Shopify vs Amazon FBA: Which Platform Should You Use?

When deciding which e-commerce platform to use for your business, you will likely encounter two of the most prominent players, Shopify and Amazon FBA, as they are the key platforms on which many online stores are created. 

This article will compare Shopify to Amazon FBA and their features, ease of use, cost, market reach, and particular advantages and disadvantages of each platform to help you decide which platform is best for your e-commerce business.

An overview of Shopify and Amazon 

Amazon is an open store platform for selling products, offering access to millions of customers. Conversely, Shopify is an e-commerce software that helps merchants set up online stores and comes with a range of customisation options. 

Shopify better fits companies with hundreds to thousands of employees or stores and small to midsize businesses wanting more control over branding and customer experiences. In contrast, Amazon is better suited to independent sellers and companies wishing to access a massive customer base and fulfilment centres.

Features and Tools

Key features and tools offered by Shopify

Shopify offers many key features and tools, making it one of the most popular e-commerce platforms. Some of the key features include:

• Storefront Themes & Customisation: Customers are offered a huge collection of professional, mobile responsive and easily customisable storefront themes. 
• Shipping & Security: Shopify provides automatic shipping rates from major shipping carriers, handles country and state tax rates automatically, and offers a free Secure Sockets Layer (SSL) certificate for every store. However, it is up to the store owner to ensure orders are successfully fulfilled. 
• Abandoned Cart Recovery: Shopify supports abandoned cart recovery features that help track and remind customers to complete their purchases.
• Payment Gateway: Over 70 payment gateway integrations are available, and it offers its own payment gateway powered by Stripe, which does not charge transaction fees.
• Marketing & SEO: Shopify offers SEO services, encourages product reviews, and offers various sales channels, such as Facebook shops, Instagram Shops, and Pinterest.
• Product & Inventory Management: Shopify provides real-time inventory tracking and management, which the merchant can monitor.
• Analytics: Shopify provides actionable dashboards for key analytics like orders, sales reports, and online store visitor data.

Key features and tools offered by Amazon FBA

In comparison, Amazon FBA offers similar features but to different extents. Ultimately, those who choose to use Amazon FBA can rely more on Amazon services than on their own responsibilities when using Shopify. 

• Online Marketplace: Amazon is the largest marketplace for listing and selling products. Although there are no storefront customisation options available on Amazon, sellers can boost their visibility using this platform. 
• Order Fulfilment: Unlike Shopify, Amazon FBA offers complete order fulfilment, from accepting payment to packaging products, shipping, and delivering to customers. FBA also allows sellers to fulfil orders from other sales channels, like their websites or other marketplaces, not just Amazon.
• Targeted Ads: Amazon primarily relies on retargeting with ads to win back customers who have abandoned their carts rather than sending abandoned cart emails.
• Simple Checkouts: Amazon uses its payment gateway, Amazon Pay, which accepts all major credit and debit cards as well as Amazon vouchers. This option is ideal for sellers who want to simplify their payment acceptance processes.
• Inventory Management: One key feature of Amazon FBA is inventory management on behalf of the seller. Amazon handles product storage, warehousing, and inventory monitoring. 
• Product Listing Rankings: While Amazon offers no SEO services, sellers can pay to have their products featured in specific search results. Agencies like Mercatus also specialise in Amazon product rankings to help sellers boost online sales through the platform. 
• Customer Service: Amazon provides 24/7 customer service for FBA orders, handling returns and refunds on behalf of the seller.

Ease of Use 

Shopify

The Shopify dashboard presents a clean, organised interface that makes navigating and managing all aspects of your online store easy. Creating a new product, customising your storefront, and setting up shipping and payment options are relatively straightforward. Shopify’s drag-and-drop page builder allows you to easily customise your website’s design without writing your own code, which is ideal for those setting up their first online store. 

The platform also has over 6,000 apps available, offering extended functionality for businesses, whether integrating with social media platforms, automating marketing tasks, or enhancing how customers experience your online store.

Shopify offers excellent customer support, with 24/7 access to live chat, email, and phone assistance for those who need help setting up their store. However, given Shopify’s more versatile functionality, their response times can sometimes be much slower. There are also ample tutorials and professional resources available for store owners. 

