Shopify vs. Amazon FBA: Which One Should I Choose in 2022?
It's the Zab twins; super excited to see you here. Today, we'll tackle one question every first-time seller wonders before kick-starting their e-commerce journey. But before we compare Shopify and Amazon, let's clarify why you should be reading this.
The fact is that the Zab Twins have tried and tested both business models. After earning over $500,000 by dropshipping and building multiple profitable Amazon FBA businesses, the duo has become high level e-commerce coaches. Brian's outside-of-the-box sales and marketing advice, matched with Arek's analytical skills, enable them to help take your business to the moon.
With the growth of online selling, it's no surprise that Shopify has grown by 200%, and over 1824 new sellers continue to join Amazon daily. As such, beginners now have the potential to earn millions of dollars, given they make smart business decisions. And one of the toughest questions you'll face early on is, "which e-commerce platform should I choose?" If that's you, this article is perfect for you!
In today's blog post, we'll share our expert advice to help you choose an e-commerce platform that suits your needs. This YouTube video here tells you the pros and cons you need to consider:
Shopify vs. Amazon FBA: Where Should You Sell in 2022?
As the e-commerce world continues to revolutionise, it's only natural that the number of online shoppers grows from 2.14 billion to a stunning 7.74 billion. That means e-commerce entrepreneurs have many opportunities to start a profitable online store today!
But as a beginner entering the e-commerce sphere, one of the most challenging decisions you'll face is deciding which platform you should choose. Although many feature-rich, robust platforms exist, Shopify and Amazon are the two most popular options.
Even though both platforms are excellent e-commerce solutions, there are some stark differences between the two. Since we've spent years creating a successful business on both, we'll tell you the pros and cons you must consider before choosing one that's perfect for you:
You can use this resource in two ways: keep reading or watch the video format here.
1. Customer Base
Here's the thing: Amazon has over 200 million prime users. Think about that, when you start selling on Amazon, you can leverage an existing customer base of 200+million buyers. And we're not even considering the 89% of customers that visit Amazon to make a purchase now and then!
Thus, choosing Amazon FBA allows you to start making money sooner, especially if you tap into its existing customer base. In fact, data shows that prime users spend more money than regular buyers!
On the contrary, Shopify requires you to create attention-grabbing marketing campaigns to drive qualified website traffic and convert those prospects into revenue-generating customers. But on the bright side, since Shopify allows you to create digital ads, you'll find it easier to lure in customers on the front end of building a business.
2. Order Fulfilment
Using Amazon FBA saves you the trouble of managing inventory, product fulfilment, and delivering products. Moreover, Amazon's massive distribution networks mean customers don't have to wait weeks to receive their products; instead, they get them delivered in two days. As a result, you can improve customer experience without extra effort.
On the other hand, you'll have to manage order fulfilment yourself on Shopify dropshipping. That means acquiring customer information, sending products from China to the U.S., and dealing with customer inquiries.
The downside is that your customer can wait over 30 days to receive their product, meaning customers have to deal with long shipping times. Consequently, late deliveries impact the customer experience and can reduce retention rates significantly.
3. Product Listing
The key benefit of using Shopify is that it allows you to create a fully customizable website. You can choose from over 80 eye-catching themes and 8000 integrations to create a digital marketplace that converts. Additionally, you have a lot more creative freedom to create a stunning product listing that captures your target audience.
But with Amazon FBA, your product listing needs to match the needs of the search engine, meaning you have to focus on keyword optimization to ensure your listing ranks higher in search results. Consequently, your product listing might not look as attractive as a website listing.
You'll also have to deal with tedious back-end tasks like compliance notifications that can complicate creating a product listing. However, you can simplify this task using highly qualified and robust tools, such as Helium 10 or FBAStudio. That way, you can create attractive and optimised product listings that convert more effectively in less time.
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4. Startup Costs
As we discussed above, in Amazon FBA, you store inventory in Amazon's warehouse. As a result, you can fulfil your promise of two-day shipping by leveraging its existing infrastructure. But that means you have to order your products in bulk from China.
The downside? You have to worry about significantly higher startup costs, including shipping from China to the U.S. In addition, you have to project the time required to move your product from one point to the other.
Now, if we consider Shopify dropshipping, you don't have to place bulk orders. In addition, you don't have to worry about inventory costs or spend hundreds of dollars on optimizing your product listing, which is necessary to stand out in Amazon FBA's competitive landscape.
5. Customer Ownership
One downside of selling on Amazon is that you don't directly access your customer's information.
Luckily, there are several strategies, such as integrating an insert cart or adding a high-value CTA, you can use to acquire customer information. In turn, you can create post-purchase or promo drip email campaigns to increase brand loyalty and retain customers.
On the contrary, Shopify offers you complete control of customers' information, which means you can create highly personalized digital ads, email campaigns, SMS marketing, and social media marketing. The fact is that dropshipping offers ease in acquiring customer information and using it to make a profit on the back end.
6. Buyer Psychology
Unsurprisingly, purchasing on Amazon is very different from buying from a website.
On Amazon, customers have significantly higher buyer intent. For instance, if a customer types "gamer headset" in the search bar, it means they want to purchase it. They only have to consider whether they should buy it from you or a competitor.
But on Shopify, emotions play a crucial role in attracting customers. Therefore, you need to assess your target buyers' online behavior and utilize that data to create customized digital ads that compel them to make a purchase.
7. Speed to Scale
Good news: the speed to scale of both e-commerce platforms is fantastic! But in different ways.
Since Amazon acts as a search engine, the power to scale a product is significantly higher. You can optimize your product to rank for specific keywords, thus allowing you to make data-driven and informed business decisions.
On the contrary, the speed to scale on Spotify largely depends on testing customer behaviors, demographics, etc., by split testing or A/B testing. But once you find your ideal market, you can scale your business rapidly.
The Bottom Line
It's not difficult to understand why Shopify vs. Amazon is the biggest battle in the e-commerce world. The best way to choose a winner is to sit down, read the pros and cons of each, and determine which platform works best for your needs.
We ultimately chose Amazon FBA because the platform allowed us to carve a successful business while managing our 9-to-5 business. By handling fulfilment and customer service, Amazon eliminates the need to invest all your time and money. But on Shopify dropshipping, while we earned over $5 million, we had to deal with returns and implement a team to handle customer service. That meant our overhead costs were slowly climbing higher.
Before you click off, we want to ask you: which one will you choose: Amazon or Shopify? If you're unsure which e-commerce platform is perfect for you; you can reach out to The Zab Twins by scheduling a call here and get free, practical advice!