Digital business owners today have at their disposal two excellent e-commerce solution providers. However, they have to evaluate options and choose between using Amazon FBA (Fulfillment by Amazon) and Shopify.
It could be that you’ve narrowed your choice and are looking to see what both of these marketplaces can offer. Or you are not sure and are afraid of making the wrong decision only to have your bottom-line affected.
You’ll be amazed at what both Amazon FBA and Shopify can do to make to your brand or selling process seamless and satisfactory, no matter which one you choose.
The Key Differences Between Shopify and Amazon FBA
Shopify and Amazon FBA both offer sellers a set of e-commerce features and benefits. Making the best selection as a business owner is essential if you are to take advantage of each platform’s solution.
These are the two most prominent e-commerce players, each boasting vast contributions and reputation in the online marketplace. Over 2.5 billion customers each month use Amazon FBA, while Shopify powers 800,000 businesses. Both e-retail giants are reliable and make it hard for budding entrepreneurs to choose between them.
Setting up your e-commerce business is unique, but the need for enhanced visibility doesn’t equate to ease of setup. Some benefits and setbacks result from selling on each of these popular platforms.
Apparent differences between Shopify and Amazon FBA involve their mode of operations. While Shopify is designed around focusing on building your business from scratch, Amazon FBA is a ready-made fast-tracking marketplace.
Shopify will give you access to e-commerce tools that help build your e-commerce store, but Amazon FBA puts you in front of an available customer base. With Shopify, you have the potential to develop a standalone web-store, and FBA has millions of product-ready clients.
Solutions for Budding Entrepreneurs Caught Between Two Giant E-Commerce Platforms
At this point, the decision may seem clear cut, and you may already be leaning towards Amazon FBA instead of Shopify. Amazon FBAs huge customer following and the ready market will sway you in favor of that platform.
That may end up being far from the case.
You’ll have to pay Amazon FBA for every sale based on considerable percentages. With Shopify, there is no pre-established traffic for the web-store you’ve designed and built. But once you start selling, there are no obligations to relinquish a percentage of your profits.
Setup also makes it difficult to make a comparison between Shopify and Amazon FBA as an e-commerce platform that suits your business model. Due to these operational variations, Shopify caters to small to large businesses, while Amazon is tailored to individual sellers and small and medium enterprises.
Launching an E-Commerce Business on Shopify: the Pros & Cons
Shopify is a leading e-retail platform that allows you to start an online store with no technical expertise. Entrepreneurs have at their disposal a simple, user-friendly design features host through which to launch digital businesses.
With very little skill, you can build a premium quality store without competing with others in your marketplace. You must, however, source your customers once the fun of building and designing your web-store is complete.
Pros of Shopify
Choosing Shopify as your e-commerce platform offers a wide range of benefits, especially for beginners.
Ease of use
It’s easy to set up and administrate your store on Shopify, which makes it a popular choice in the e-commerce marketplace. You can also take advantage of professionally designed web-store templates to take advantage o.
Shopify allows you to create your storefront in English or any other listed language. You can select a payment gateway that better appeals to your target customers and Shopify accepts several currencies.
There is a Shopify e-commerce university that provides you with how-to guides and other resources, all augmented by an in-house support team that’s available 24/7.
Allows access to premium business building apps and tools
When launching your e-commerce business, Shopify lets you keep costs down by providing the best apps and tools that relate to your customers. Your storefront will contain zooming in capabilities so prospective customers can take a better look at your products.
Potential buyers can read other customer’s reviews, and you have the option of fulfilling your orders or working with 3rd party drop-shippers or fulfillment providers.
Expanding your brand identity and building your e-commerce client base becomes more accessible with apps and tools on this flexible e-retail platform.
Other pros for using Shopify and your business vehicle of choice include:
- A free 90-day trial period
- Flexible design
- The ownership of the web-store belongs to you.
- Affordable for beginners launching their e-commerce business
- Complete control over the trajectory of your business model
- Offers unique brand identity
- Limitless opportunities for brand growth
- Low fees and free payments
The pros just keep rolling in with Shopify, and you can start building your store with a basic plan that offers 90 days free. You’ll not be charged to use Shopify’s payment solutions during the trial period, allowing you to experience the platform’s benefits for digital business.
