Considering Amazon FBA versus Shopify for your eCommerce operations?
When you sell online, you’ve got so many places to peddle your wares. From Instagram to eBay and everything in between, plenty of readymade platforms are available to host your eCommerce operations.
Every eCommerce seller has their go-to faves, but to us, Amazon FBA and Shopify are clearly the frontrunners.
Although they’re both huge players in the space, they’re surprisingly different from each other.
Everything from pricing to features to setup is different. So, when it comes down to choosing between Amazon FBA versus Shopify, it’s about your preferences and business structure.
The good news is that you can make money on either platform.
Both require a monthly fee plus other “gotcha” charges, so weigh the pros and cons of Amazon FBA versus Shopify to know what’s right for you.
Shopify is a platform where you build a website and source traffic yourself. It’s basically a website hosting platform with a lot of cool eCommerce features. Amazon FBA, on the other hand, gives you access to millions of shoppers and helps with fulfillment.
Whether you’re a growing business or you’ve been around the block a few times, you need to understand the benefits of Amazon FBA versus Shopify.
Let’s dig into what each platform is, their 6 big differences, and how you can actually combine the two for more eCommerce success.
What is Shopify?
Shopify is an eCommerce platform that hosts your eCommerce website. It’s a WYSIWYG (What You See Is What You Get) type of service where you can easily make an eCommerce website and store without any coding knowledge.
Shopify doesn’t require any technical expertise to get started, so if you cringe at the thought of hiring a web developer but still need a website, this is a great option.
Oh, and did we mention that Shopify’s websites are super good-looking?
Yes, they’re made mostly via a drag-and-drop builder, but their clean, modern design and pre-built templates help you get up and running fast.
Shopify isn’t some small, rinky-dink eCommerce platform, either. Just look at the numbers:
- Over 820,000 merchants use Shopify right now in 175 countries.
- Shopify is the third-largest online retailer in the US, coming in third behind Amazon and eBay, respectively.
- To date, the platform has processed over $100 billion in sales.
Shopify is great if you don’t have an existing eCommerce presence and want to go legit with your brand.
However, because you’re building a website from scratch, you’re on the hook for handling:
… and more. Naturally, you can hire third-party applications to help with these things, but if you’re small and scrappy, know that Shopify websites can require more hands-on time.
We recommend Shopify if you have marketing chops, hate competition, and like having a greater degree of control over your business.
What is Amazon FBA?
While Shopify is a platform for building a cloud-based website, Amazon FBA offers an entirely different set of features and benefits.
You can’t use Amazon FBA to create a website. You just join the Amazon platform by creating a Seller account. So, if we’re being honest, it’s not fair comparing Amazon FBA versus Shopify because they’re completely different things.
Still, Amazon FBA is a robust option for eCommerce pros who want to make a lot of money:
- Amazon is gigantic. It accounts for 45% of all eCommerce spending in the US. That makes sense, though, considering that one-third of all US citizens have an Amazon Prime account.
- Amazon earned $280.5 billion in 2019 alone, and it’s estimated that the platform rakes in $283,000 in sales every 60 seconds. Wow.
- 50% of all Amazon sales come from third-party sellers (that’s you!).
eCommerce sellers love Amazon because shoppers go there when they’re ready to buy.
Amazon has basically done all of the marketing for you, putting your product in front of thousands of shoppers at the right time.
Of course, you’ll still have to master Amazon SEO, but that’s still a lot easier than marketing a Shopify website from scratch.
Shoppers go to Amazon not to browse, but to buy stuff. If you’re sick of abandoned carts and are ready to make sales, Amazon FBA is a great option.
The thing is, you need to realize that an Amazon seller account gives you the option to enroll in Amazon FBA, or Fulfilled By Amazon. Here’s how it works:
- You ship your inventory and pay to store it in an Amazon warehouse.
- When a shopper orders your products on Amazon, the Amazon warehouse will package and ship the item.
- If there’s an issue with tracking or customer service, Amazon FBA will handle it on your behalf.
- As an FBA seller, your products will display to Prime members looking for 2-day shipping. It will also show the “Fulfilled by Amazon” label on your product listing page.
Sounds too good to be true, right? Well, Amazon doesn’t offer FBA service out of the kindness of its heart.
You can expect to pay a per-unit fee per item sold, plus warehousing fees, shipping costs, and your seller membership fees.
When it comes down to choosing Amazon FBA versus Shopify, we recommend Amazon FBA to new sellers who need a ready-made customer base. If you don’t mind competitors displaying next to you, you need sales quickly, you like how hands-off FBA makes your business, or you want help marketing yourself, consider going with Amazon.
6 differences between Amazon FBA versus Shopify
Fortunately, it’s hard to make a bad decision here. Both Amazon FBA and Shopify offer clean design and a great shopper experience.
But we know you’re here for guidance, so if you’re trying to choose between Amazon FBA versus Shopify, understand these 6 big differences between the two platforms.
