Amazon vs. Shopify: The Pros And Cons For Sellers in 2024
One of the first questions I get asked by prospective clients is always how Amazon can differ from what they do on their shopify store. Some answers are a obvious and some are a little more nuanced. So I have put together a basic guide as to some of the core differences.
In 2024, online selling platforms continue to evolve, providing various benefits and challenges. Two of the most prominent platforms are Amazon and Shopify, each offering distinct advantages and drawbacks for sellers. Here’s an expert analysis of both, helping you make an informed decision on which platform suits your business needs better.
Amazon
Pros:
Massive Customer Base: Amazon has a vast global audience, offering unmatched exposure. Sellers can access millions of potential customers, which is particularly beneficial for new businesses seeking visibility.
Fulfillment by Amazon (FBA): Amazon’s FBA handles storage, packing, and shipping, easing the logistical burden on sellers. This service also ensures faster delivery, which can help improve customer satisfaction and increase sales.
Prime Eligibility: Products handled by FBA are automatically eligible for Amazon Prime, providing free shipping to subscribers. This is a significant draw for customers and can dramatically boost sales.
Built-in Trust: Amazon has established trust with consumers, who are often more willing to buy from the platform due to its customer service policies and easy return processes.
Cons:
High Competition: The sheer number of sellers on Amazon means standing out can be difficult. This environment can drive down prices and margins.
Fees: Amazon charges a range of fees, including listing fees, referral fees, and FBA fees, which can cut into profits.
Limited Branding Opportunities: Selling on Amazon offers limited opportunities for branding and customer relationship building, as Amazon prioritizes its own branding and customer loyalty.
Strict Policies: Sellers must adhere to Amazon’s strict operational guidelines and policies, which can be burdensome and restrict seller flexibility.
Shopify
Pros:
Brand Control: Shopify allows sellers to build and customize their own online store, offering extensive branding opportunities and a unique customer experience tailored to their brand.
Customer Relationships: Sellers have direct access to customer data, enabling them to build long-term relationships, personalize marketing efforts, and directly communicate with their audience.
Simpler Fee Structure: Shopify charges a monthly subscription fee and additional fees for using external payment gateways, but it lacks the per-item selling fees that Amazon imposes, potentially offering better profit margins on large volumes.
App Integrations: Shopify’s platform can integrate with a vast array of apps, allowing sellers to add functionalities tailored to their specific business needs, from SEO tools to advanced analytics.
Cons:
Customer Acquisition: Unlike Amazon, Shopify store owners are responsible for driving their own traffic. This requires a strategic investment in marketing and SEO to attract customers.
Fulfillment: Sellers are responsible for their own warehousing and shipping unless they partner with a third-party logistics provider, which can add complexity and cost.
Less Initial Trust: Building trust with customers can be more challenging on a standalone website, as sellers need to establish credibility without the backing of a large marketplace.
Technical Maintenance: Running a Shopify store requires some technical know-how, especially when customizing the site and integrating different apps and services.
What should you prioritise?
The choice between Amazon and Shopify in 2024 hinges on what you prioritise for your business. If you value immediate access to a vast customer base and are willing to compete in a crowded marketplace, Amazon may be the right choice. On the other hand, if you prefer full control over your brand and customer experience, and are prepared to invest in marketing and customer acquisition, Shopify might be the better path. Both platforms offer powerful tools and opportunities; the decision largely depends on your business model, resources, and long-term goals.
