Amazon vs Shopify - Which Platform is The Most Effective eCommerce Solution

Amazon and Shopify combine to take up more than half of the eCommerce market. Selling on either platform could earn you a great deal of money. But which platform is better for your eCommerce business?

To find out which eCommerce website is better for your needs, check out our comparison below.

The primary difference between Amazon and Shopify is how you can use the two platforms. On Amazon, you create an account and compete with other sellers on a shared marketplace. Meanwhile, Shopify customers build a unique online storefront for their sales.

This means that the two platforms have unique advantages and disadvantages. To learn more about the hurdles you need to overcome, check out our pros and cons comparison below.

Amazon's strengths come back to the amount of work you have to do. Third-party sellers succeed here because they can focus on sourcing and selling products. Sellers also need to worry about managing inventory and advertisement, which is far less than what you would have to do on an entire website. Because of this, Amazon is ideal for many online businesses just starting.

• Easy to become an Amazon seller

Becoming an Amazon seller requires a short and straightforward process. By confirming your identity, bank account information, and physical address, you can get started within one or two weeks. You do not need to be a business owner to sell on Amazon.

• Unlimited free traffic

Amazon puts in the effort to attract numerous people to their website. As a result, you don't need to pay for traffic like you would with your own website. Amazon will send shoppers to your product listing for free if your product gets popular enough.

• Amazon's logistics chain is second to none with FBA

Fulfillment By Amazon, otherwise known as FBA, is a worldwide logistics network that small businesses cannot compete with. Those who sell on Amazon through the FBA program can take advantage of this, providing their products to a national audience with no effort. This way, you don't have to invest in storage or transportation.

• Essentially does the marketing for you

Amazon has a massive marketing budget to attract people to its website. Compared to Shopify, you need to pay high dollar amounts to bring people to your website. You still have to pay for advertising on Amazon, but you don't have to market to people with an unproven platform, as Amazon is the proven platform on your behalf.

• With FBA they handle everything for you, including customer service

FBA sellers hand off most of their services, including storage and transportation. However, FBA sellers also do not have to handle much customer service, which includes product returns. This allows you to focus more on selling your products instead of worrying about fielding complaints.

Of course, third-party merchants don't always stick around on Amazon because of those same limitations. Handing off most of your duties to a third party gives you less control over everything. As a result, there are some pretty significant drawbacks.

• FBA fees are high

Selling on Amazon includes a wide range of fees, including the cost of your selling plan, referral fees, and other expenses. When you add in FBA fees, you pay extra for fulfillment costs. These fulfillment fees are incredibly high, as you end up paying for the additional exposure Amazon grants you.

• Amazon owns the traffic

Despite how much free traffic you get, none of it is yours. Amazon can direct that traffic to other product listings without notifying you, requiring you to constantly fight for that traffic. So even when you appear at the top of the search results, Amazon can remove you for any reason. Amazon SEO, or Search Engine Optimization, is an inconsistent way to get traffic, even if you don't have to pay for it.

Metrics are everything and suspensions are commonplace

Amazon has a considerable emphasis on sales metrics and following regulations
To start, sales metrics mean you need to have consistent sales records. This means emphasizing the customer experience above all else. Because of this colossal emphasis, inventory stockouts or other mistakes can ruin your chances of competing, forcing you to find alternative solutions.

Alternatively, Amazon has tight regulations regarding working off the platform and encouraging sales. For example, you might lose your Amazon storefront completely if you offer a discount for people who review your product. Amazon is known to suspend user accounts for many reasons it doesn't need to justify.

Shopify is a complete eCommerce website creation platform. As a result, you get far more control over all aspects of the platform. Below are some of the benefits you get because of Shopify.

• Own the traffic/ drive external traffic easier

When you own an online store, you control what comes and goes on it. As a result, all the traffic you generate is entirely yours. You don't need to share it with other members of a marketplace.
In addition, once you start getting an audience, you can control where that traffic goes. You don't have to rely on the whims of a massive corporation to drive that forward. In addition, you have wider SEO opportunities for your product pages.

• Adjust your prices according to perceived value

Because you don't share this eCommerce platform with other sellers, you don't have to compete for pricing. Instead, you can sell your products entirely on perceived value. If you think you have a kitchen gadget worth $120, you can sell it for that much without argument. By comparison, many Amazon sellers are stuck in a "race to the bottom," constantly having to reduce their prices to remain competitive.

• Can sell products that Amazon won't allow

Amazon has a high number of gated products only specific sellers can provide. Beyond that, some products aren't allowed to be sold on Amazon (alcohol or tobacco products). When you run your own site, all that matters is you follow the law. As long as you aren't selling something illegal, you don't have to worry about product restrictions, expanding your product options.

• Can design your own website and fit your style

When creating a brand, Amazon doesn't provide you with a lot of flexibility. Even the Amazon Brand Registry isn't entirely helpful in standing out, as your online storefront looks like everyone else's. A unique website can help you stand out, which is something you get through Shopify.

• Use Amazon or Shopify warehouses as fulfillment points

The Shopify Fulfillment Network is a direct competitor of Amazon. While not quite as big as FBA, you still have fulfillment points if you want to hire third-party providers. You can also use an Amazon FBA connection with your Shopify store, which is ideal if you sell both on and off the Amazon platform.

Despite the flexibility you get from selling on Shopify, there is more risk overall. Generally, having control over your marketing, branding, and traffic means you have to earn it. Below are some risks you must contend with from selling on Shopify.

• Requires expert marketing skills to do big numbers

Many powerful marketing tools come with Shopify. However, you need to know how to use those tools effectively. Without expert marketing, you'll often get lost in a sea of other failed stores.
Amazon, by comparison, offers advanced tools that beginners can use. This risk of loss is much lower on Amazon.

• Have to be creative when building out a long-term brand strategy

There are some impressive features for building a brand on Shopify, but a long-term brand-building strategy is complex. Given consumer expectations change year by year, you'll have to be flexible and creative when creating a brand strategy. Even experts in the field struggle with this occasionally. But unless you have deep pockets, you don't have the same room to try things out.

• Way more expensive to advertise

Shopify has SEO tools and email marketing campaign tools, but traffic is ultimately up to you. As a result, you have to pay far more for the same level of exposure you get from Amazon.
Much of this expense comes from needing to find the right kind of traffic. Amazon advertising is much cheaper because its cost-per-click payments are based on other competitors. What you pay Amazon per click only goes above what the next competitor pays.
Other advertising platforms, like Google or Facebook, are far less generous. The person you're advertising to also might not even what to pay. There is far more experimentation when getting website traffic away from Amazon.

Choosing the best platform for your business comes down to your goals and budget.
Amazon is better for new business owners who want to learn about eCommerce. You are also more likely to make a short-term profit, as your upfront investment is lower.

Alternatively, Shopify is better for individuals who want to establish a long-standing eCommerce business. Those who have dreams of being the next big brand in clothing are a good example. From a long-term perspective, you can make more money on Amazon.

If you are a new seller, you can start with Amazon and move to Shopify as you get more eCommerce experience. Trying out one of the two platforms will be educational.