Amazon vs. Shopify - Which Does Your eCommerce Business need?
It's 2022, so you probably have an eCommerce channel. However, You may have realized that one channel is insufficient to reach your profit margin goals. Omnichannel presence is crucial for your eCommerce business. It is essential to understand the limitations and perks of each platform, as well as the benefits and advantages they offer for your small business and the customer experience. There are many pros and cons to Amazon and Shopify's services. We'll go into more detail here and share why you need both!
Amazon is a marketplace. Shopify allows you to create your independent brand store.
Many Amazon shoppers don't care about the seller or store they buy from when searching for products. Is it possible to create a brand store on Amazon using your seller account? Sure. It's inevitable that Amazon's brand will win, even if you use every opportunity to embed your brand in your Amazon store. This means that you're more of an option than a destination for shoppers to visit.
However, Shopify stores offer you more freedom to personalize your online presence, allowing you to brand yourself independently of any other platform. Shopify allows you to hide that your Shopify store is a Shopify store from the naked eye of most consumers. You can customize your template, URL, and storefront to make it seem like a Shopify store.
What's Amazon?
You could see Amazon as a shopping mall where many sellers compete for buyers' attention. These potential buyers could be looking for something specific or just passing by to browse. To get sales, it's your responsibility to make yourself stand out from the crowd of sellers. You can improve your seller ranking by having solid sales across all states and positive customer reviews. Also, you have the option to become a sponsored brand or product and buy Amazon video ads and display ads. These ads can be easily plugged into Amazon and visible on other sites. They can also be purchased and managed with your Amazon seller account.
What's Shopify?
Shopify is more like an "online business with bricks and mortar," Your presence speaks to being your unique brand. Your storefront can be customized to suit your needs, and you have a lot of creative control over how it operates and looks. Amazon does not allow you to control functions such as these.
What's the greatest difference?
While there are many differences between these platforms' offerings, the most noticeable difference is their fees. Let's be honest; Amazon charges a fee for everything. Add it all up, and you'll be paying Amazon approximately 15% of your total revenue in fees. This is before any fulfillment costs. FBA costs you closer to 25% of your total revenues. You will also need additional funds to purchase their sponsored advertising if you want your business to stand out or be found.
Shopify is the best option for affordability if you're just starting out. The $29/month hosting fee makes it affordable. Although this will give you an online store to start selling and set up, it is not the most expensive you can spend. You can add ons such as customized templates (which you get for free), fulfillment services, and complex CRM to increase your costs. It's great that they don't have to be there if you don't scale. You only pay for what you use when you need it. We love them because the fees are adjustable as you grow.
The Shopify Plus version will get you started at $2,000+ per month if you have a higher volume of business. A variable fee may also apply. You should discuss this with Shopify Plus, as Shopify Plus's pricing varies based on your eCommerce business structure and volume. You can also sell your products through Shopify. This allows you to curate your brand experience and customers while Amazon fulfills your orders. You already know that there are fees, but it may be worth streamlining your overheads and operations depending on your business structure.
How do I access my customer lists and manage them?
Many of you will be surprised to learn that Amazon views your customers as their customers and does not share any customer data with you. This leads to fierce competition between sellers who want to purchase sponsored ads. If you're going to market directly to your customers, you will have to pay Amazon more.
Shopify users still have good news. You can access all your customer information and use built-in tools and tools to manage and market to them. You can create sales deals and special offers and integrate third-party opportunities to build sales funnels, email advertising, and sales funnels on all major platforms (Facebook, Instagram, and Google). This is yet another reason why we recommend both channels.
What are the custom features available? How many stores can you have?
Shopify leads this category by leaps and bounds. Shopify is the clear leader in this category. As a seller on Amazon, you are responsible for adhering 100% to their Terms and Condition. You are also restricted in what you can customize for your store besides product descriptions. Even these are subject to a long list of rules. You could lose your selling rights if you break any of these rules. Amazon sellers are allowed to open another store, but they must first request permission from Amazon.
Shopify is your baby. Shopify allows you to do almost anything with your store and can help your brand shine in many creative ways. In addition, Shopify will enable you to open as many stores as you wish.
What are the potential risks of selling on these platforms?
There are still more risks involved with selling on Amazon. You've probably heard horror stories about Amazon sellers who log on to their accounts only to discover they have been closed. This is compounded by sellers only have one chance to appeal to Amazon for their store to be reopened after their account has been closed. Amazon can shut down stores without notice.
Shopify is a safe platform that offers low risk. Shopify is solid and steadily growing, closely behind Amazon. There is no limit on how many Shopify stores a seller can open, nor the brands they can use. Many of our clients have multiple Shopify shops that we help manage financially . We now come to the last point in our discussion about chatting risks: sales tax.
How can I calculate the Sales Tax?
The United States has a sales tax system that is managed at the state level. The U.S. does not have a "national" sales tax law. As a result, many online sellers are faced with different sales tax laws across the country.
If you are an online seller, you must charge the correct sales tax to your customers and return the taxes to the state.
When collecting sales tax online, the basic rule is:
Your customer has sales tax nexus in the state where your business is located.
Sales tax will always exist in your home state.
