Shopify vs Amazon FBA: The Battle of Titans
Two giants stand out when it comes to eCommerce: Shopify vs Amazon FBA.
The ecommerce industry is experiencing explosive growth, with global retail ecommerce sales reaching an estimated 5.8 trillion U.S. dollars, projected to grow by 39%, expecting to surpass eight trillion dollars by 2027.
Choosing the right platform for your business can be a critical decision impacting your reach, fulfillment processes, and overall success, which is why it’s important to know which you should choose: Amazon FBA vs Shopify.
What is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) is a service offered by Amazon that allows businesses to store their inventory in Amazon’s fulfillment centers across the globe.
When a customer places an order in Amazon’s listing, Amazon picks, packs, ships, and provides customer service for that order.
This allows sellers to focus on marketing and product development while Amazon handles the logistics.
What is Shopify?
Shopify is a cloud-based ecommerece platform that empowers businesses to create online stores. Shopify offers tools to manage your products, inventory, payments, and marketing.
You can fulfill customer orders with Shopify or through a third-party fulfillment service.
What’s the Difference Between Amazon and Shopify?
The difference between Shopify and Amazon lies in the core functionality of both, which are:
1. Functionality
Amazon FBA is a fulfillment service. It allows businesses already selling on the Amazon marketplace to leverage Amazon’s vast network of warehouses for the storage, picking, packing, and shipping of their products. This frees sellers to focus on product sourcing, marketing, and customer service.
Shopify is a comprehensive ecommerce platform that empowers you to build your own branded online store. It provides a user-friendly interface for managing products, inventory, payments, and marketing. You can sell through multiple channels with Shopify, not just on Amazon.
2. Cost Comparison
Costs for Amazon FBA are variable and depend on several factors, including product size, weight, storage requirements, and fulfillment fees per item sold. There are also monthly storage fees and additional costs for optional services.
Shopify offers tiered pricing plans with a monthly subscription fee. Transaction fees may also apply depending on your chosen plan.
Shopify can be a more cost-effective option for businesses with smaller product catalogs or lower sales volumes. However, you’ll need to factor in additional costs for third-party fulfillment services if you don’t choose to handle fulfillment yourself.
3. Ease of Use
From a fulfillment standpoint, Amazon FBA is easier since they handle the logistics. However, navigating Amazon’s seller platform and aligning with its strict marketplace rules can be complex for beginners. Understanding their constantly evolving policies and algorithms requires ongoing effort.
Shopify offers a user-friendly interface with readily available customer support. Setting up your online store and managing products is relatively straightforward. The challenge lies in driving traffic to your store and building brand awareness since you’re not leveraging Amazon’s established marketplace audience.
Amazon FBA vs Shopify selling plans: Which is Cheaper?
Choosing between Amazon vs Shopify hinges on two key factors: cost-effectiveness and ease of use:
Amazon FBA
Monthly Storage Fees: Costs vary depending on product size and storage requirements. Larger or bulkier items incur higher fees. These fees are charged monthly, regardless of whether a product sells.
Fulfillment Fees per Item Sold: Amazon charges a fee for picking, packing, shipping, and customer service for each item sold through FBA. These fees vary depending on product size, weight, and fulfillment complexity.
Optional Service Fees: Additional services like labeling, product returns processing, and removal orders come with extra charges.
Shopify
Basic Shopify: Starts at $29/month and is suitable for businesses just starting out. It includes essential features like unlimited product listings, an online store, and a shopping cart.
Shopify: Starts at $79/month and offers additional features like abandoned cart recovery and discounted codes.
Advanced Shopify: Starts at $299/month and caters to high-volume businesses with features like advanced reporting and carrier-calculated shipping rates.
Amazon FBA’s fulfillment efficiency can lead to overall cost savings for businesses with a large product catalog or high-volume sales. However, this hinges on careful product selection and cost calculations to ensure fulfillment fees don’t outweigh the benefits.
Transaction Fees: Shopify also charges transaction fees depending on your chosen plan. These fees range from 2.9% + 30 cents per transaction on the Basic Shopify plan to 2.6% + 30 cents per transaction on the Advanced Shopify plan.
Amazon vs Shopify: Which is Easier?
Amazon FBA
Amazon Fulfillment: Amazon handles the heavy lifting – storage, picking, packing, and shipping – freeing you to focus on product sourcing and marketing.
Marketplace Complexity: Navigating Amazon’s seller central and aligning to their strict guidelines can be challenging for beginners. Understanding their ever-changing algorithms and policies requires ongoing effort.
Shopify
User-friendly Interface: Shopify boasts a user-friendly interface with readily available customer support. Setting up your online store and managing products is relatively straightforward.
Fulfillment Responsibility: You’ll need to handle fulfillment logistics yourself or integrate with a third-party fulfillment service, such as Amazon fulfillment for Shopify.
