In the competitive world of ecommerce, choosing the right marketplace for your brand is akin to selecting the perfect stage for your performance. As a dedicated DTC brand owner who exclusively operates on Amazon, have you ever wondered if there’s a viable interest in exploring other platforms like Shopify? In this post, we’ll embark on a journey to compare two formidable ecommerce giants – Shopify and Amazon – offering insights, statistics, and real-world examples to help you make an informed decision that aligns with your brand’s growth objectives. It’s your choice to embrace both platforms or just operate in one of them. Us, for example, at Recontour, use one platform for a brand or multiplatform for other brands, depending on audiences and type of products.
Unveiling the Numbers: Amazon vs. Shopify
Let’s start diving into some statistics that provide a glimpse into the influence and reach of both Amazon and Shopify:
Amazon’s Gross Merchandise Volume (GMV) for Q2 2023 amounted to a staggering $530 billion*, reflecting its monumental presence in the global ecommerce landscape.
A survey by Jungle Scout revealed that 45% of Amazon sellers make $1,000 to $25,000/month, showcasing the potential for profitability within Amazon’s vast ecosystem.
Shopify’s total revenue for Q2 2023 grew 31% to $1.69 billion, highlighting its consistent growth and popularity among ecommerce entrepreneurs. Its GMV for Q2 reached $55 billion.
There are more than 4.3 million Shopify stores currently online across 175 countries.
Comparing Amazon and Shopify: Finding Your Perfect Fit
Now that we have a grasp of the numbers, let’s dive into a comprehensive comparison between Amazon and Shopify, addressing key factors that shape your choice.
1. Audience reach and traffic:
Amazon. The ecommerce giant draws a massive stream of traffic, with millions of users actively searching for products daily. By selling on Amazon, you can tap into the traffic generated by Amazon’s strong brand and consumer mindshare.
Shopify. While Shopify offers a robust platform, generating traffic requires focused marketing efforts to attract visitors to your standalone store. This traffic is generated through a combination of advertising and brand building efforts.
2. Brand control and customization:
Amazon. While Amazon provides immense exposure, brand customization is limited within their framework. Let’s be clear: customers at Amazon are theirs, not the sellers’. So it is important, if you decide to go on Amazon, to generate dynamics that allow you to know better who your customers are, as the interaction with them is limited by Amazon.
Shopify. Shopify empowers you with full control over your brand’s appearance and identity, allowing you to create a unique online store. Here, you control the relationship with your customers as well as the interaction with them. With Shopify you have an amazing opportunity of building a community of customers who love your brand.
3. Fees and costs:
Amazon. Amazon provides the most advanced ecommerce platform in the world and reach to a huge potential customer pool and that, for sure, takes a cost. Amazon charges referral fees, fulfillment fees, and subscription fees for its Professional Selling Plan, as well as FBA fees and FBA storage fees. The average 15% commission on product sold is just the starting point of the fees you pay to Amazon depending on how you interact with the platform. A decade ago, it was not unheard-of for successful sellers to make a fortune without spending anything on advertising. However, nowadays, spending Amazon PPC advertising is an absolute must for competing on the platform. For example, it’s not uncommon to spend 10 to 25% of your revenue in advertising.
Shopify. Shopify’s pricing structure includes subscription fees, transaction fees, and optional app costs. The Basic Shopify plan charges 2.9% + $0.30 per transaction, while the Advanced Shopify plan drops just half a percentage point to 2.4% + $0.30.
While that sounds that Shopify is much lower than Amazon, there are two ideas that you must take into consideration. Firstly, you need to generate traffic to your Shopify shop, whereas in Amazon, you have the huge Amazon traffic ready to go to your store. Secondly, Shopify has a vast ecosystem of apps to enhance you store and many require a subscription. There are over 6,000 apps available on the Shopify App Store and Shopify merchants have installed over 1 billion individual app subscriptions.
4. Customer loyalty and engagement:
Amazon. There is a magical word: trust. When you sell on Amazon, you are on Amazon ecosystem and, therefore, within its reputation shield. Amazon Prime’s loyal user base offers an opportunity to tap into a captive audience that values convenience and fast shipping and, what’s more important, a high degree of confidence in shipping speed.
Shopify. Building a loyal customer base requires personalized marketing strategies to foster engagement and repeat business. Here, you have to work really hard to create that level of trust with your customers.
5. International expansion:
Amazon. Amazon’s global reach offers access to international customers and fulfillment services through Amazon Global Selling.
Shopify. Shopify’s international capabilities provide flexibility in reaching global markets, though logistics and localization efforts are more hands-on.
6. Data and analytics:
Both offer a broad selection of data and analytics capabilities. The biggest difference is that Amazon conceals many important customers details.
The decision between Amazon and Shopify hinges on your brand’s unique objectives, values, and growth trajectory. If you’re seeking unparalleled exposure, access to a massive customer base, and streamlined fulfillment, Amazon might be your go-to choice. On the other hand, if you yearn for greater brand control, customization, and the potential to build lasting customer relationships, Shopify offers a platform that grants you strategic autonomy and independence.
Ultimately, there’s no one-size-fits-all answer. Your brand’s DNA and aspirations will guide your choice, and exploring the merits of both Amazon and Shopify can help you chart a course towards ecommerce success tailored to your unique vision. Remember, your brand’s story deserves a stage that amplifies its voice and resonates with your audience, ensuring that your journey in the digital world leaves an amazing impression.
RECONTOUR is an ecommerce aggregator company, born with the aim of transforming the world of e-commerce, focusing on growing consistently small-sized, high growth potential brands crafting long-term successful commerce stories.
Recontour team manages 6 brands and more than 85 SKUs and operates in more than 30 markets.
At Recontour, we are committed to create strong relationships with our sellers, employees, investors and customers.