Amazon or Shopify - which one is the best most profitable ecommerce platform to use in 2021?
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If you're looking to start a business selling products on Amazon, then you'll need to know and understand the product listing criteria and how to rank on Amazon FBA. Yes, you can start making money selling on Amazon, regardless of your experience selling online.
Amazon is one of the best opportunities to make a passive income and earn money from anywhere in the world. Gone are the days of directly exchanging your time for money. That's the old model. The new model leverages the incredible opportunity that the internet affords us.
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The best part about selling on Amazon is that the retail giant does all the work for you. You'll never have to pick or pack or ship a product, ever. Gone are the days of dealing with fulfillment or customer service requests. Amazon does it all for you. All you do is collect the income.
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Amazon vs Shopify - Which eCommerce Platform Is Right For Your Business - Audio file
Amazon vs Shopify - Which eCommerce Platform Is Right For Your Business - Video file
Hey guys and welcome back to my channel. In today’s video I would like to do a comparison of Amazon versus Shopify, so be sure to watch all the way through so you don't miss any of the important details as we do have a lot to cover.
Now, before I hop into this video, if you are new to this channel you're going to want to subscribe as I talk about the best ways to make a full time income with Amazon FBA and always get straight to the point.
So please consider subscribing and turning on your post notifications if you like channels that don’t waste your valuable time, with that said let's get right into this video.
Now, if you’re looking to build an e-commerce business in 2021, there are two major platforms to consider, Amazon and Shopify.
While there are additional competitors such as WooCommerce, Walmart, Magento and eBay which all have their own merits, Amazon and Shopify come out ahead as the clear winners in e-commerce today.
So what are the biggest differences between Amazon and Shopify. Well, there are a few key differences that define Amazon versus Shopify such as customization, ownership and traffic generation. Amazon FBA also makes a big difference in what’s needed to run the logistics end of your business.
Let’s look into these differences a little further. Even though Amazon and Shopify are generally considered “competitors”, they are two very different platforms.
Amazon is an online marketplace. You can list and sell your products on the marketplace, but in the end, your customers are still buying from Amazon dot com.
In comparison, Shopify is an end-to-end cloud-based platform, which provides the foundation for building and managing online stores. Shopify lets you create your own website, rather than listing and selling on another site, as you do with Amazon.
The biggest difference that comes with a marketplace like Amazon versus Shopify, a website builder, is customization and the flexibility to do what you want with your site.
Amazon gives you limited options for customizing product listings. They are slowly introducing more options for this such as Enhanced Brand Content, but at the end of the day, you need to create your product pages within a strict template.
Though you have clearly defined templates to work with on Amazon, the site has a proven track record of converting shoppers into customers. It also cuts down the time spent creating your product pages, with less design work necessary.
On the other side of things, Shopify lets you build your site however you like, with nearly 100% flexibility.
Shopify themes and plugins give you a lot of functionality and design options, even if you don’t know how to code. And if you do have programming knowledge or you can hire someone who does, you can customize your Shopify theme to make it exactly as you want it.
While complete freedom is nice to have, it also increases the chance you can get it wrong. A poorly designed store can easily turn customers away and hurt conversions.
In summary. Shopify offers much more freedom for you to build and design your store. However, this does mean it takes longer to create your store, and there’s more room to get it wrong with poor design. Amazon product listings are quicker to set up, and have a proven track record of conversion rate optimization.
Now, let’s move on to traffic generation? On Shopify, you’re responsible for every single customer who comes to your store. Meaning, if you don’t do anything to attract customers, no one will see your site.
In comparison, shoppers can find your products on Amazon through Amazon’s search engine. If your product pages are optimized for Amazon SEO, you’ll get passive traffic to your products from people already on the Amazon marketplace.
This allows you to run your business in a much more hands-off manner, as you don’t need to constantly manage and optimize traffic generation channels.
Amazon search has become more competitive over the years, so it’s not quite as simple as listing products and getting traffic. But an effective early launch strategy will kick a flywheel effect into action, which doesn’t exist with Shopify.
So in summary. Shopify requires you to attract every single customer yourself, while Amazon has an in-built traffic generation channel with Amazon search. If you are able to rank in the Amazon’s search engine, you’ll get passive sales and traffic, which is not possible with Shopify.
Another thing to consider is social proof. When you sell on Amazon, you’re essentially operating under the Amazon brand, as much as your own. While this is a negative in a sense, it also means you benefit from the trust their brand has with consumers.
Amazon is a household name in 2021. Shoppers feel confident buying products from Amazon. This level of trust, or “social proof”, helps you get more conversions.
If you sell on your own site, you’re an unknown. Shoppers need to trust you to make a purchase online, and they may not do so if they’ve never heard of your brand. As a result, many customers will feel safer going to Amazon and buying a product there instead.
So Amazon carries massive brand recognition and trust, which translates to your business when you sell on Amazon. In comparison, your brand is the only one shoppers see when you sell on Shopify, which may result in lower trust and fewer conversions.
What about ownership. On Shopify, you fully own your store. While Shopify does have an acceptable use policy, you can generally do what you want with your business. They’re not going to shut you down, unless you break one of these rules.