Amazon 

Amazon’s Seller Central platform is also designed with user-friendliness in mind and is suitable for any product seller. The dashboard provides a clear overview of your sales, inventory, and account health, making it easy for sellers to stay on top of business operations.

The product listing process is also very straightforward. Amazon has a built-in guide that takes you through the necessary steps, from providing product details and images to optimising your listing for search. Integrated AI tools also help assess the quality of your listings and ensure they align with your brand. 

However, the sheer scale of the Amazon marketplace also means that sellers need to be proactive about optimising their product listings. This can require a steeper learning curve for some sellers, especially those new to selling through Amazon. Third parties like Mercatus can help with regular monitoring. 

Shopify vs Amazon user-friendliness

Shopify generally offers a more streamlined and user-friendly experience when setting up an online store. The platform’s intuitive drag-and-drop editor and pre-designed templates make it easy to create a professional-looking website without any coding knowledge.

In contrast, setting up an Amazon seller account and optimising product listings can be more time-consuming, as sellers need to understand and implement the platform’s specific requirements and best practices. However, sellers do not need to concern themselves with customising their own store, saving time in this regard. 

Shopify may be the more user-friendly option for sellers looking to build a more brand-specific online store. At the same time, Amazon is very useful for sellers who want to tap into the platform’s vast customer base and take advantage of the perks that come with FBA.

Cost and Pricing

Shopify Pricing

Shopify offers several pricing plans for online sellers. The plans differ in price depending on the features required by the seller. 

• Shopify Lite ($9/month): This version allows sellers to integrate their social media platforms like Facebook and Instagram to boost their sales and sell directly through these platforms. Standard order management, including payment acceptance, customer invoicing, and shipping management and tracking, is also included in Shopify Lite. Transaction fees are 2.9% + $0.30 for online sales and 2.7% for in-person sales. 
• Basic Shopify ($29/month): This option provides sellers with more features, including a customisable online store, blogging capabilities, SSL security, and detailed business reports. There are applicable transaction fees of 2% for any sales that aren’t completed through Shopify. Sellers can expect transaction fees of 2.9% + $0.30 per online transaction when using Shopify Payments and 2.7% per in-person transaction using Shopify POS. 
• Shopify Plan ($79/month): This provides a full-featured online store with advanced selling tools, reporting, and lower transaction fees than the Basic plan. The main additional costs are the 2.6% + $0.30 per online sale and the 1% fee for using a third-party payment processor. 
• Advanced Shopify ($299/month): The Advanced plan provides sellers with the most features and lowest transaction fees of all Shopify plans, making it well-suited for high-volume merchants looking to boost their online store. The key costs are the 2.4% + $0.30 per online sale and the 0.5% fee for using any external payment processor.

Amazon Pricing 

The Amazon pricing structures work slightly differently, focusing more on the items sold. The plans offered to sellers by Amazon are as follows: 

• Individual Selling Plan ($0.99/item sold)
• Professional Seller Plan ($39.99/month) with the addition of referral fees, which are usually between 8-15% of the sale price, chargeable per item sold. 

Amazon FBA has additional pricing structures that merchants should consider: 

• Fulfilment fees: These can be anywhere from $3.22 to $179.28+ per unit, depending on product size, weight, and category. They are in place to cover storage, picking, packing, and shipping. 
• Storage fees: Merchants are charged $0.56 to $3.34 per cubic foot per month, depending on season and product size. Additional fees may be charged for long-term storage.
• Inbound placement service fee: This is charged to the merchant or seller at $0.27 per unit for standard items and $1.58 for large or bulky items. 
• Aged inventory surcharge: Amazon FBA will charge you for inventory that’s remained in storage facilities for extended periods. These fees range between $0.50 to $6.90+ per cubic foot item, season-depending. 

Market Reach and Sales Potential 

A key draw to both platforms is their extensive online market reach and tool integrations to help sellers shift their products. Sales potential heavily depends on the amount of time a seller is willing to put into managing their e-commerce activities. However, each platform offers different features that can work well together for online sellers.  

Shopify reach and potential sales 

Shopify has an impressive customer base, with over 1.7 million using the platform in around 175 countries. It’s ideal for those who want to break into the international market, as it’s available in multiple languages and currencies, allowing merchants to sell to customers globally. Sellers should also consider the platform’s rapid expansion, with its merchant base increasing by over 20% year over year. 

