Shopify vs. Amazon 5 Key Factors to Consider (infographic)

Shopify vs Amazon Infographic

In e-commerce, many people get stuck analyzing and searching for the best solution. Whether it's an accounting software, inventory management, or even what platform to begin selling on. The truth is that in most cases there isn't a clear-cut "best" choice. However, there will be a solution that fits best for each person. This is definitely the case when it comes to comparing Shopify to Amazon. Each platform is designed for different purposes, so it all comes down to which one is a good match.

Building a Brand vs Increased Visibility

The biggest difference between Amazon and Shopify is that Shopify is a system that allows you to build your own brand online. Amazon, on the other hand, allows you to leverage their already established brand to sell products quickly. When a user purchases third-party items on Amazon, it feels very much like any other Amazon transaction. This is by design, since buyers already have a great level of trust for Amazon having a seamless third-party system increases conversions and sales. However, what this leads to in the customer's mind is that they associate their purchase with Amazon and not with the seller. This makes it very hard to build name recognition or create your own reputation for excellent customer service. In contrast, when a customer orders from a Shopify Store, he or she would have no idea that it powered by Shopify. All the branding, domain name,  and follow-up emails are designed by the store owner to build trust and name recognition. If you can successfully build a brand online, then this can become your biggest asset as consumers keep coming back and buying again, and again.

Amazon's platform does offer something though that Shopify cannot: visibility. By listing on Amazon you're putting your item on one of the most viewed sites on Earth. As you can imagine this can lead to sales quite quickly. Of course, this isn't free as you will pay a higher per transaction fee on Amazon then on Shopify (more on than later). So, with your own Shopify store you're in charge of setting up the store and getting traffic and sales. They do provide the many of the tools and training required to get this task accomplished. Shopify easily integrates with other sales channels like google shopping, Facebook, Pinterest, and Twitter. In addition they show you how to get up and running with Google Adwords campaigns, SEO, blogging, and content marketing to drive traffic and sales.

Your Own Business Model vs Preset Systems

On Shopify, you have much more freedom to create your own business model. Third-party sellers on Amazon are all compete with one another, mostly, on the basis of price. Price is the only real way to differentiate yourself from others. This leads to systems of analyzing Amazon sales figures versus wholesale prices, to determine trends and pick winners. It isn't hard to see, that with many people using the same methods and business model, that eventually it will get saturated. There are only so many niches to exploit. Shopify allows you to create many more types of businesses than traditional items on Amazon. You can sell digital items, free + shipping items, sell items through an autoresponder, subscriptions, customized t-shirts and mugs, and even services. Of course so much freedom can also have its own pitfalls, namely choosing a model that simply doesn't work.

Selling What You Want vs Getting Approval

Amazon has a massive reputation to uphold as such they get picky about who can sell certain items. In order to protect their reputation, many categories of items are restricted, meaning third-party sellers must apply before selling. This isn't a quick approval of your selling record on Amazon but a thorough check of where you are purchasing your items and includes providing wholesale invoices of new items purchased. Without the correct documentation it is easy to get denied and end up stuck with inventory that can't be sold on Amazon. That isn't to say you can run wild on Shopify. Illegal items are still out, as are many high risk categories. Much of this isn't actually due to Shopify but stems from whatever ever payment processor you're using. When choosing a payment processor keep in mind that some are more liberal than others.

Custom Design vs Amazon's Design

When it comes to design it also is a choice between freedom and being locked in to particular style. While it is clear that Amazon has a style that converts it isn't a style that is built for every niche. If you're selling books, DVDs, CDs, Software, or any other kind of media you'll do really well as that is what Amazon was originally built around. However, what if you what to sell an item that has many variations or that needs some explanation? What if you want the product to have a sales video? In these situations you may or may not get the outcome that you desire or that will convert best for the product.

What about the Fees?

Amazon's Fee structure depends on different factors, mainly what category you're in and whether you have an Individual, Pro, or FBA (Fulfilled By Amazon) account. With Individual account you will pay $0.99 per item sold, plus a percent that varies by category. Which can be up to 15% in some cases.  With a Pro account you pay $39.99 a month but don't pay the $0.99 per item charge. Obviously, once you begin selling more than 40 items a month it really makes more sense to subscribe to a Pro account. FBA accounts are much more complicated because they rely, not only on the weight and size of the items, but how long the items will be stored at an Amazon fulfillment center. It can get very complicated but it does provide a way to ensure your customers get their product quickly.

The fee structure for Shopify had three options Basic, Standard, and Advanced. A Basic account is $29 monthly and allows unlimited items without a few of the bells and whistles from the other plans. However, with this plan you also pay 2.9% and $0.30 per transaction. For $79 you get a lowered transaction fee of 2.6% plus $0.30. You also get a few extra features like abandoned cart recovery, professional reports, and digital or physical gift cards. Plus, you receive a larger shipping discount with USPS, UPS, or DHL. There is also the Advanced plan for $299 which knocks down the percent per transaction to 2.4%. I think it is also fair to note that these fees assume that you are using Shopify payments, if you you choose a different processor you'll pay whatever their fee is plus a small fee from Shopify.

Conclusion

Ultimately the decision between Amazon and Shopify comes down to personal preference. Amazon has a large user base and great reputation which can be leveraged into quick sales. Shopify allows you to build your own brand with the freedom to design every little detail to your liking. Of course, some sellers may want quick sales and to build a brand. This can be done as well, Shopify now integrates with Amazon so that you can easily select items from your Shopify store to list on Amazon. All inventory is  automatically updated in your Shopify Store. Whether you choose Amazon, Shopify, or some combination of both, it will take hard work, a rock solid plan, and determination to make it a success.


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