On the other hand, Amazon can shut you down at any time. Their rules are much more strict, and relate to what you can write on your product listing and how you communicate with your customers.
This means you don’t have complete control over your Amazon store, as Amazon controls whether you can sell your products on their marketplace.
You don’t have control over your customers either. Technically, when someone buys from you on Amazon, they’re Amazon’s customer, not yours. You’re not allowed to contact these customers afterwards, making it hard to build a list and utilize email marketing.
In summary, Shopify lets you fully own your store and your customer list, while Amazon ultimately controls all of this. Amazon can shut you down at any time if you violate their seller policies, which can be scary as a single-channel business owner.
One of the major differences is fulfillment and shipping channels. Amazon offers a service that handles all the storage, picking and shipping for you, known as FBA or Fulfilled By Amazon.
This takes a lot of tasks off your plate as an online store owner. It also gives you access to Amazon’s proven and efficient shipping network. This is a priority for shoppers today as nearly 80% of Amazon customers say they shop on Amazon because of the free and fast shipping available.
In comparison, when you sell on Shopify, you need to organize most of this for yourself. There are a lot of companies out there who can manage storage and fulfillment for you. However, the process is unlikely to be as streamlined as it is with Amazon FBA.
Shopify does have a new service called Shopify Shipping, which works a lot like FBA. It’s not as reliable and battle-tested as Amazon’s fulfillment network though.
So what shipping is concerned, you have access to FBA when you sell on Amazon, which is a great way to manage fulfillment and offer fast, free shipping. Shopify has recently launched their own shipping solution, but it is not as fast and reliable as FBA.
Now, before we move on with this comparison. As you can see, there are a lot of steps involved in building an Amazon business. And I wouldn't recommend piecing together everything by simply watching videos on YouTube. This is why I suggest investing your time in a great free training that can guide you through this process.
I recommend this training because this is the best training on the market and one that I have personally gone through. They walk you through every aspect of what it takes to start, grow and scale your Amazon business.
This training will build off of what I talk about inside my videos so I left a link for you in the description and if you're serious about selling on Amazon I encourage you to check it out!
Now, let’s move and talk about the cost involved with Amazon and Shopify. Both Amazon and Shopify require a subscription cost to use the platform. On top of this, there is a referral fee on each sale for Amazon, which can be substantial. Shopify doesn’t charge referral fees, but do charge payment and transaction fees.
So for the Amazon pricing & fees, there are two different selling plans on Amazon, with different levels of pricing.
The individual seller plan charges sellers $0.99 per item sold, plus referral fees ranging from 6 to 25% depending on the category.
The professional seller plan, which almost every serious business will use, costs $39.99 per month, plus the same referral fees based on the category. In addition, if you’re using Amazon FBA, you’ll have to pay fees for storage and fulfillment.
On Shopify, after a 14-day free trial, you’ll need to sign up for a paid plan to continue selling with Shopify.
The Basic Shopify plan costs $29 per month, which includes all the basic necessities for running an online store. For larger businesses, the next level up is $79 per month, while the Advanced Shopify plan is $299 per month.
Additional fees on top of the monthly plan include payment processing fees, ranging from 0.5% to 2% for third-party payment providers, and 2.4% to 2.9% for credit card payments with Shopify Payments.
You’ll also need to pay for shipping, storage and fulfillment, whether you handle this yourself or use the services of another company.
You’ll need to pay a subscription fee for each platform. Overall, Shopify’s fees are lower and more transparent than Amazon. However, consider you may need to spend money on traffic generation with Shopify, as well as paying additional staff for some of the tasks Amazon handles for you.
Let’s sum up the pros and cons of selling on Shopify versus Amazon. The pros are Amazon comes with a powerful traffic channel, Amazon search which gives you potential for passive traffic & sales.
The Amazon brand gives your products social proof. FBA offers streamlined, reliable storage and shipping and Amazon has a proven, conversion-optimized site design.
Amazon also has some cons such as you don’t have full ownership of your store, it’s hard to build a customer list, there is little design flexibility and they have high fees.
So what are the Shopify pros and cons? Well, you can design fully customizable stores with a wide variety of themes & plugins available.
You also have full ownership of your store & customers and flexibility to build a unique brand identity.
The cons of Shopify are that you have to drive all your own traffic, there is more work required to maintain your store. You need to use a third party for shipping & fulfillment and complete customization requires coding, excessive plugins can slow down your site.
But why not both? Selling on Amazon and on Shopify. Do you need to choose one or the other? Absolutely not. You can sell on both platforms, which is a good way to take the advantages of both Amazon and Shopify, and mitigate the risk of getting banned or suspended by Amazon.
For a new store owner just starting out, it might not be advisable to try and run an Amazon store and drive traffic to a Shopify site at the same time. However, you can launch on Amazon, and at the same time start building your Shopify store, so you eventually have a second sales channel to fall back on.
If you’re using FBA, you can also fulfill orders from your Shopify store from your Amazon inventory, using Multi-Channel Fulfillment. That’s all I have for you today, let me know in the comments below which route you plan on taking. Amazon, Shopify or both?
Thanks for watching and please make sure to watch the next videos with more Amazon FBA tips that will show up right about now.