If you are debating selling on Shopify vs. Amazon, then this post is for you.
In 2015, I partnered with a local retailer to start selling products on Shopify. Fast-forward to the beginning of 2020, and I started selling used books and wholesale products on Amazon under my own store.
While my full-time job is marketing for brands selling on Amazon, which I very much enjoy, Amazon may not be the best platform for every seller.
Given my marketing background and experience on both platforms, clients often ask for advice about which one they should use. The answer is, it’s up to you!
In this article I share my experiences, and the pros, and cons of selling on Shopify and Amazon.
Here is What I Discovered:
- Margins were higher on Shopify than Amazon. On average fees for products sold on Amazon total to about 15% (non-FBA) to 26% (FBA). As long as you use Shopify payments, your only fee is the monthly plan cost, which starts at $29/month.
- Customer information was readily available on Shopify. On Shopify, you get information about your customers that can help you grow your business. All this is provided by the customer (address, email, etc…). On Amazon, you get the first name, city, and state. That’s it.
- Selling on Amazon allows you to tap into Amazon’s massive marketing machine. During September 2020, it is estimated that Amazon had over 2.44 billion combined visits from desktop and mobile. That’s a lot of traffic. Shopify doesn’t offer that opportunity. Our Shopify store had 0 visits the day we opened, where our Amazon products immediately tapped into the marketing machine on Amazon.
- It was much easier to convince brands to allow us to sell on Shopify than on Amazon. About 80% of the brands that we sold on Shopify would not let us sell on Amazon. This aversion to Amazon only seemed to grow when I approached similar brands in 2020.
- Conversion rates (the percentage of customers versus visitors) was dramatically lower on Shopify than on Amazon. Our average conversion rate on Shopify was about 0.71% while my average conversion rate on Amazon is 22.6%.
- Selling on Shopify felt more stable long-term. Shopify has very little interference with sellers on their platform. While Amazon and their army of bots, can seemingly turn off your listings without warning.
- Between the endless themes and apps, you can spend a lot of time customizing your Shopify store. Outside the Amazon listing and branded store, there is virtually zero customization available to sellers.
- Search engine optimization (SEO) is critical for long-term success on Shopify. SEO on Shopify starts and ends with the plan you put together. SEO on Amazon has fewer moving parts and is much easier to optimize.
- Advertising on both Shopify and Amazon is relatively equal. With our Shopify store, we were able to easily run Facebook and Google Shopping ads immediately. With Amazon, those platforms are a little more difficult to run, but Amazon’s internal marketing is quite powerful.
- Inventory management is critical for both platforms. Shopify and Amazon put the burden of keeping inventory available to purchase on your shoulders.
- Marketing is equally important on both platforms. Whether you are optimizing your listing on Amazon or optimizing your store on Shopify, ignoring your marketing will crush your success on either platform.
- Amazon FBA shipment receiving can cause unexpected delays. I noticed about a 2 – 3 week delay from when Amazon received the product to when it was available to purchase. With Shopify, that was never an issue.
- Amazon customer support is not great. Most responses from Amazon support are canned responses with very little value. It takes a lot of patience to get your issue solved.
- Brands have far less control on Amazon versus Shopify. While Brand Registry on Amazon gives brands a little control, nefarious 3rd party sellers can still cause damage to a brand quite easily.
Margins on Shopify are much better than on Amazon
If we were to sell a set of swaddle blankets on Amazon for $49, the base selling fees would have been right around $7.35 according to the FBA Revenue Calculator. If we took advantage of FBA, then we would have added $5.80 in fees per blanket sold.
The fees on Shopify for the same set of blankets are exactly $0 per blanket sold. No fancy calculator needed. Now, we did our own order fulfillment (big mistake) for our Shopify orders, but the packing materials and overhead was still lower than what Amazon charges.
Fees can add up quickly when selling on Amazon.
Building a Relationship with Customers is Much Easier on Shopify
When a customer would purchase a product on our Shopify website, we would get their email and shipping address. When we make a sale on Amazon, and the amount of information that we receive is minimal at best.
Because of this, building an email list and a relationship with your customers on Amazon is far more difficult. While there are options to reach out to the customer, Amazon makes this increasingly difficult and, consequently, easy to violate their terms of service.
Worse yet, if you decided to stop selling on Amazon and move to a different platform, you wouldn’t have the ability to reach out to your previous customers.
Tap Into Amazon’s Massive Amount of Traffic and Marketing Machine
According to Statista, Amazon has been averaging well over 2 billion visitors each month. While only Amazon knows the exact number, it is safe to say that Amazon has an incredible amount of buyer traffic.