Market reach is also increased through Shopify, given the integrations allowed on the platform. Shopify enables merchants to sell across multiple channels, including online stores, social media, marketplaces, and physical retail. This omnichannel approach expands the sales potential for e-commerce sales.

As far as sales potential is concerned, Shopify has certainly attained some substantial figures proving its effectiveness as an online sales tool. In 2022, Shopify’s merchants generated over $175 billion in gross merchandise volume (GMV), demonstrating the significant sales volume flowing through the platform.

Amazon reach and potential sales 

As the largest online marketplace, selling on Amazon can be hugely beneficial to sellers. Amazon has over 200 million Prime members worldwide, giving sellers access to a huge potential customer base worldwide. 

Amazon also demonstrates very rapid and consistent growth with net sales increasing at a compound annual growth rate of over 27% in the last five years, indicating strong and consistent sales potential for sellers who choose to utilise the online marketplace to sell their products.

It’s also an ideal platform for sellers given its algorithms that are constantly updating to accurately categorise a wide range of products. Shoppers can buy anything from electronics and apparel to home goods and groceries, allowing sellers to tap into diverse consumer demand.

Amazon vs Shopify: Market reach and sales potential

Amazon benefits from its massive customer base and brand recognition, making it easier for sellers to reach potential customers. Shopify merchants need to drive traffic to their own stores. However, Amazon is only operational in 20 countries at present, meaning the international sales reach is probably better with Shopify. 

Amazon’s massive customer base, dominant marketplace position, and fulfilment capabilities provide significant sales potential for its sellers. Shopify, on the other hand, offers a more customisable platform with lower transaction fees, possibly better suiting merchants who want to prioritise building their own brand and online presence for specific target audiences.

Pros and Cons of Amazon vs Shopify

There are, of course, pros and cons that come with each platform. These are summarised below. 

Advantages of using Shopify

• It is a user-friendly platform with an intuitive dashboard and drag-and-drop customisation, perfect for those who want to create an online brand presence. 
• Extensive app ecosystem with over 6,000 apps to extend functionality within the online store and integrate with other marketing tools and social media. The platform also offers SEO services to boost rankings.
• Shopify offers the option to customise CSS and JavaScript with support should the available themes not suit the seller. 

Disadvantages of using Shopify

• Unlike Amazon’s built-in customer base and integrated listing optimisation tools, merchants need to drive traffic to their own stores. 
• Merchants are responsible for their own fulfilment and logistics, unlike Amazon’s FBA services, which complete the process for sellers. 
• Sellers are also responsible for learning about running a fully functioning online store. 
• Slow response from customer service. 

Advantages of using Amazon

• Very easy to set up listings, given the user-friendly built-in guide. 
• The online marketplace is laid out to boost sales conversions. 
• Massive customer base with over 200 million Prime members worldwide. 
• Dominant marketplace position, accounting for a large chunk of total global online sales. 
• Extensive fulfilment network with FBA handling storage, picking, packing and shipping on behalf of sellers, helping sellers’ businesses grow. 
• Easier customer acquisition for sellers due to Amazon’s brand recognition and traffic. 
• Sellers can use Amazon’s reputation for trust and reliability when marketing their products. 

Disadvantages of using Amazon

• Less control over branding and customer relationships compared to Shopify. 
• Strict policies and guidelines that merchants must adhere to. 
• Potential for account suspensions due to policy violations or customer complaints. 
• Limited to customers in countries where Amazon is operational. 

Conclusion 

As an e-commerce merchant, there are many aspects you need to consider when choosing a platform to sell through. Amazon and Shopify are both excellent choices. However, you may need to be selective based on how you want to drive sales. 

Ascertaining which platform is more appropriate will also depend on the stage at which your business is. For beginners, a platform like Amazon may be better suited. However, for those wanting to boost sales as well as build a brand, a platform that offers customisation, like Shopify, may just be the perfect fit. 

By optimising product listings, advertising, and fulfilment on both Shopify and Amazon, merchants can maximise their sales potential. Working with experienced Amazon consultants, like those at Mercatus, can help sellers boost Amazon sales for your business.