It's no secret that starting an ecommerce business is becoming more and more common these days.
In fact, ecommerce sales in the US grew to $870 billion in 2021, up 14.2% over 2020 and 50.5% over 2019. Crazy, right?
So, if you're considering starting an online store, you're certainly not alone.
But with so many options available, it can be difficult to decide which one is right for you.
When it comes to ecommerce platforms, Shopify and Amazon are two of the most popular options. But which one is better for you?
The main difference between Shopify and Amazon is that Shopify is a platform that allows business to start their own online stores, while Amazon is a single marketplace with millions of sellers.
In this article, we'll break down the pros and cons of each platform, so you can decide which one is best for your business. Let's go!
Shopify or Amazon: Which one is best for you?
Looking for a quick answer?
If so, take a look at these main benefits of Shopify vs. Amazon:
| Benefits of Shopify | Benefits of Amazon |
| Full control over the look and feel of your store. | Tap into a massive customer base. |
| More freedom on what products you can sell. | Take advantage of people's trust in Amazon. |
| Lower fees. | Offers an advanced fulfillment solution (Amazon FBA). |
| More options to choose from for your fulfillment method. | A stronger flywheel effect. |
| Better customer service. |
In short:
- Shopify is better for you if you want to start an online store and don't mind working on getting visitors to your store.
- Amazon is better for you if you want to tap into Amazon's millions of website visitors and don't mind working your way up through the competition and paying higher fees.
If you're unsure of which ecommerce platform to pick, take our quiz here to get a personalized recommendation based on your needs:
What are these platforms?
Before moving on to the most significant differences between Shopify and Amazon, let us briefly introduce both platforms.
However, if you feel like you already know what they are for, feel free to skip over to the next section!
What is Shopify?
Shopify is arguably one of the best – if not the best – ecommerce platforms out there.
It's designed to make it easy and affordable for beginners to start their own online stores.
Shopify is popular for so many reasons. And if popularity is any measure of a great platform, Shopify can claim that achievement because it currently boasts almost four million customers!
But what makes Shopify so easy to use?
Three main things; their store builder, themes, and app store.
The store builder allows you to build and customize the look of your online store. And the best part is, you don't need any coding for it!
But wait, was that really the best part?
Well, here's another thing. Thanks to Shopify's themes, you don't have to start designing your store from scratch.
Simply pick a theme from the Shopify Theme Store that you think will fit your brand and use it as a starter template:
The last awesome thing we would like to highlight is the Shopify App Store.
It basically comes down to the following:
If you feel like you're missing any features from Shopify's standard offering, there's likely a Shopify app available that does exactly what you're looking for!
In the end, Shopify enables you to build your own online store, which could look something like this:
This is Gymshark's online store, one of the most popular brands using Shopify!
Note: If you would like to see more awesome Shopify store examples, check out this article!
What is Amazon?
Amazon is one of the largest online retailers in the world.
Founded in 1994 by Jeff Bezos, Amazon started as an online bookstore but soon began transforming into a general store that sells a much wider variety of items.
Today, Amazon operates globally and sells almost anything you could think of.
And they don't do it all by themselves.
Instead, Amazon also brings on third-party sellers on their platform, allowing them to expand their catalog even further.
And guess what? You could be one of those 3,700 new sellers joining Amazon daily!
If that sounds like a lot of competition, we have something comforting for you:
As you can see, Amazon's annual net sales revenue has been compounding for a long time and reached a staggering $469.82 billion in 2021.
So, if you manage to grab just a tiny part of that revenue, you will already do well!
Here's what a typical product page on Amazon's marketplace looks like:
The 6 most significant differences between Shopify and Amazon
Now that you better understand how Shopify and Amazon work, let's dive into what makes them different!
1. The platform type
Perhaps, the most significant difference between Shopify and Amazon is that they are entirely different types of platforms.
Shopify allows you to build your own online store, while Amazon is an online marketplace with millions of sellers.
Shopify offers you all features and tools you need to create your own online store, whereas Amazon focuses on building a marketplace (which is Amazon.com) where buyers and sellers are connected.
This means that Shopify sellers all operate their own website through which they sell their products:
Just think about the Shopify store example we gave earlier, Gymshark.com. It's an online store with its own look and feel, separated from any other companies offering fitness items.
In contrast, all Amazon sellers sell their products through listings on Amazon.com, where they are all placed in one extensive list:
2. Customer attribution
The next important difference between Shopify and Amazon sellers is how you attribute customers.
Shopify sellers must work on marketing to get visitors to their stores, while Amazon already gets millions of visits per day.
You may know that Amazon gets a ton of visits every day. After all, it's the first website many people visit when looking for online shopping.
And when your product is listed on Amazon, you may get thousands of pageviews on your listing without having to do anything!