Comparison of Features: Amazon FBA vs Shopify
| Feature | Amazon FBA | Shopify |
| Website/Store Creation | Limited customization options | Highly customizable online store |
| Product Listings | Listings integrated into the Amazon marketplace | Manage product listings within your Shopify store |
| Marketing & Advertising | Access to Amazon’s advertising tools | Extensive marketing and SEO functionalities |
| Inventory Management | Inventory stored in Amazon fulfillment centers | Manage your inventory or use a third-party fulfillment service |
| Order Fulfillment | Amazon handles picking, packing, shipping, and customer service | You are responsible for the fulfillment or use of a third-party service |
| Customer Service | Amazon provides customer service for orders fulfilled through FBA | You manage customer service for your Shopify store |
The Pros and Cons of Selling on Shopify
Pros
Brand Control: Build your own branded online store and curate a unique customer experience that reflects your brand identity. You have complete control over your store’s design, layout, and messaging. This allows you to differentiate yourself from competitors and build brand loyalty.
Multi-Channel Selling: Shopify empowers you to sell through various channels beyond just the Amazon marketplace. You can integrate your Shopify store with social media platforms like Facebook and Instagram to reach a wider audience and drive sales.
Additionally, you can explore other online marketplaces or even set up a physical storefront alongside your online store.
Greater Flexibility: Shopify offers a high degree of customization for your store and product listings. You can tailor product descriptions, pricing strategies, and promotions to fit your brand and target audience. This allows for greater control over your online presence compared to the limitations of the Amazon marketplace.
Lower Overall Costs: Shopify can be a more cost-effective option for businesses with smaller product catalogs or lower sales volume. You avoid the monthly storage fees associated with Amazon FBA, and transaction fees on Shopify become less significant with lower sales volume.
Cons
Fulfillment Management: You’ll be responsible for handling order fulfillment unless you integrate with a third-party fulfillment service. This adds complexity to your operations and requires careful inventory management to ensure smooth order processing and timely delivery.
Marketing Efforts: Driving traffic to your online store requires more effort on Shopify than leveraging Amazon’s established marketplace audience. You’ll need to invest in marketing strategies like search engine optimization, social media marketing, and potentially paid advertising to attract customers to your store.
The Pros and Cons of Selling on Amazon FBA
Pros
Large Customer Base: Access to Amazon’s vast customer base and established recognition. Millions of people shop on Amazon daily, giving you immediate exposure to many potential buyers. This can be a significant advantage, especially for new businesses looking to establish themselves.
Fulfillment Advantage: Amazon handles storage, picking, packing, shipping, and customer service for orders fulfilled through FBA. This frees up your time and resources to focus on product sourcing, marketing, and other aspects of your business.
Built-in Traffic: Benefit from Amazon’s organic traffic and marketing efforts. Amazon invests heavily in search engine optimization and marketing, which drives traffic to their marketplace and can increase visibility for your products listed through FBA.
Cons
Limited Branding: You have less control over branding and customer experience within the Amazon marketplace. Product listings align with Amazon’s format, and you cannot customize the shopping experience beyond basic product descriptions and images.
Marketplace Dependence: You’re subject to Amazon’s rules and regulations, which can change frequently. These changes can impact your product listings, fees, and overall business operations on the platform.
Additionally, Amazon may prioritize its private-label brands over third-party sellers, increasing market competition.
Which is Right for My Business: Amazon vs Shopify
When choosing between Shopify vs Amazon, the ideal platform will depend on specific business needs, resources, and long-term goals.
Choose selling Shopify vs Amazon if:
- Brand control and a unique customer experience are crucial for you.
- Selling on multiple channels beyond just Amazon.
- You have a smaller product catalog or lower sales volume.
- You’re comfortable handling fulfillment yourself or using third-party service.
- You’re willing to invest time and effort in marketing your online store.
Choose selling on Amazon vs Shopify if
- You want to access Amazon’s vast customer base.
- You prioritize convenience and a hands-off approach to fulfillment.
- You plan to sell high-volume products that benefit from economies of scale in storage and fulfillment.
- You’re comfortable operating within Amazon’s marketplace guidelines and potential fee changes.
How does Shopify work with Amazon?
While Shopify and Amazon FBA are distinct platforms, there are ways to integrate them for a hybrid approach.
1. Sell Your Products on Both Platforms
You can list your products on your Shopify store and the Amazon marketplace, reaching a wider audience.
Manage inventory across both platforms to ensure you don’t oversell.
This approach requires fulfilling orders from both Shopify and Amazon FBA.
2. Use Shopify to Manage Your Amazon Listing.
Shopify offers apps and integrations that allow you to manage your Amazon listings directly from your Shopify admin panel.
This streamlines product updates, pricing changes, and inventory management across both platforms.
Shopify and Amazon fulfillment grants listings which would still be handled through Amazon FBA if you choose that service.
Can You Use Both Amazon and Shopify for Dropshipping?
Dropshipping on Amazon alongside your Shopify store helps you reach a wider audience.
In dropshipping, you don’t hold physical inventory. When a customer places an order in your store, you forward the order details to a dropshipping supplier who fulfills and ships the product directly to the customer.
Set up your Shopify store and integrate with a dropshipping supplier that offers compatible products.