Amazon vs Shopify: Which marketplace is best for a new seller

Entering the world of eCommerce can be intimidating for sellers starting out.

One of the first areas new sellers struggle with is picking whether to sell on Amazon or creating a personalised site on Shopify. There are many various advantages and disadvantages to both and it will come down to long-term and short-term goals.

Amazon

To have any chance of eCommerce success, you will need to know your selling platforms inside out. Alternatively, you can focus on your products and hire an Amazon agency https://nuoptima.com to work their magic to get your business up and running.

Whether you go at it alone or hire an agent, the decision on what platform you choose to sell on will fall to you. Here is a short guide to the differences between Amazon and Shopify, along with a few tips to help you stand out in a crowd of competitors.

The difference between Amazon and Shopify

The differences between Amazon and Shopify are huge – the first is an online marketplace and the second a standalone eCommerce platform. Think of Amazon as a stall you could rent in your local shopping centre, which has vast foot traffic and the potential for many sales, but you will need to fight to be seen through the crowd. On the other hand, Shopify is like renting a little boutique hidden away on a side street that no one knows is there.

If you want to make online sales quickly and focus on your short-term revenue goals, Amazon is the place to get started. You are much more likely to generate sales rapidly than attempting to sell on your own online store, which has not yet been discovered.

Those drawn by the dream of having their own branded website with complete control over the customer experience, Shopify will win hands down over Amazon. It does take a little bit of work to configure the site to how someone would want an eCommerce store to function, but with the drag and drop editor, you do not need to be a web developer to build a half-decent site.

As with all online stores, showing up in the search engine result pages (SERP) is a stumbling block whichever platform you choose. With Shopify, you will need to cosy up with Google’s ever-changing search algorithm, along with the others like Bing and Yahoo. If you go with Amazon, the challenge comes with wrapping your head around the A10 Algorithm.

Marketing on Amazon and Shopify

Whether selling on Amazon or Shopify, you will need to focus on marketing to get your products noticed by customers. You will be responsible for all your own marketing and building brand recognition.

Amazon does provide sellers with the option to sponsor their products to target new and existing customers in and off Amazon. There are many advertising options on Amazon, including:

  • Sponsored Product Ads;
  • Sponsored Brand Ads;
  • Sponsored Display Ads.

With Shopify, you will need to look at external advertising like Google Ads or running social media campaigns. Overall, marketing your products on Shopify will be much more challenging than on Amazon. The giant marketplace already has millions of customers browsing the site every day. With your own website, you will be building your site rankings from scratch – it is hard to be found on the internet.

If you do not have the money available for paid ads, you will need to go down the organic marketing route, which involves search engine optimisation (SEO). Writing catchy titles and product descriptions come into play for both platforms. You will need to make sure keywords are included to assist with SERP.

Comparing fees and payment processing

Both Amazon and Shopify charge for selling on their platforms. Whatever option you choose, you will be bound to pay monthly fees. To start selling with Shopify, you need to select from one of three plans:

  1. Basic – $29 per month;
  2. Shopify – $79 per month;
  3. Advanced – $299 per month.

With Amazon, you can select the Professional plan or the Individual plan. The Professional plan costs £25 per month plus additional selling fees. The cost for the Individual plan is £0.75 per item sold plus additional selling fees. It is possible to upgrade to sign-up to the Individual plan while you are learning how to sell on Amazon.

One of the main advantages of Shopify is that they allow credit cards and other popular payment options without having to pay additional transaction fees when using the Shopify Payments tool. You can choose to use an external payment gateway, but additional fees will apply.

Amazon is a little more strict about its payment service and has its own Amazon Pay system. Unfortunately, options like PayPal are not facilitated as Amazon considers them a direct competitor.

Shipping and fulfilment options

When selling on Amazon, you have two options to choose from when it comes to shipping products to customers. First, Amazon offers a service called Fulfilment by Amazon (FBA), which manages the process for you. You simply send your items to Amazon, and they handle the rest – secure storage, packing, shipping, customer service, processing returns and much more.

The other option with Amazon is to do it all yourself. This comes with many challenges, including sourcing the packing materials and finding a reliable courier. It is easier for new sellers to go for the FBA option, but it does come with additional fees.

If you are leaning towards the Shopify route, you will need to set your own shipping rates and rules. This will involve a lot of research into shipping and fulfilment operation – you will then need to set up your own processes. Alternatively, there is the dropshipping option.

Closing thoughts

Whether you choose to sell on a single eCommerce platform or reap the advantages of multichannel selling, you should consider what best fits your unique business needs. For example, if your goal is to have a highly crafted site that offers your customers a personalised shopping experience, Shopify can be a good choice.

If you want to dive into the Amazon eCommerce marketplace, you should also factor in the third-party software needed to manage the account effectively. For example, inventory software to help manage orders and shipments. There are also online tools to help collect those all-important reviews.

Whichever path you choose for your eCommerce business, work hard and keep at it. It is tough to sell in an oversaturated market, but you can be an online selling success with the right tools and knowledge.