Amazon’s near-monopoly in eCommerce has troubled small businesses for years. With the coronavirus forcing countless merchants to move online, small retailers’ battle with Amazon has become more prominent than ever. Amid this, Shopify has emerged as an effective weapon powering small and medium enterprises worldwide. This Amazon vs Shopify faceoff is prompting new dynamics in digital commerce.
Before the rise of Shopify, small and medium sellers had to choose from either of the two paths: list products on marketplaces like Amazon or sell directly to customers. Opting for the latter meant fewer sales. Besides, merchants had to rely on advertising and word of mouth. But that changed with the emergence of Shopify. With Shopify, small businesses are now striking back at Amazon and other eCommerce giants, The Wall Street Journal reported. Let’s dive deeper to understand the now-global Amazon vs Shopify battle.
Discussion on the Current Scenario of Amazon vs Shopify
Let’s start the discussion with the current scenario going on in Amazon vs Shopify before going ahead with spotting some of the major differences between each. So, go through each point mentioned here one by one.
Enabling Omnichannel Commerce
eCommerce platforms like Shopify, Magento, and BigCommerce are increasingly powering small retailers to cope with the evolving market. Services like Shopify app development not only enable you to have your eCommerce site but also list products on top marketplaces. More importantly, it allows you to sell goods across the web, mobile app, and social media platforms – together called omnichannel commerce.
Choosing one of these platforms brings a swarm of operational advantages. Platforms like Shopify give you access to cloud-based third-party services like payment and fulfillment. It means more control over your branding and customer relationship management capabilities than marketplaces like Amazon.
Shopify-powered online stores have now created formidable competition for the likes of Amazon. Merchants are getting more leverage while dealing with eCommerce giants. They just need to hire professionals like Shopify developers and build customized online stores. Small businesses’ competition with Amazon has intensified to a level at which the giant is now offering its service for building stores outside its marketplace. Hence, it becomes a major reason for the differentiation between Amazon vs Shopify.
Pandemic-induced eCommerce boom
As the global wave of lockdowns disrupted businesses, more merchants were opening online stores and selling goods and services to stay afloat. This sudden surge in demand for eCommerce solutions has brought a new stream of small and medium businesses to the Shopify platform. Services ranging from store design to Shopify theme customization and maintenance are seeing significant demand.
According to eCommerce analysts, most of Shopify’s more than one million customers are first-time entrepreneurs. And it’s a wider global trend. For instance, in the U.S., new business applications hit the highest level on record last year, according to the research organization Economic Innovation Group. Interestingly, retail trade was the most active sector with a 54% surge in new business formation. The numbers are increasing as the competition starts to get dense and it is quite notable while peeking into Amazon vs Shopify. It has also been a leading driving factor for the rise in demand for custom eCommerce development solutions across industries.
Growing eCommerce spending
Global eCommerce spending grew 44% in 2020 compared with 2019. It was three times faster than the annual average growth rate over the past decade, according to data from Digital Commerce 360. While more and more small businesses moved online, the year was particularly good for Amazon. The eCommerce goliath grew from roughly 36% of all eCommerce spending in the U.S. in 2019 to 38% in the pandemic year.
While much of the Commerce growth is due to other retail companies expanding their eCommerce spending, it is also due to small businesses joining the eCommerce race. From eCommerce app development to creating social media commerce, small retailers are finding new ways to sell goods online.
Shopify’s Meteoric Rise
The 14-year-old eCommerce platform has become by far the largest provider of software and services to retailers who set up their online stores. Shopify’s revenue saw a staggering 86% growth in 2020., reaching $2.9 billion.
Shopify now has more than 1.7 million sellers using its eCommerce platform. It offers hosted eCommerce services, including payment gateways and tech support, among others making the latter one in Amazon vs Shopify stand out. Besides, you could hire Shopify developers from third-party vendors and build personalized Shopify stores.
In the pandemic year, Shopify-based merchants sold $119.6 billion in goods. It’s a whopping 40% of the total value of merchandise sold on Amazon’s third-party marketplace. The most popular offering from Shopify is a cloud-based eCommerce service that enables merchants to quickly build and operate an online store. It comprises an array of solutions, like Shopify app development and payment gateways.
Diverse offerings, Flexible Pricing
Over the years, Shopify has remarkably expanded its services to make eCommerce operations easier for small businesses. These newly added areas include fulfillment, warehousing, and even small business loans. In a stark development, in the Black Friday sales last year, total sales of Shopify’s merchants surpassed the total sales of all Amazon marketplaces in the U.S.
Shopify charges users a monthly fee between $30 and $2000. You could choose from pricing plans like Basic Shopify and Advanced Shopify. Depending on which plan you choose, the platform charges an additional 0.5% to 2% of each transaction if you use payment gateways other than Shopify’s own.
Amazon vs Shopify: Divergence Based on Features
You must take a deep dive to know the difference exists between Amazon vs Shopify. If you are still unaware of how Amazon is different from Shopify in terms of the eCommerce domain, take a look at the table given below.
