Shopify vs. Amazon: A Tale of Two E-Commerce Giants

We’ve put together a comparison guide of Shopify vs. Amazon that draws on research and insights from our team. While comparison usually means picking one or the other, we conclude that there is merit to using both Amazon and Shopify to build a digital presence and grow your business.

‍Introduction

For years, Amazon has been the biggest player in the e-commerce world, making up a staggering 41% of all e-commerce. With its quick shipping and extensive network, Amazon was prepared for remote shopping and experienced tremendous growth during the pandemic, when hundreds of thousands of businesses were forced to close or turn to e-commerce. But the pandemic also powered growth elsewhere. Needing to pivot to stay afloat, businesses brought their products and services online, and in navigating the unfamiliar space, many of them found the tools that they needed on Shopify, a then-little-known company that soon became Amazon’s main competitor in a lot of ways.

Today, business owners who want to create a digital storefront end up evaluating these two e-commerce platforms. When comparing Shopify vs. Amazon, both offer valuable services and give sellers access to a wide range of tools. However, the differences between the two are plentiful. Amazon at its core is customer obsessed, labelling itself as the “everything store”, while Shopify is merchant obsessed and, in shifting entirely into virtual work during the pandemic, aims to be the “everywhere store”.   

In an era where having a digital presence is indispensable, knowing the differences between these two across the features that matter the most for your business is the first step to e-commerce success.     

An Overview of Shopify vs. Amazon

An important difference between the two is that Shopify allows business owners to build and manage an online store, while Amazon is a marketplace that houses products and services from different businesses. Many people liken Shopify to an empty building that sellers rent out, and Amazon to a massive department store that sells virtually everything. Customers seek out brands on Shopify and stumble across them on Amazon. 

‍Shopify currently powers more than one million independent businesses of all sizes, catering to retail chains and big companies like Kylie Cosmetics and Tesla, as well as a mosaic of smaller DTC brands, start-ups, and celebrities like Lady Gaga and Adele who have launched their own merchandise. 

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Pros

• Extensive e-commerce tools: Shopify merchants start out with a core product, which includes customizable templates, integrated payment processing, and more. They can add to this “starter kit” with additional features like Shop Pay and apps built by third-party developers in Shopify’s App Store.
• Unique brand identity: As mentioned before, Shopify is merchant-forward, and so they prioritize empowering brands to make their online store completely their own. 
• Flexibility with collecting consumer data: In Shopify, a brand has access to their customers' data and knows exactly who they are. Data powers personalized experiences. As privacy regulations decrease the usage of third-party data and cookies, brands will need to increasingly rely on first-party data. Access to consumer information has been a continuous battle between Amazon and its third-party sellers.

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Cons

• Marketing: With Shopify, customers come to the brands by searching for specific stores or items, which means that sellers need to be more hands on with marketing campaigns to get the word out about their brand (and the spend associated with that marketing). 
• Fulfillment Responsibilities: Sellers need to take care of fulfillment themselves or rely on third-party carriers, which are often subject to unpredictability. 

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Amazon has 14 global sites and more than 213 million unique US visitors each month, making up an extensive customer base. 

Pros

• Extensive customer base: This is great for new or small businesses who don’t yet have the inventory or revenue capabilities to maintain an independent store, and for established businesses who want an additional revenue stream. Customers are able to organically discover brands just from searching within Amazon.
• Fulfillment Capabilities: Amazon’s FBA service (more on this below) allows sellers to partake in two-day Prime shipping. 

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Cons

• Competition: Sellers on Amazon are competing with each other with products and layouts that look similar. The Amazon marketplace is densely saturated. 
• Limits to consumer data: Because Amazon limits access to consumer data for third-party sellers that use its fulfillment service, sellers lose the ability to learn who their consumers are.