This is an entirely different story on Shopify, where each seller has their own website. It means that marketing is critical for anyone who wants to start and run a Shopify store.
You will likely have to start with any of the popular marketing for ecommerce stores, such as using Facebook Ads, Google Ads, or influencer marketing:
3. The process of creating a brand
Do you think branding is a crucial factor in the success of an ecommerce business?
If so, you may want to pay attention here.
That's because your ability to create your own look for your listings differs greatly depending on whether you're using Shopify or Amazon.
Shopify offers almost full control over the look and feel of your brand, while Amazon forces you to stick to their format.
With a Shopify store, you can decide which colors you want to use, how your store is structured, how you present your product, and much more. This means that Shopify sellers can really put their stamp on their store.
All in all, Shopify makes it much easier to brand your online store and end up with a great-looking website like the one of Allbirds here:
Tip: If that inspired you, then you can check out ten other ecommerce brand examples here.
So, what's the alternative?
Well, you can list your products on Amazon, but you won't have as much control over the look and feel of your listings.
And because Amazon is such a vast marketplace, you'll likely have a much harder time when it comes to branding, building a loyal customer base, and beating your competition!
4. The fulfillment process
Another critical difference between Shopify and Amazon is the options you have when it comes to the fulfillment process of your orders.
Shopify allows you to choose from a variety of fulfillment methods, while most Amazon sellers use Fulfillment by Amazon (FBA).
When starting a Shopify store, you will have the options to choose between four main types of order fulfillment methods:
- Third-party fulfillment. Buy your own inventory and let a third-party fulfill your orders.
- In-house fulfillment. Manage the fulfillment of your products yourself.
- Dropshipping. Sell products without keeping them in your inventory.
- Print on demand. Design your own graphics for the items you sell and only let them be manufactured once you receive an order for them.
All of these are viable and common options for new Shopify stores!
In contrast, more than 70% of Amazon sellers use FBA, which is Amazon's version of a third-party fulfillment method. You simply send your products to Amazon, and they will ensure they will reach your customers once the orders start rolling in.
5. Pricing and fees
Next up is something that will be different across most platforms you compare, the pricing.
Shopify charges a monthly fee, transaction fees, and app fees, while Amazon charges a monthly fee, referral fees, fulfillment fees, and other costs.
So, let's talk about some numbers!
Shopify has three main pricing plans, ranging from $39 to $399 per month, although the cheapest plan is more than sufficient for most Shopify stores.
On top of this, Shopify asks for 2.4 to 2.9% + 30¢ USD per transaction. And lastly, you might have to pay some monthly or usage-based fees for your Shopify apps!
On the other hand, Amazon offers two pricing plans, with the $39.99 per month plan being the better choice for many businesses.
However, like with Shopify, Amazon will add some fees on top of this.
For instance, they charge a referral fee of 8 to 15% per transaction, a fulfillment fee if you're using FBA, and you may also have to pay for other costs, like long-term storage, advertising, or premium account services.
In the end, Amazon is much more likely to be more expensive than Shopify, especially if you're selling lots of products (due to Amazon's hefty referral fees)!
6. Customer support
Last but not least, customer support.
Shopify offers world-class, 24/7 customer support, while Amazon's customer service lacks helpfulness and accessibility.
Shopify has an excellent support team that can help 24/7.
Whether you prefer reaching out via phone, chat, email, or Twitter, it's all available! Shopify even built a large community forum where you can connect with other merchants to learn and receive support.
You can also find answers to your questions through the Shopify Blog, tutorials, webinars, and the Shopify Youtube channel.
It's perhaps the best support offered among top ecommerce platforms!
On the other hand, support for Amazon sellers isn't as good.
Amazon's customer support team is harder to reach and isn't as helpful. In fact, Amazon Seller Central currently has a 1.1 out of 5-star rating on Sitejabber because everyone says Amazon's support is that bad.
Common concerns include the unhelpfulness of Amazon's representatives, the inability to get someone on the phone, and a lack of replies.
The benefits of using Shopify (vs. Amazon)
Awesome! You're now aware of the main differences between Shopify and Amazon.
Let's summarize how those differences translate into the benefits of using Shopify compared to Amazon:
Shopify offers full control over the look and feel of your store
Shopify gives you complete control over your store.
You can choose your own domain name, design your own website, set your own shipping and return policy, and more!
This can be a major advantage if you want to build a strong brand identity for your business.
Meanwhile, on Amazon, sellers compete with millions of others with similar-looking listings, all fighting for limited shelf space.
Shopify offers more freedom on what products you can sell
When selling on Amazon, it shouldn't come as a surprise that you must adhere to Amazon's policies.