With a well-optimized listing, you have access to these visitors, something Shopify can’t offer.
Convincing New Suppliers and Brands to Sell on Shopify is Infinitely Easier than on Amazon
When we approached brands for our Shopify store, we rarely had a problem convincing them to open a wholesale account with them.
However, almost every one of those brands made it clear that we could not sell for them on Amazon.
That resistance continued when I approached new brands about products that I wanted to sell on Amazon.
Conversion Rates on Amazon Crush Shopify
The amount of visitors that convert to customers (a.k.a the conversion rate) on Amazon is shockingly high.
Between my own experiences and that of my clients, it isn’t unique to see conversion rates in the 15%+ range.
Compare this to my 0.77% and an average of 1.6% according to a survey from Littledata and the comparison is not even close.
Competitors and Customers Have Too Much Power over Your Amazon Listings
If Amazon receives too many complaints about your product, they can turn off your listing, which immediately stops sales.
Worse yet, a competitor can use black-hat techniques to change the content of your listings, and/or get them flagged by Amazon.
Because of these massive shortcomings, building a business solely on Amazon can put your company in a precarious spot that can easily turn south.
Shopify Sites Can be Time Intensive to Build and Manage
Between the countless Shopify themes and customization options available — and the never-ending list of apps — the amount of time we spent on our Shopify site was considerable.
While it was initially fun, it became tiresome and more of a headache than helpful.
On Amazon the amount of customization is limited to your brand and listing pages. While some might call this a disadvantage, having a low amount of customization on Amazon frees up time and bandwidth to focus on more important tasks.
Marketing on Shopify and Amazon is Required to Succeed
No matter which platform we sold on, marketing wasn’t optional.
On Shopify, we used a mix of Facebook Ads and Google Shopping ads to generate traffic and sales.
On Amazon, we used the advertising platform built by Amazon themselves. This was critical for a few of our products that we sold. Additionally, we focused on optimizing the listings to increase the rankings of the listings that we are selling.
So no matter which platform you decide to sell on, marketing is something that you cannot avoid.
Fulfillment Delays with Amazon FBA can be Frustrating
We chose to fulfill our orders on Shopify ourselves, which in hindsight was something that we should have outsourced almost immediately.
The orders we generate through Amazon are all fulfilled by Amazon using their FBA program. While this helps to save a ton of time, it also can be frustrating since you are at the whim of Amazon. For the most part, our shipments were processed within a week or two, but other times our shipments would take four to six weeks to process. Pair the processing delay with sub-par customer support and you have a great recipe for frustration.
Needless to say, the benefits of letting Amazon fulfill the orders still outweigh the frustration and I wouldn’t have it any other way.
Amazon Listings Can Be Hijacked Easily
Probably the largest difference — and downside — between selling on Amazon and Shopify is the amount of control over our listings.
On Shopify — outside of abiding to the minimum advertised price (MAP) requirements from certain brands — we had virtually unlimited flexibility and total control of the listing.
However, with Amazon it is entirely a different ballgame.
While Amazon has revamped their Brand Registry to help brands control their Amazon listings, we have found that it is incredibly easy to still manipulate a listing.
One of the largest issues is how easy it is for Amazon sellers to start selling products without permission from the brands. Amazon has made strides to stop this, but it is still far too difficult for brands to stop this from happening.
Worse yet, once an unauthorized seller is on the listing, they can sell the product at any price and even make listing suggestions to modify the existing listing.
The problem we run into the most are the sellers who violate the MAP agreement. These sellers will come in with a lower price and win the buy box, bumping authorized sellers out of the rotation. Because of this, we have to sit on our inventory while the brand owner tries to work with Amazon to fix the issue.
While this doesn’t happen all the time, it does happen.
Shopify vs. Amazon Summary and Conclusion
Definitively answering the Shopify vs. Amazon debate doesn’t come easy.
I really enjoyed my experience selling on Shopify. Selling on Amazon comes with frustrations, however, selling on the world’s most popular e-commerce platform also brings some incredible benefits that Shopify will never be able to match.
Shopify has built an incredibly strong platform that makes e-commerce more accessible for anyone willing to do a little work upfront with minimal maintenance going forward.
My suggestion would be to start on the platform that makes the most sense for your brand, build a solid base of revenue, and then move to the other to do the same. This has been what my most successful clients have done, and will be my plan of attack when a new venture comes my way.
Now I’d like to hear from you:
How have your experiences been selling on Amazon or Shopify?
Or, are you still thinking about getting started with one or the other?
Either way, I would love to hear your thoughts in the comments below.