You can easily stand against most of the eCommerce established players by moving further with eCommerce software development from a reputed company like OrangeMantra.
| Category |
Shopify |
Amazon |
| Design Flexibility | Shopify provides you with a range of fascinating templates, designed especially with the thought of selling. Through this, you can effortlessly build your unique brand as you want. | Amazon takes control over the design of your store pages and how products will be displayed. It will put some limitations on the identity of your business. |
| Tools and Features | Shopify undoubtedly has the best sales features on the market like abandoned cart recovery and selling digital products. Moreover, it has a bag full of other in-built tools as well as an app store. | In contrast, Amazon has a wide range of features that can fulfill the diverse needs of the sellers. However, you can’t find the same level of customization as you can witness in Shopify. You will find yourself stuck with the same tools as everyone else thus making it harder for all of you to gain a competitive edge. |
| Simplicity for usage | Shopify makes it effortless for you to create and set up an online store. Besides this, when AI merges with Shopify, you can fill up your inventories as fast as you can’t ever imagine. | In Amazon vs Shopify, with Amazon, all you need to do is log in and make your online account, get your products listed, and proceed with the selling. |
| Attraction of customers | With Shopify, you need to perform all the tasks of marketing and SEO. Shopify can only offer you the tools to succeed but you are responsible for the traffic that will come on your website. | Amazon received tens of thousands of people on their platform so the traffic will come automatically to your table. You do have to enter the competition with others and have to optimize to come up in Amazon searches. |
| Pricing | If you go ahead with Shopify, you will find the choice of three plans that range from $29 to $299 per month. There is a free one-month trial available and then you have to pay $1 for the basic plan for the first month. | Amazon lets you with two choices which are $0.99 per item and the other at $39.99 per month. Both these are subject to extra variable fees. |
| Payment options & fees | Transparent system of pricing. There are no transaction fees levied while utilizing the Shopify payment gateway as all the chargers are clearly stated or listed. It supports more than 100 types of payment alternatives. | It supports Amazon Pay payment gateway that has open gates for both debit and credit cards. Extra fees also come up but fluctuate too much and thus can’t mentioned transparently. |
| Help & Support | Shopify always has everything for everyone. You always have a back from their side 24/7 by email or phone. | Amazon has a decent kind of support and assistance. It has a help forum but this is not much more accessible than the Shopify one. |
Amazon vs Shopify: Which one is the best to go with?
It is not as simple as it sounds to choose one between Amazon vs Shopify. The truth is that it offers a plethora of great opportunities for you to take your business to the next level. There is no need to debate this comparison instead you can use these both to excel in your business. Build your website using Shopify by seeking services like Shopify Store development, Shopify Integration services, etc from a competent eCommerce consultancy like OrangeMantra.
Besides all of this, it is advisable to make your decision after doing a thorough analysis of your business requirements and needs.
Wrapping up!
By now you must have gotten a clear picture of why this Amazon vs Shopify battle is growing. An increasing number of small and medium businesses joining the Shopify-powered eCommerce space. And it’s obvious to make Amazon feels the risks of losing dominance. But, as the trends suggest, Shopify will likely grow more. But experts suggest, that to get the best of Shopify, you need a fully personalized online store, instead of relying on the default configurations. That’s where the role of an eCommerce website development solutions provider like OrangeMantra comes into play.
OrangeMantra’s Custom Shopify Solutions
For more than two decades now, we have helped hundreds of small and medium enterprises run incredibly profitable eCommerce solutions. Our extraordinarily tailor-made Shopify online stores helped businesses around the world mitigate disruptions caused by the coronavirus. Follow our blogs and social media handles to stay updated about everything eCommerce.
FAQs (Frequently Asked Questions)
Which platform will make my business more profitable, Amazon vs Shopify?
There’s no predefined way of telling whether Shopify vs Amazon will make your business more profitable. However, if you run a small or medium business, Shopify will likely benefit you more by providing your online store. Shopify also enables you to create your own brand identity.
How much does it cost to develop a Shopify online store?
The costs of building a Shopify online store vary widely according to your requirements. If you need a simple website with basic features and a storefront, costs are comparatively lower. OrangeMantra offers reliable Shopify website development solutions at a competitive price.
How long does it take to develop a Shopify online store?
The development time of a Shopify online store usually takes a noticeably short time since most templates and elements are ready to use. However, the development time depends on your requirements. If your requirements are limited and predefined it takes comparatively less time.
With which one should I start Amazon vs Shopify?
As a leading Digital Transformation company, we suggest you start learning Shopify first but it all depends mainly on how many products you have to sell. If you have some particular items to sell, going directly with Amazon isn’t bad at all as it charges only $0.99 per item. But, in contrast, if you have a large inventory and want to run your own business, without any doubt, go ahead with Shopify. Having an online store with a strong brand identity will have an impact when you step on Amazon rather than selling without any brand face.