While you can manage order fulfillment yourself, many retailers find it easier to work with a third-party on fulfillment processes. If you’re planning on selling through a leading online marketplace, Amazon FBA is usually the top choice.
Alternatively, if you’re using an ecommerce platform to build your own standalone digital store, a solution like the Shopify could be the ideal alternative.
Today, we’re going to take a closer look at the features and pricing of both options, to help you decide which path you should take.
Quick Verdict
If you want to run your own online store, Shopify has a range of options for fulfillment that can make managing delivery much simpler.
Alternatively, if you want immediate access to a huge online consumer base, and premium delivery, Amazon could be the best choice.
Table of contents:
Amazon FBA vs Shopify: The Key Differences
While both Amazon and Shopify allow companies and individuals to sell products online, there are some major differences between them. Amazon is a leading online marketplace, where you can list your products alongside other options from competing sellers.
It offers a comprehensive range of tools for merchants, including marketing solutions, and Amazon’s own dedicated fulfillment options.
With Amazon FBA, or Fulfillment by Amazon, you can delegate all of the complicated parts of packaging, managing, and shipping your orders to a leading vendor.
All you need to do is send your products to a fulfillment center, and Amazon handles the rest, storing your goods, packaging them for delivery, and even offering incredible one-day delivery options through Amazon Prime.
Shopify, on the other hand, is a full ecommerce platform, which allows you to build your own branded online store, complete with:
- Built-in SEO functionality
- Blogging tools
- Payment gateway options
Rather than just creating product listings for an existing marketplace, you can design an entire online brand to match your ecommerce business.
Like Amazon, Shopify also offers fulfillment options, in the form of the Shopify Fulfillment Network. With this, Shopify distributes your products to fulfillment centers across the United States, handles returns on your behalf, and even shows estimated delivery dates to customers for you.
Additionally, there’s the option to expand outside of the Shopify Fulfillment Network, using Shopify dropshipping apps on the platform’s app marketplace.
This means if you’re using a dropshipping business model (or print on demand), you can work with a range of third-party companies.
If you want a complete guide to how Shopify’s platform and Amazon’s marketplace compare for sellers, you can find our comprehensive comparison here.
Amazon FBA vs Shopify: The Biggest Pros and Cons
All ecommerce solutions have pros and cons to consider. For instance, while Shopify give you a comprehensive platform for building your online presence, you won’t have access to the existing consumers on Amazon, or the impressive Prime delivery options.
Alternatively, with an Amazon store, the fees you’ll pay for fulfillment can be complex to understand, and you have less control over your branding.
Amazon FBA Pros and Cons
For beginners getting started in the online world, we consider Amazon FBA to be an easy, attractive, and straightforward choice. You can create an Amazon store with minimal effort, access an existing audience of buyers on the Amazon marketplace, and leverage exceptional fulfillment support.
However, there are still some downsides, from complex (and sometime expensive) fulfillment fees to limitations on what you can sell.
Pros 👍
- Amazon’s reputation: Customers around the world already trust Amazon as one of the top marketplaces in the world. This means you shouldn’t have much trouble gaining customer trust. Plus, with Amazon FBA, you can improve your product’s search rankings and attract more customers to your storefront.
- Fast delivery times: Amazon’s FBA service comes with full access to Amazon’s lightning-fast delivery options. You can even access next-day delivery with Prime, which can improve your relationship with customers and increase your sales. Plus, Prime members get free shipping, which can further increase your conversions. 62% of customers say they’re more likely to buy when shipping is fast and free.
- Simplicity: Amazon can handle a lot of the most complicated parts of running an online store for you. They can handle 24/7 support on your behalf, so you can spend more time focusing on growing your business.
- Reduced operating costs: With Amazon FBA, you don’t have to worry about handling storage or inventory yourself. Plus, you don’t have to pay for staff to assist with shipping and handling goods. However, there are still fees to consider.
- Existing customer base: Perhaps the biggest benefit of Amazon is that you’ll have immediate access to a massive customer base of millions of potential buyers. You can save a lot of time and effort in marketing your store.
Cons 👎
- Limited control: Using Amazon FBA limits your control over everything from the shipping and packaging process, to building your online brand. If you don’t have a separate online store, you might struggle to stand out from the competition.
- Potential for higher returns: You may encounter a spike in order returns because of Amazon’s no-questions-asked return policy. This could have an impact on your profits in the long term, and lead to more complex return management processes.
- Expensive charges: Selling through Amazon and FBA comes with a variety of fees, from selling fees for the marketplace, to fulfillment and inventory storage costs. The sales tax can also be complicated to calculate on your own.
Shopify Fulfillment Pros and Cons
Perhaps the biggest benefit of choosing Shopify for your online store and fulfillment needs is that you get to build a comprehensive online presence. You’ll have full access to all of Shopify’s templates and tools for building an impressive online store.
