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Amazon FBA vs Shopify – Which Should You Sell

Shopify One of the most important decisions you will make when selling your products online is choosing the ecommerce platform that will work best for you. It’s likely that when you are making this decision, you’ll look at Amazon FBA vs Shopify and wonder which you should use, as they are two of the most prominent players around when it comes to ecommerce.

Shopify

Amazon and Shopify have both built vast reputations, with Shopify powering over 800,000 businesses and Amazon receiving 2.5 billion visitors every month! For most entrepreneurs, these amazing stats make it a hard choice, as both platforms are reliable in the world of ecommerce.

What’s the Difference Between Amazon and Shopify?

Let’s consider these two platforms. The main difference between Amazon and Shopify may appear obvious, and to be honest, it is! Amazon is a ready-made ‘marketplace’ whereas Shopify focusses on you designing and building your store from scratch.

So, in other words, Amazon easily attracts buyers to its single online marketplace which allows you to reach millions of potential customers worldwide, while Shopify simply gives you the tools to build a stand-alone webstore rather than putting you in front of customers too.

This is the key difference, and so it might seem clear cut. After all, if Amazon already has a fabulous reputation and huge customer following which you can tap right into that’s the decision made surely?

Well, not entirely, because to access Amazon’s customer base, there is, of course, something that you must give in return. You will pay a percentage of every sale you make, to Amazon.

You will also have to abide by their rules as you would expect. Shopify on the other hand, although requiring you to market your store yourself once designed and built as there is no ready-made traffic, allows you to keep more of your sales profit as you won’t be relinquishing a fee. It’s a tricky one, isn’t it?

That’s why these key differences make it hard to compare Amazon and Shopify like for like. What you can discover through a comparison of Amazon vs Shopify is a better understanding of which platform will suit you and your specific business model.

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The Pros and Cons of Selling on Shopify

First, a little more about Shopify: it is, as you would expect, a leading ecommerce platform that allows budding entrepreneurs to start their online store without any technical experience.

Because of its simplicity, user-friendliness and host of design features, it’s an excellent place to start for those, including newbies, who want to launch an online business with very little skill. Shopify is all about building a premium quality webstore of your own.

This, of course, means that you won’t be competing directly with anyone else because the store belongs to you. While this sounds fun, remember that building your store will be exciting, but the real work begins when you understand that you must find customers and drive traffic to your store to make it work.

It has to be said that there are a large number of pros to choosing Shopify as your ecommerce platform.

Pros

  • Free 90-day trial
  • Easy to use
  • Flexible design
  • An affordable way to build your online store
  • Your store belongs to you
  • More control over your store
  • Access to powerful ecommerce tools and apps
  • Simple to create your unique brand identity
  • Mobile friendly store
  • Opportunity to build a substantial business
  • Free Shopify payments

In a nutshell: With Shopify, the pros just keep on coming! You can get access to the basic plan, design and build your store and trial it for 90 days completely free. During this time, you can use Shopify payments which also cost nothing so you’ll get a clear idea of exactly how a Shopify store can work for you. Because it’s such a flexible platform with access to ecommerce tools and apps, you’ll be able to build your brand identity from day one and expand very easily.

Cons

  • Marketing must be done yourself
  • Potential increase in marketing costs
  • No reputation to piggyback off
  • Monthly fees add up with the use of additional apps
  • Access to reports is not available with the basic plan
  • Transaction fees apply if using a third-party payment provider

In a nutshell: The most crucial aspect of Shopify to be aware of is the enormous job of marketing your store once it is built. Marketing is a full-time task, and you won’t have the reputation of a platform like Amazon to piggyback off so it will take time, effort and money to promote your brand and start getting sales.

You won’t see any reports on the basic plan either, so you’ll need to keep track of data yourself. Remember too that if you don’t use Shopify payments, you’ll incur a transaction fee on all your sales.

The Pros and Cons of Selling on Amazon FBA

Let’s now look at Amazon. Amazon is also a leading platform and pretty straight-forward to use, although listing a product and adding images can sometimes be time-consuming as there are lots of ‘back-end’ sections to complete.

Like Shopify, it’s the perfect place for newbies to start, especially those with zero technical experience. At this point, you may already be thinking that although Shopify has many pro’s, Amazon sounds like it could be the more comfortable option, after all, it offers FBA, a ready-made marketplace and of course a reputation beyond your wildest dreams. So, let’s see;

Pros

  • Free 30 day trial with a Pro account
  • Instant access to a global audience
  • Ready-made brand reputation
  • Setup and start selling immediately
  • Reach motivated buyers easily
  • Built-in customer service
  • Easy refunds and returns service
  • Sales reports data
  • FBA service available

In a nutshell: You can trial Amazon pro for 30 days allowing you to get to grips with setting up your product listings and start selling immediately to a worldwide audience. In reality, you could list a product and get your first sale within an hour!

If you choose to register using FBA, the setup process is longer as you’ll have to ship your products to a dedicated Amazon warehouse, but in doing so you cover not only your storage and fulfillment but Amazon will also deal with your customer service, any returns and refunds, so it’s completely hands-off for you.

Cons

  • Fees payable to Amazon for every sale (15% – 40%)
  • You must adhere to Amazon’s rules or risk suspension
  • It’s a highly saturated platform
  • No control over your store page
  • No design options
  • Undercutting tactics by competitors

In a nutshell: Amazon’s fees, while pretty reasonable bearing in mind that you reach a ready-made audience, can appear to eat into your profits quite dramatically. This, coupled with a highly saturated platform when it comes to some categories, restrictions and of course undercutting by competitors, could mean that the fees just aren’t worth the extra services offered.