However, among those policies, there are restrictions on what you can and can't sell. Below is a list of category, product, and content restrictions on Amazon:
As you can see, there are quite some restrictions here!
With Shopify, you can sell anything from digital products to physical goods.
Shopify charges fewer fees
One of the key benefits of Shopify is that it charges lower fees than Amazon.
As we saw earlier, Amazon charges a hefty referral fee of 8 to 15% on every product sold, as well as other costs. These fees can eat into your profits if you're not careful!
On the other hand, Shopify charges a flat monthly fee plus a small transaction fee for each order.
This means that Shopify sellers can save money on fees, especially if they sell a high volume of products.
Shopify offers you more options for your fulfillment method
As we discussed earlier, most Amazon sellers use Fulfillment by Amazon (FBA).
And it's not that FBA or any other third-party fulfillment method is a bad practice. In fact, they can work really well for some businesses!
It's just that you will have fewer options to choose from when selling on Amazon.
For instance, using Shopify enables you to start a dropshipping or print on demand business, which is much harder to do on Amazon due to their policies.
Shopify has better customer service
If you're stuck on something, it's always nice to have help available.
And that's something that Shopify offers!
With their 24/7 live chat feature, you will always have someone to talk to. And in our experience, they're always friendly and helpful:
The benefits of using Amazon (vs. Shopify)
We've seen some advantages of using Shopify, but Amazon also has some benefits! Let's check them out:
Tap into Amazon's massive customer base
This may be the biggest benefit of selling on Amazon, which receives around 2.5 billion visitors every month:
So, instead of continuously working on getting visitors to your store, you just need to ensure your product listings have a good rank and you will get lots of views on your listing.
And more visitors equals a higher likelihood of making sales!
You can take advantage of people's trust in Amazon
Amazon is a highly trusted platform with a reputation for providing reliable products and services.
As a result, customers are more likely to purchase on Amazon than on other ecommerce platforms.
This trust also extends to the sellers who use Amazon's platform. Because customers trust Amazon, they are more likely to trust the site's sellers!
Amazon has an advanced fulfillment solution
Amazon limits you in your fulfillment method options, but on the other hand, Amazon FBA is a great solution.
With Amazon FBA, you ship your products to Amazon, and they store, pack, and ship your products for you. The main benefit of Amazon FBA is that it's convenient; customers can order products from you and have them shipped directly from Amazon.
Furthermore, it offers a solution for achieving fast shipping times, handling returns, storing inventory, and scaling your business!
Amazon businesses experience a stronger flywheel effect
The flywheel effect is a concept that can be applied to many different aspects of life, but it's particularly relevant to businesses.
In short, the flywheel effect is the idea that it takes a lot of effort to get your business up and running, but once it's there, it's easier to maintain that success!
For Amazon sellers, the flywheel effect can be a powerful tool for long-term success.
At first, your product listing is placed at the bottom of the search results. You will have to battle through the competition to get a better ranking, but once you get into one of the top spots, sales will keep coming in without much effort from your side!
FAQs about Shopify vs. Amazon
Any questions left about Shopify vs. Amazon? If so, we may answer them below; take a look!
Is Shopify the same as Amazon?
Shopify is not the same as Amazon. Shopify is a platform that allows businesses to create their own online stores, while Amazon is primarily an online marketplace.
Is selling on Shopify better than on Amazon?
If you want to run an online store that is fully customizable, offers more options for your fulfillment method, and charges fewer fees, then selling on Shopify is better than on Amazon.
Is Shopify going to compete with Amazon?
While Shopify and Amazon are different types of platforms, there are some signs that Shopify will compete with Amazon in some aspects. For example, they launched the Shopify Fulfillment Network, which offers similar benefits to Amazon FBA.
Is Shopify bigger than Amazon?
At the moment of writing, Shopify's market capitalization is around $35 billion, while Amazon's is $1.2 trillion (it's the world's 5th most valuable company). In other words, Shopify is not bigger than Amazon.
Summary
Before we go to the final verdict, we've created a quick summary of this article for you, so you can easily remember it:
- The main difference between Shopify and Amazon is that Shopify allows sellers to build their own online store, while all Amazon sellers operate on the same platform.
- If you want more control over the look and feel of your business and brand, have more options in fulfillment methods, and don't mind marketing, Shopify will be the better choice for you.
- If you want to tap into Amazon's customer base and reputation and like the idea of using Amazon FBA, Amazon will be the better choice for you.
Conclusion
When choosing between Shopify and Amazon, there's no right or wrong answer.
It depends on your specific needs and goals as an online seller.
If you want your own online store and don't mind doing a bit more work to market your products, Shopify is a great choice.
However, if you're looking for maximum exposure to potential customers, then Amazon might be a better choice.
We hope this article helped you decide between the two, but if not, don't hesitate to contact us!
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