Plus, you can connect your Shopify store to social media channels, and marketplaces like Amazon and Ebay to increase your sales. You can even sell offline with Shopify POS, and leverage third-party dropshipping and POD tools.
Pros:
Pros 👍
- Comprehensive online store: With Shopify, you don’t just get product listings, you can create an entire online store. You have the freedom to design your store to suit your specific needs, and you’re not competing for attention with other brands.
- Omnichannel selling: Shopify allows you to sell through your own online store, integrate with Amazon and social media, and even sell in-person with POS tools. This could mean you can increase your sales and revenue.
- Customization: With Shopify’s fulfillment network, you can customize your packaging with your logo and colors to create a unique customer experience. You can also add promotional materials to your orders, such as business cards and flyers.
- Low operation costs: Similar to Amazon, you won’t need to manage your own fulfillment center or hire additional employees with Shopify fulfillment. Plus, you can access some excellent shipping discounts on Shopify plans.
- Excellent support: Shopify builds on its user-friendly experience with plenty of support, including step-by-step tutorials, and help from professionals when you’re launching your new online business.
Cons 👎
- Limitations: Shopify’s fulfillment network is only suitable for retailers in the United States using Shopify Payments. You’ll also need to adhere to certain eligibility requirements. However, you can always use third-party fulfillment options with Shopify too.
- More complexity: With a Shopify store, you’ll still be responsible for building your online presence with search engine optimization and marketing. Plus, you’ll need to manage your own comprehensive ecommerce platform.
- Expense: Alongside paying for order fulfillment and storage, you’ll also need a Shopify plan, which can make your monthly costs a lot higher.
Shopify vs Amazon FBA: The Prices
Whether you choose to sell with Amazon FBA or Shopify, there are various fees to consider.
Amazon Fees
With Amazon, you need to sign up for an Amazon seller account. There are two options, “individual”, or “professional”. With the individual plan, you pay a flat $0.99 fee for every sale transaction, although these fees are only deducted after you make a sale.
With the professional plan, you pay $39.99 per month. Plus, you’ll have a referral fee to pay for every product sold on the Amazon platform. Usually, this fee is a flat percentage, which varies depending on product category. On top of that, there are the FBA fulfillment and storage fees to consider.
FBA shipping fees for Amazon vary depending on the weight of your products, you can find a complete guide to pricing here.
Monthly storage fees also depend on how much inventory you’re storing in Amazon’s fulfillment centers. There may be additional “inventory surcharge” fees to pay if Amazon holds your products for long periods.
Shopify Fees
With Shopify, there are also various fees to think about. First, you’ll need a Shopify plan. These come with a monthly fee, and a transaction fee if you’re using Shopify Payments.
Plus, there’s an extra payment processing fee if you want to offer other payment options like PayPal.
The core Shopify plans include:
- Basic Shopify: $39 per month: Website building features, SSL certificates, 1,000 inventory locations, payment processing, marketing tools, and 2 staff accounts.
- Shopify: $105 per month: The features of the Basic plan, plus global multi-channel selling, shipping discounts, 5 staff accounts, and professional reports.
- Advanced: $399 per month: The features of Shopify, plus advanced customized reports, import tax management, and 15 staff accounts.
There’s also a Starter plan for $5 per month for selling through messaging apps, and the Shopify Plus, enterprise plan, starting at $2,000 per month.
On top of this, you’ll need to pay fulfillment fees, similar to Amazon. There are no upfront costs, but you will pay delivery prices based on product weight, and inventory storage fees depending on how much inventory Shopify manages for you.
There’s a Shopify pricing calculator for fulfillment fee estimation here. You may also need to pay additional fees with Shopify if you’re using integrations from the Shopify app store to help with things like creating discount codes or gift cards, inventory management, or marketing.
Shopify vs Amazon FBA: Which is Best?
Ultimately, your decision of whether to use Shopify or Amazon FBA will all depend on your business model and strategy.
Shopify pricing plans can be higher for small business owners and startups, but you do get more control over your ecommerce store and customer experience.
Amazon has lower pricing plans, and access to an existing audience, as well as plenty of great tools in seller central.
However, you’ll have fewer ecommerce tools to work with, and less control over your products. Remember, you can always combine your ecommerce store with Amazon FBA, by using the sales channel options within Shopify for omnichannel selling.
This might be the best option for entrepreneurs who want to increase revenue with Amazon sales, while still maintaining control over their own ecommerce website.
FAQ
Not exactly, Amazon requires you to ship your products to its warehouse, while dropshipping suppliers will handle all of the processes involved in sourcing your products for you, and shipping them to your customers. You can use dropshipping on Shopify, however.
If you’re just getting started, Amazon can be a better option, as it’s extremely easy to get started and access an existing audience. However, if you want more control over your business and branding, Shopify is definitely the better alternative.
Shopify definitely offers more value for money, and gives companies more freedom to sell across a variety of channels. You can also experiment with a wider range of products, which could mean you make more profit in the long term.
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