you need to pay is the monthly fee, a payment processing fee, and a yearly payment for the domain.

Regarding fees and payments, let's look at how much it would cost you to sell on each platform.

How Much Does It Cost to Sell on Amazon?

Here are some fees you should get familiar with before you get started. This can help you budget as you choose between Shopify and Amazon.

1. Amazon FBA Fees

FBA fees cover the cost of shipping, packing, and storing your products in the Amazon warehouses. These monthly inventory storage fees are dependent on the size and weight of your products.

This is why we mentioned above that you should consider Amazon FBA if you are working with smaller and lighter products.

2. FBA Storage Fees

We've mentioned this monthly fee above, but we felt it deserved another mention. If you have any inventory left in Amazon's warehouses at the end of the month, you'll be charged this storage fee.

This fee depends on how much space your products are taking up in the warehouses. If your products are stored for over 180 days, you'll be charged a long-term storage fee.

3. Referral Fees

All Amazon sellers pay referral fees as a sort of commission for using their platform. These referral fees are paid whether or not you use Amazon FBA.

4. Selling Plan Fees

Whether you choose the Individual plan or the Professional plan, you will still pay a fee to Amazon. The Individual plan includes transaction fees. This means that you pay an additional $0.99 for every transaction you make on the platform.

You can use this at the beginning of your journey, primarily when you sell less than 40 units monthly.

However, these transaction fees can be a lot if you sell over 40 items every month. If this is the case, it would be better to move to a Professional plan where you'd pay $39.99 monthly.

5.  Refund Administration Fees

Since Amazon is in charge of refunds, they charge the fee for the FBA returns. This fee is often the lesser of $5.00 or 20% of the refunded amount.

How Much Does It Cost to Sell on Shopify?

Shopify payments are less dramatic than Amazon payments because you handle most of the processes yourself. Therefore, Shopify payments depend on the plan you're using. You will also pay a yearly fee for the domain and payment processing fees.

Which Is Better for My Business? Amazon or Shopify?

Both are great options for your business. The best one is the one that fits your preferences, budget, and the type of business you want to run. We took an in-depth look at both platforms so that you would have as much knowledge as possible to make the right choice.

Once you weigh the pros and cons and understand the working mechanisms of each, you will see which one is for you. This applies whether or not you've decided on the products you want to sell.

Shopify is a better choice if you want to grow your brand. This is because you'll have your individual online store, and you can customize it however you want. Shopify is also a great option if you want to go into dropshipping.

On the other hand, Amazon is an excellent choice for beginners because you have millions of customers to advertise to directly.

But, of course, there is a learning curve before you become a master. However, once you do, the world is your oyster.

We're also here to help you navigate this journey like a pro. Note that just because Amazon has millions of trusted customers doesn't mean that you will automatically make sales.

What you have to do is position yourself and your products in a strategic way that beats your competition.

You need to choose the right products, use the available advertising tools, and be ready to put in the initial work.

All in all, you can be successful on either platform if you put your mind to it.

Frequently Asked Questions About Shopify vs. Amazon

1. Can you sell on Amazon without Shopify?

Yes. Amazon doesn't require you to have a Shopify store or even a registered business to get started. All you need to do is provide the necessary information, and you can get started with your Amazon selling experience.

2. Can you use both Amazon and Shopify?

Yes. If you are undecided on which platform you want to use, you can try them both or integrate both of their systems.

Here are some steps to follow if you want to use both Amazon and Shopify for your business.

1. Create your basic Shopify account and set up your store by following the steps above
2. Use the available apps on the store to increase functionality and features on your store
3. List your products and all their relevant information
4. Upgrade to Shopify premium for more features and functionalities
5. Make use of various marketing and advertising campaigns to drive traffic to your online store
6. Apply for a professional seller account on Amazon
7. Get the ExportFeed app from your Shopify store
8. Connect your Amazon account to your ExportFeed account
9. Use your ExportFeed account to submit your Shopify product list to Amazon

3. Can you dropship products from Shopify to Amazon?

Yes. You can push your Shopify listings into Amazon. Shopify allows you to use Amazon as a kind of sales channel.

However, as convenient as this can be, you will still have to pay Amazon's seller fees. This can eat into your profit margin. Therefore, you need to think about this before you decide to go down this road.

4. What is the main difference between Amazon and Shopify?

Amazon is an online marketplace, while Shopify is an ecommerce platform. Amazon already has loyal customers who go to the marketplace to buy the products they need.

Therefore, you don't have to generate the traffic yourself since the customers come to your listing already looking for your products.

On the other hand, Shopify allows you to build your individual store on the platform. However, you have to bring in your own traffic and advertise your products and store to get customers.

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