When comparing Shopify vs Amazon, there are positive qualities of both to consider. These are what set them apart from each other and other competitive e-commerce platforms. Much of what helps determine which is better include how established their own business currently is, its current margin of growth, the current customer base, and whether or not the perks and fees of one platform outweigh those of the other in their current business standing. In this article, we’ll discuss the different costs, perks, and notable considerations regarding Shopify vs Amazon and what to keep in mind when determining which is better for your e-commerce business.
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What to Look For
When deciding which company to use for your e-commerce business, certain aspects make the biggest impact on costs, exposure, branding, and ultimate success. Things to look for include easy shop set-up, ease of navigation and security, and integrations between marketing channels and existing systems, such as Facebook and Instagram. Is it SEO-friendly, mobile-friendly, and has tracking analytics capabilities? What is the available tech support? What are the customer payment options and pricing?
Shopify Benefits
Shopify is an e-commerce company with a platform that allows registered sellers to set up and display their online stores and conduct point-of-sale transactions. There are many Shopify benefits including purchasable shipping, marketing, and audience engagement tools available at various price ranges. Sellers can also start a new business and build a customizable website with Shopify’s website builder. Other available Shopify benefits and services include marketing, payment, and shipping assistance, as well as providing a means for secure transactions.
Shopify has a wide range of e-commerce tools to build and expand your online store. It also has the personalization ability to create your own e-commerce business can help establish a stronger, more unique brand. While Shopify has a monthly fee, it also provides an App Store which cuts out third-party apps that can increase overall costs. One of the best aspects is that Shopify is given regular updates every quarter. This provides users with new versions including the latest in beneficial functions and services. These new features are released to merchants regularly.
Shopify Selling Fees
Another place to compare Shopify vs Amazon is in the costs. What are the initial set-up and long-term fees to sell through Shopify? There is no initial set-up fee and sellers can take advantage of a trial period of 14 days before committing to a paid plan. However, a plan is required to officially use the services and platform for sale. All plans are month-to-month and users can change or cancel their current plan at any time. Plans range from Basic Shopify for $29 per month to regular Shopify for $79 and Advanced Shopify for $299.
Basic Shopify is an ideal starting place for new businesses still getting established and having more infrequent in-person sales. Regular Shopify is for more established businesses with a solid current growth rate and who are selling in-person or online. Advanced Shopify provides tools for more advanced reporting as needed by larger businesses. Differences between the plans include the number of staff accounts, the number of inventory locations, levels of reporting, shipping discounts and rates, payment rates, and international domains and pricing.
Additional Shopify Services
In consideration of Shopify vs Amazon shipping, Shopify has Shopify Shipping. That is a free service that helps sellers and buyers alike with order fulfillment. All aspects of shipping are combined. It helps sellers calculate shipping rates, create labels, display fees, and then send the orders. The efficiency of order fulfillment can largely affect a business’s brand reputation, profits, and buyer retention.
Shopify POS is another service that helps sellers process sales for business administrators. It also now allows other staff members to use it given an authorized QR code. Cash tracking reports are available to view your cash activity. There are also no additional fees for web hosting.
Amazon Benefits
Amazon is an online marketplace that allows registered sellers to put up their merchandise for sale without establishing their shop and instead simply presenting a storefront. They do require that you choose a charged plan upfront but its long-standing existence provides equally upfront buyer outreach and personal business exposure for quicker sales potential. There are millions of visitors monthly. The additional programs offered also provide for less worry and hassle when it comes to inventory storage, shipping, and packing which can benefit up-and-coming businesses or businesses experiencing quick growth.
Amazon Selling Fees
With costs as a major consideration in choosing between Shopify and Amazon, let’s now look at the breakdown of Amazon’s costs to sellers. Amazon selling fees depend upon the product category of the items, chosen plan for sale, and strategy for fulfillment among other potential variables. There are charges for a selling plan as well as referral and fulfillment fees. Other costs include inventory fees, rental book service fees, high-volume listing fees, and refund administration fees. The Amazon plans to choose from are Individual or Professional and their prices include additional selling fees. An Individual plan costs $0.99 per item sold whereas a Professional plan costs $39.99 per month.
Amazon Cost Calculator
When determining Shopify vs Amazon selling fees for your business, Amazon has an available cost calculator. This tool eases you into a sales methodology for higher cost efficiency and ultimate sales by helping break down individual costs of your particular products. Simply insert your product information, including your cost of goods per unit, the desired listing price to buyers, the product’s category within the Amazon marketplace options, and the chosen method of fulfillment.
Fulfillment by Seller will ask for a shipping cost per sale and Fulfillment by Amazon will ask for product size and weight. This produces a general margin of sale which includes item sale price, cost of goods, and a category referral fee. Other fees not included are taxes, chosen selling plan fees, potential shipping expenses, and FBA (Fulfillment by Amazon) storage fees. An FBA Revenue Calculator is also available to estimate a sales margin. Referral fees as a percentage and referral fee minimums are also paid to Amazon for every item sold and vary by the category of the product.
Amazon Charged Programs
Other available services include advertising, “Fulfillment by Amazon” for inventory placement, and additional services for premium accounts. Advertising services through Amazon use a cost-per-click, auction-based pricing model which allows the seller to set the desired cost when a given shopper clicks on the advertisement. “Fulfillment by Amazon” is a service in which Amazon is responsible for customer service, shipping, and returns.
Other charged specialty programs within Fulfillment by Amazon include FBA Small and Light, Subscribe & Save for FBA, FBA Dangerous Goods, Multi-Channel Fulfillment, and FBA Export. All of these options aid in remaining competitive and allow sellers to only end up paying for the services they use. Inventory placement services spread your inventory throughout multiple fulfillment centers, allowing customers to receive products faster. The cost of this service is per-unit.
The carrier program partnered with Amazon provides discounted rates when inventory is sent to an Amazon fulfillment center. With a premium account, there is also further help to determine and build a personal business plan, specialized training and coaching, and more information provided about sales growth for a seller’s increased success.
Which Is Right for You?
When comparing Shopify vs Amazon, certain aspects of one may stand out as higher priorities. Shopify sellers are wholly responsible for their marketing and brand awareness. But, there are numerous cheap options and services to cut costs as well as customization and personal branding possibilities.
Amazon has wider exposure and established services to aid in functionality and support. But, this exposure includes increased competition within its marketplace, including from Amazon itself. Personal branding can also be more difficult on Amazon. Individual sellers, as well as small and medium-sized businesses, can be well suited to Amazon. Meanwhile, small businesses up to larger brands can find business success with Shopify.
The Biggest Differences
One of the biggest differences between them is Shopify is an e-commerce platform and Amazon is an online marketplace. It’s the difference between a platform that allows a seller to build their online store to sell through whereas Amazon is the marketplace sold through, alongside other sellers. With Shopify, it’s harder to build an initial customer base. Aspects are more personal and after establishing a brand, customers passing by will directly look for you. With Amazon, you have a space in a marketplace through which to sell, still attracting customers and growing your business even if passing buyers may not be looking for you initially. For continued clarity, considerations, and comparisons between e-commerce platforms such as Shopify vs Amazon, look to SEO Design Chicago. We can help you make a chosen platform work for you toward your consistent business success.
FAQ:
- Which e-commerce platform should I choose for my store?
- What are the benefits of using Amazon?
- What are the benefits of Shopify?
- Are there tools to calculate cost and revenue on e-commerce platforms?
- What aspects should I look for when choosing an e-commerce platform?
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