Cons of Using Shopify
While the cost of launching a web-store on Shopify is less expensive, you must do all the marketing yourself to attract customers. This puts marketing costs at a greater risk of increasing, as your business model cannot piggyback on Shopify’s reputation.
As you continue using the provided tools for client attraction, your monthly fees may go up if you use additional apps. With the standard plan, there is no availability of analytics, including access to reports.
When you use a third-party payment provider on Shopify, the transaction fees for your sales may apply and affect your bottom-line.
As you launch your web-store on Shopify, be critically aware of marketing your products since this can become a tremendous undertaking. Unlike on Amazon, where the store’s credibility and reputation back up your products, you have to invest money and efforts to promote or market your brand on Shopify.
Launching an E-Commerce Business on Amazon: the Pros & Cons
Amazon FBA is a leading platform that features straight-away usability. Fulfillment by Amazon allows products to be stored in Amazon’s warehouses and delivered to customers using their fulfillment services.
The highest standards of consumer satisfaction are applied by Amazon, ensuring that the correct products reach the customer at a swift pace.
There is considerable potential for beginners in launching their e-commerce businesses to increase product sales and achieve high customer satisfaction rates quickly. This also gives your brand wider visibility and growth since the happier the client, the more likely they are to return.
It’s important to note that when using FBA, you can’t list your items anywhere else in the marketplace. This can act as a benefit or drawback, as you cannot undercut the competition with your own products; you must concentrate on your Amazon storefront.
Pros of Using Amazon FBA
Amazon FBA is the perfect place to launch your web-store as a beginner, even with no technical expertise. There’s a ready-made marketplace waiting with available customers on FBA, plus the e-retailer has a marketplace reputation that’s worth billions of dollars.
Other benefits of making Amazon FBA your e-commerce platform include:
- A free 30 day trial period on the Pro plan
- Readily available and instantly accessible global audiences
- Ready-made market reputation and brand trustworthiness
- Immediate start-up and selling
- Availability of motivated consumers
- Seller support is built-in.
- Returns and refunds are accessible.
- Reports and sales analytics availability
- Efficient fulfillment and warehousing services
With Amazon FBA, you can start off with a 30-day free trial on the Pro account. This lets you start selling to a recipient consumer base — think of it as a soft opening. As you get to know your storefront’s settings, your first listing can be displayed within an hour, making the first sale almost immediate.
Once your products are shipped to FBA, Amazon deals with the damages, returns, refunds, and other customer services. This results in an entirely hands-off operational capacity for you.
Cons of Using Amazon FBA
While featuring an easy to use administrative interface for sellers, listing products on Amazon FBA has time-consuming back-end sections that require completion.
There is a longer registration process when selling through FBA, and products have to be shipped to dedicated Amazon warehouses. Many of the cons of using Amazon FBA, however, deal with regulations and fees.
Although the fees paid to Amazon are reasonable considering that you do not have to invest in marketing apps to draw in your customer base, they can be daunting to beginners. In a nutshell, the disadvantages that a beginner launching their website faces on Amazon include:
- A 15% to 40% fee paid to FBA for each sale
- Risk of suspension from the storefront if your products underperform
- A highly seller saturated platform
- Storefront and product page not under your control.
- Limited web store design options
- Cheaper competitors may cause the undercutting of your prices.
Some categories on Amazon FBA are congested with sellers, causing undercutting which, coupled with restriction, may affect a launching brand’s performance.
Which E-Commerce Platform Should I Use as a Beginner?
As a digital business beginner, it’s not surprising that costs will play a significant role in your decision. One of the critical aspects of a budding enterprise is keeping an eye out on your profit margin and the factors that affect it.
Overview on Fees
Both Amazon FBA and Shopify have their obvious benefits and perceived disadvantages. One will give you complete control of your web store while the other substitutes control with an existing audience.
You pay more in fees with Amazon FBA, but the ready-made marketplace is a big lure for many product categories. While Amazon handles all the nitty-gritty of dealing with your consumers, you can concentrate on marketing your products and expanding your brand.
A Pro account with Amazon will cost a typical $25 + VAT (Value Added Tax) each month. Additionally, you’ll pay a seller’s fee of around 15% on each item you sell. FBA fulfillment and warehouse storage costs bring your total fee percentage close to 35%.