1 - Pricing structure
Unfortunately, you’re gonna fork over a good chunk of cash whether you go with Shopify or Amazon FBA. Platforms need to make money, after all. Here’s a breakdown of the costs between Amazon FBA versus Shopify.
- Monthly membership fees: The Basic plan starts at $29/mo, but we recommend the Shopify plan at $79/mo. This is the best value for the money because it includes reports, more staff accounts, additional locations, and USPS shipping labels. Whatever you do, remember to take advantage of their free 14-day trial first.
- Payment processing rates: Depending on your monthly plan, you’ll pay 2.4% - 2.9% per transaction, plus 30 cents. At a higher membership tier, you get a small break in processing fees, but it’s pretty modest.
- Monthly membership fees: You can start out with an Individual Selling account where you pay $0.99 per item sold. But if you sell over 40 items per month, you’ll need to sign up for Amazon’s Professional Selling membership, which is $39.99/mo.
- FBA-related fees: If you’re using Amazon FBA, you’re getting a lot of additional help, but that does come at a cost. You can expect to pay fulfillment fees and storage fees on top of your monthly membership. The exact costs depend on the time of year as well as the size and volume of your products.
Generally speaking, Amazon FBA can cost you up to 40% of every sale you make after all of the fees.
That’s a deal-breaker for some sellers, but for others, the increase in sale volume easily makes up for the additional fees.
Whip out your calculator to see which platform is best for your business. Although Shopify’s pricing is usually more affordable, some sellers prefer the extra help that comes with Amazon FBA, even if it means paying more.
How can I lower my Amazon FBA fees?
But what happens if you really, really like the idea of Amazon FBA but hate the fees?
Well, you can’t do Amazon FBA for free, but you can try a few hacks to reduce your FBA fees to make it the more attractive option, like:
- Reducing your product size: Amazon charges by product size and volume, remember? So, if you can make either your product or your packaging smaller, you can cut down on the number of cubic feet you’re paying for warehousing.
- Sell pricier items: It generally doesn’t make financial sense to sell items cheaper than $15 because of FBA fees. Make sure you’re turning a profit on your FBA items.
- Outsourcing fulfillment: You don’t have to use Amazon FBA. Shop around to see if there’s a cheaper fulfillment option.
- Watching the calendar: Amazon warehouse fees spike in Q4 because of holiday shopping. Be prepared to spend a lot more on FBA during these busier months.
- Selling bundles: The faster you move your inventory, the less you have to pay to store it! Some sellers move units more quickly by selling two-packs or products in multiple colors.
- Optimizing your product listing pages: Amazon CRO is a discipline by itself, but it’s worth your time. When you make more sales at higher margins, it makes more sense to pay Amazon’s FBA fees.
It’s hard to lower your Amazon FBA fees, but it’s possible! Strategize your move to the platform to keep fees as low as possible.
2 - Control over your products and branding
Amazon FBA draws in a ton of shoppers, helping you reach millions of people quickly.
But there’s a huge downside: you basically have to sell your soul to Amazon to make any sales.
Nobody likes restrictions, and boy, does Amazon have a lot of rules for its third-party sellers. Amazon keeps a tight leash on its third-party sellers with rules like:
- No incentivizing customer reviews.
- No communicating with buyers outside of the Amazon platform, including email marketing.
- Tight referral fee requirements.
- Every image or video you upload to the platform becomes the intellectual property of Amazon.
- Amazon can increase or decrease your prices as it sees fit.
If you step out of line, Amazon can suspend or permanently ban you from selling on the platform. It can even dictate what products you sell on other marketplaces and how you can price those products, so Amazon still owns you if you sell on other platforms, too.
But that’s not all—Amazon is also limiting from a branding perspective.
You can customize your Amazon account a little bit, but it’s not the same as branding your own website.
Shopify, on the other hand, puts you in the driver’s seat. If you’re a control freak, you might prefer Shopify because:
- Its pre-built website templates are totally customizable. Create the exact layout and look you’re going for.
- There are very few rules. Treat your customers well and don’t do anything illegal; that’s about it.
- You control how you promote yourself, including discounts and marketing.
- You can add or remove functionality on your site with Shopify apps to get the exact features you need.
Some eCommerce businesses will gladly follow Amazon’s strict rules in exchange for more sales. But that’s not always a smart move, so carefully choose between Amazon FBA versus Shopify to protect your brand integrity.
3 - Amazon FBA versus Shopify marketing
A big difference between the two platforms is the level of hands-on marketing required to make sales.
Because shoppers love Amazon, you don’t have to work as hard to source traffic. Users search for your products on the Amazon search engine and buy if they like what they see—it’s that simple.
Amazon draws in millions of shoppers every day.
Yeah, you have to sell your soul to their Terms of Service, but if it means raking in millions of dollars, it can be worth it.
Bottom line: Amazon does a lot of promotion and marketing for you because it gets a healthy cut of all your sales.
When you go with Amazon FBA, you don’t need to worry about marketing tasks like:
- Review collection
- Featured products
- Recommended products
You still might want to look into marketing yourself with lightning deals and sourcing user-generated content from your shoppers, though.