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Video: Shopify vs Amazon Pros and Cons Review Comparison

Amazon Fees vs Shopify Fees

When it comes to comparing Amazon vs Shopify, it’s unsurprising that fees will play a big part in your decision-making process. Profit is critical to the success of your ecommerce business, and you want the best value. An Amazon pro account will cost you £25 + VAT per month, and typically your selling fee per item sold will be 15% on top of this.

If you use FBA, Amazon’s fulfilment programme, your platform costs will, of course, be higher – closer to 35% – as you will need to factor in storage and fulfilment costs as extras. These fees will vary depending on your product. So, as an example, based on the sale of a product at £29.99, along with your monthly account fee, you’ll pay £4.50 in selling fees for each product you sell. Using FBA, your selling and fulfilment fees will be approximately £9.90.

Shopify has three main pricing plans: Basic at $29 per month, Shopify at $79 per month and Advanced Shopify at $299 per month. The Basic package has everything you will need to begin with, apart from reports, and it’s roughly the same cost as Amazon, but you won’t have any additional charges unless you add on paid apps.

So, again, based on selling a product at £29.99 and using Shopify payments, your only fee would be the monthly plan cost. This sounds like a complete no-brainer, doesn’t it? But zero selling fees are only a benefit when you are making sales! So, the higher selling costs of the Amazon platform need to be weighed up against the traffic that Amazon provides.

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Overcoming Your Top Amazon FBA Selling Fears

In an excellent series of blogs, Stephen Smotherman from Full-Time FBA discusses how he overcame some of the biggest selling fears of Amazon FBA. Some of the fears covered in the series so far include getting suspended, pricing, paying for services, selling used items, moving into new categories and negotiating a better price.

Selling

1. “Tanking” Prices

Stephen advises that although prices will always be fluid, sellers can reduce the chances of their competition lowering their prices, through “making better sourcing decisions“.

When the demand for a product outweighs the supply, prices will increase. This is particularly true in November and December, where parents will pay over-inflated prices, to get their hands on the must-have toy in time for Christmas.

Repricing software can help manage your prices—ensuring you maximise your profits in situations where your competition sells out (p.s. here’s a handy tip for checking your competitors’ stock levels).

One of the biggest myths of selling on Amazon is that having the lowest price will mean you get the much-coveted Buy Box. This is simply not true; Amazon’s Buy Box formula is much more sophisticated and spread across a range of different seller metrics including feedback.

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2. Getting Suspended

One of the biggest seller fears currently is getting suspended by Amazon. Suspension can occur for two main reasons—performance and violation.

If your performance on Amazon slips, they may suspend you, in an attempt to keep the service levels extremely high across its marketplaces.

As a seller on Amazon, you’re a guest in their house—and this means you need to abide by their rules and regulations, the ones you agreed to when you signed up. If not, you may land yourself in hot water.

Stephen has offered nine ways to increase your chances of not getting suspended. However, if you do find yourself faced with this nightmare seller scenario, you’ll want to know how to appeal and get your selling account reinstated ASAP.

What to Do If Your Amazon Account Gets Suspended

3. Paying for Services

Whether it be repricing, feedback removal, or scanning apps, many sellers view paying for services as extras that eat into their profit margins.

Unless it is a task you enjoy, you should “consider outsourcing various aspects of your business”, to save time whilst potentially increasing sales and profits.

Whilst sellers can spend a few hours each day manually repricing, couldn’t this be time better spent on other areas of your business or with family and friends. And, even if you attempt to manually reprice, there’s no way you can do it as quickly and effectively 24/7, like many repricing solutions. See more reasons why FBA sellers should use Amazon repricing software from FBA seller, Jeff Roth.

Most services offer free trials. RepricerExpress, for example, offers a no-obligation free 15-day trial for sellers to experiment with our software and see if it is right for them.

4. Selling Used Items on Amazon

By not selling used items, many merchants are essentially “leaving money on the table”. Although new items will make up the majority of most sellers’ stock, selling used items can be profitable, if done the right way.

In his examples of successful reselling of used items, Stephen purchased a board game for $2, which he sold for $40. Later, he purchased a box of used books, which he then sold individually for a tidy profit.

Reminder: If you’re selling used items on Amazon, they should be complete and in working order.

5. Branching Out into New Categories

Many FBA sellers will start out selling books or toys before thoughts of expansion enter into their minds. Should l sell in the new “hot” Amazon category? What profits will l make?

Diversifying your inventory can help your ecommerce business—as the saying goes, don’t put all your eggs in one basket. You may lack experience of selling in a new category and will no doubt learn some lessons on-the-job from trial and error.

However, by arming yourself with knowledge of these new selling categories through ebooks, guides, Facebook groups, blogs and forums, you can put yourself in a stronger position.

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6. Negotiating a Better Deal

Most (if not all) sellers are in the ecommerce world to make money. One way you can increase your Return on Investment (ROI) and profits is by negotiating a better deal with your suppliers.

Stephen discusses four common seller fears in negotiation scenarios and offers some helpful advice to help you overcome your fears. You should be friendly and approachable and when presenting your offer, show how it will benefit the customer.

Finally, don’t forget to leave your contact information, you never know when they might call or email with a great deal.