Shopify, on the other hand, has three pricing packages:
- a basic plan for $29 each month
- Shopify for $79 every month
- advanced Shopify for $299 every month
As a beginner, Shopify’s basic plan has everything you require to launch your web-store, except for the reports.
While costs on Shopify will closely mimic selling on Amazon without using fulfillment, additional charges can mount if you use more paid apps.
If that’s not the case, Shopify payments will include only the monthly plan price if you are using in-platform payment solutions. Having zero selling fees is a benefit when you start making sales. You won’t have to worry about losing your profit before you even start making it.
The higher selling cost on Amazon FBA can, therefore, be weighed against the tremendous traffic that this platform provides.
Owning Your Customer Data (The Benefits of Shopify)
You don’t need a concrete business model to start your web-store on Shopify, and neither will building or designing your product pages demand a hefty investment of capital. A beginner on this platform doesn’t risk a substantial amount of money up-front.
One of the major benefits of using Shopify, as opposed to Amazon FBA, is ownership of your channel. With Shopify, you have full control and ownership of your web-store, including its layout, design, and consumer data analytics.
Amazon FBA trades storefront ownership with immense global customer availability and international recognition. This comes as a risk to many budding entrepreneurs since failure to conform to Amazon regulations for their bottom line sales requirement can kick your products from the platform.
Shopify allows you to own your online brand outlet with fairness in fees. However, a lot of product marketing and brand exposure time is needed, including customer attraction, fulfillment, and storage management.
You can reap the benefits of the Shopify e-commerce platform only if you stay ahead of your competitors. With Shopify Plus or the Advanced Shopify plan, you own the rights to the property and channel you’re selling through.
With time and investment, your Shopify storefront will have a sustainable audience, and the advantage is that the customers are yours. Your Shopify web-store cannot be removed from the platform on flimsy grounds, and even severe offenses require filed complaints and multiple bad reviews.
As you become a savvy Shopify merchant, you’ll save money with their monthly plans and per-transaction fees.
Attracting Customers from Amazon FBA to Your Shopify Web-Store
Selling on Amazon FBA is appealing due to the immediate exposure that your products receive. Many consumers worldwide use the Amazon marketplace as their first online option due to its accessibility, low prices, and efficient fulfillment.
Compared to this existing consumer base and established reputation, selling on Shopify appears daunting to beginner entrepreneurs. It means that you have to get traffic to your Shopify site and establish your unknown brand’s reputation.
Other than the fees and policies that deter launching brands using Amazon FBA, your products can start making conversions almost immediately. Shopify trades this off with letting you have control of your storefront, and not having to bite too much into your revenues.
With Shopify, your e-commerce endeavor is a long-term project that’s sustained by your investment in marketing time, ingenuity, and money.
Depending on your small business strategy and the competition in your product category, you may opt to sell on both platforms. However, this can only work if you prioritize one over the other, like using Amazon to target customers and re-directing them to your Shopify business.
Building up your Shopify portfolio with Amazon FBA sourced client bases involves the direction of traffic, or using customer data to increase the profiles of your target consumers. By finding out where the larger percentages of your FBA sales are being generated, you can direct your marketing focus to that segment.
Which Is Easier to Launch E-Commerce Enterprises On?
You’ve now weighed the pros and cons to decide with which platform you’ll establish your brand’s digital presence. Once you find the e-commerce platform that’s most compatible with your business model, it’s vital to consider how to involve yourself in that decision.
By thinking about your business’s growth strategy, you’ll have matched the enterprise you have in mind with either Shopify or Amazon FBA or both. Consider the future of your customer base, and if you prefer to have ownership of your channel with Shopify or participate in a pre-establishing marketing network like FBA.
If, as a seller, you know how to drive traffic, advertise, and do marketing, Shopify will be the best tool to start your e-commerce enterprise. You won’t have to pay steep platform commissions, seller fees, and other rates while dealing with competitive sellers on saturated categories.
However, you may have no experience with website traffic driving and don’t have an idea of what SEO, PPC, or A/B testing mean. If this is the case, Amazon FBA will be a great marketplace to field your first storefront and concentrate on building your brand instead of marketing duties.