Shopify, on the other hand, is just like a regular ol’ website.
You get access to some awesome tools to help grow your business, but you’re on your own when it comes to marketing the biz.
That means mastering skills like:
- Email marketing
- Social media
- Influencer marketing
- Customer reviews
- Pay-per-click marketing
You can also expect to pay more money for tools or outsourcing if you take the Shopify route, which can increase your costs.
Marketing yourself does cost money and time, so if you aren’t already savvy in digital marketing, you might prefer Amazon FBA.
4 - Level of competition
There are a lot of great things about Amazon, but its layout is a big drawback for sellers.
Any time a user searches for a product, your product might display. That’s great, right?
Well, your products display next to all of the other competing solutions in your niche. That distracts shoppers from focusing on you, and instead on price comparisons. Amazon is often a race to the bottom for that reason, undercutting prices and slashing your margins.
Amazon repricing software can help with this, but still. It’s not fun competing against thousands of other sellers on every single sale.
Shopify is nice because the focus is on your brand and your products. You might not get the same amount of traffic as you would on Amazon, but by golly, you know shoppers will stay focused on you. If you’re selling a luxury item where price perception is important, Shopify might be the better option.
5 - Available tools on Amazon FBA versus Shopify
Both Amazon FBA and Shopify offer some pretty sweet tools to help you make more sales.
The right platform for your biz depends entirely on which tools will give you the most value.
For Amazon, the FBA service is hands-down a huge benefit. They help you deal with:
- Customer service
Yes, you’ll pay higher fees, but for eCommerce pros who want to deal with less of the minutiae of running an online store, FBA is a great asset. This is better suited for folks who want money to roll into their account with less fuss.
As long as you’re seeing ROI on your FBA fees, we say go for it.
Although Shopify requires more DIY, its app marketplace is a huge help. Yes, you need to handle shipping and customer service yourself, but you can outsource it to an app to relieve the pressure.
Shopify does include reports, payment processing, and website design out of the box, but the app marketplace means you can customize your operation to your heart’s content.
- Cart abandonment
- Logo creation and branding
- Inventory tracking
87% of Shopify merchants use apps, so don’t be afraid to extend the functionality of your site. Keep in mind that many apps require a paid subscription, which can increase your costs if you aren’t careful.
6 - Seller support
This is a small consideration, but if you ever have an issue with your eCommerce store, it can make a huge difference. Consider the differences between Amazon FBA versus Shopify when it comes to seller support.
Shopify is the clear winner here because it offers 24/7 phone support and even live chat.
Amazon is a huge corporation, so you can’t really pick up the phone and call them. They do have a robust forum that will probably solve your questions, though, as well as decent live chat offerings.
Amazon FBA versus Shopify: Can I just use both?
We’ve pitted Amazon FBA and Shopify against each other here, but there’s good news: both are great! If you’re new to eCommerce and need to start your shop ASAP, both platforms will help you get started.
Fortunately, you don’t have to choose between the two platforms. Actually, we encourage eCommerce sellers to sell on more than one platform. What would you do if Shopify went offline? Or if Amazon gets shut down?
You never want to keep all of your eggs in one basket, so remember to diversify your platforms.
Combine both Amazon FBA and Shopify to take advantage of features that the other platform might not include. That might mean creating a Shopify website to prove you’re legit and tapping Amazon’s huge marketplace with a simple Shopify integration.
To use both Amazon FBA and Shopify, you’ll need:
- A Shopify account.
- A Professional Amazon account.
- Uploaded products. Make sure your Shopify listings display exactly how you want them to look on Amazon. The integration will simply pull the listings as-is from Shopify to Amazon, so make any necessary tweaks before integrating.
- An integration. Shopify integrates natively with Amazon FBA, so follow these instructions to sync your two accounts.
We make this sound easy, but selling on both Amazon and Shopify is a more advanced option.
You need to have the infrastructure in place to handle multiple platforms at once and have to pay fees on both, so slow down, eager beaver.
Try starting with Shopify first. Once you’ve got your eCommerce sea legs, integrate your shop with Amazon FBA to make a name for yourself on Amazon’s huge marketplace.
So, in the fight between Amazon FBA versus Shopify, what’s the best option for your business?
We’d love to give you a black-and-white answer, but that’s just not how this works. There are pros and cons of both platforms, so your choice depends on your talents, risk tolerance, and business structure.
Pick the platform that accomplishes more of the tasks that you hate doing.
Hate rules? Go with Shopify. Despise marketing yourself? Amazon FBA is better.
While you can certainly combine the two platforms, you may need to choose between Amazon FBA versus Shopify, especially in your early days. But remember that eCommerce is about diversification and scalability, so if it’s time to grow, make it happen by embracing both platforms.
Whether you’re on Shopify or Amazon, you’ll still want to promote your products to interested shoppers. Take the headaches out of the marketing process by partnering with an influencer marketing platform like Trend. We streamline the influencer marketing process to make eCommerce ROI a breeze. Sign up for your free account now.