E-commerce has become a huge trend in the modern business world. With more businesses than ever selling products online (both physical and digital), the time is NOW to get the ball rolling with an online e-commerce business.
When deciding to create this online business, you'll be faced with the important decision of determining which online e-commerce platform is best for your business. There are many options out there, and the main determining factor for you're online venture is going to come down to whether you want to sell on your own store or on an established marketplace.
Shopify is a platform that allows you to create your own online store, while Etsy is an online marketplace that allows you to sell physical goods online. Both of these platform "types" have their advantages and disadvantages, and I'm going to help you understand everything that encompasses these platforms so that you can make an educated decision on which one is right for you and your business.
Keep in mind though, if you really want to be thorough, you could build a brand on both platforms, and harness the pros/cons of both to build a nice business online!
There isn't going to be a right or wrong answer on which one is better, it's going to come down to what you and your new businesses' goals are.
There are a few key differences between a Shopify and Etsy business:
Domain: Shopify allows users to create their store under their own domain. This allows for a much more professional overall look (important for people looking to create much larger operations and businesses). The branding that you get with your own domain name is huge, just think of the difference in professionalism between yourstore.shopify.com and yourstore.com. Get the picture? Many other platforms charge for the ability to connect a domain, so Shopify not charging for this feature is a big plus!
Etsy only allows users to create their storefront on the Etsy domain. Everyone who sells on Etsy has to use the domain name, which is a huge flaw for personal branding and scaling up.
Design: While both platforms won't allow for complete customization without alot of HTML/CSS coding by you or your development team, the Shopify platform offers a much wider range of design templates and customization; which is a huge plus for businesses that need the differentiation and distinction from the competition. With Etsy, your storefront is going to look VERY similar to other Etsy stores.
Price: Shopify has a higher base price than Etsy, in that the store is going to cost more up front (in order to get started), than the Etsy store. However, Etsy's transactional fees are higher than Shopify's which means that your business will be less profitable overall as you scale up when using Etsy (due to the variable cost structure of their transactional fees).
Web Traffic: Etsy is a well-known marketplace for artists and craftspeople, and as such the marketplace gets a huge amount of organic traffic already, meaning that your products/services will be in front of buyer traffic without you really needing to market the store itself.
With Shopify, you will need to have an extensive marketing plan using things such as Facebook Ads, search traffic, media buys, etc. in order to become profitable! You'll need to be really good at developing a sales funnel by focusing on the landing page (your store) and funneling traffic through the checkout process. Furthermore, you'll likely need to incorporate 3rd party platforms such as a top-notch sales funnel builder and a cheap mailing platform.
Using Shopify is like creating a real business and brand, and as such there will be a lot more moving parts then there would be when using Etsy. You'll need to focus on conversion rate optimization, finding buyer traffic sources, follow-up email campaigns, etc. which creates a lot of complexity with your business venture.
This is the main differentiating factor between Etsy and Shopify, and will be the core reasoning behind choosing one platform over the other. With Etsy, lots of the store marketing and promotion is covered by the nature of the marketplace, whereas with Shopify you'll have to have your own marketing strategy in order to see any success!
Rules: Shopify gives you the freedom to create your own store and brand it however you'd like. With Etsy, you're going to be limited to selling items under the "handmade goods" umbrella niche. This reputation is the backbone of Etsy, and as such you won't have nearly as much freedom as you would on Shopify by going with Etsy!
Shopify's pricing plan is going to be dependent on your overall needs and the complexity of your store's operations. They offer a few different trial lengths to allow users to get started on the platform without any investment. You don't even need to enter in your credit card details to get your store fleshed out the way you want (however, in order to accept payments, you'll need to purchase the store!). Here's a breakdown of the 3 main pricing plans for Shopify:
Really, the main difference between the 3 base Shopify packages are the transactional fees incurred by the store owner when users don't use Shopify payments (Shopify payments is a zero transaction fee gateway!). Furthermore, with an increased base price, you get access to a larger amount of staff accounts.
Essentially, as your business grows and you seek to take advantage of economies of scale, you'll need to purchase the higher base price Shopify plans. At the start, however, you should be fine with the $29/month plan! There are also two other pricing models: Shopify Plus and Shopify Lite. Shopify Plus is for really big online business, and in no way is necessary at the start. Shopify Lite is for people selling just a few items, and it runs at $9/month! Read more about these pricing models here.
Etsy on the other hand has no upfront monthly fees, but their transactional fees are high compared to the industry standard variable costs.
Each listing on Etsy costs .20 to list, as well as a 3.5% transaction fee and a 3% + .25 processing fee. These fees definitely add up to be more expensive for businesses doing any substantial sales figures online, so keep that in mind when considering which platform you wish to build your business on.
All Etsy designs look very similar, which can be a pro/con for your business. If you're looking to differentiate yourself from the competition, you won't be able to take advantage of unique design elements on your store. However, if you're looking for an even playing field where the product quality/price is a greater influencing factor on sales than webstore design, then this design conformity can be a hidden blessing, as you'll have more time to focus on the product itself, rather than the design of the store.
If you're seeking more freedom for your store's design, then it's really no competition between the platform. Shopify has a theme store where a plethora of free/paid themes are available to choose from, and these themes can be edited and modified to your desired look/feel.
You can even hire a Shopify Expert or your own developer to make some serious changes to the base theme and customize your store further!
This customization and freedom will also likely be quite costly. Shopify themes can range from $0-$200 and the nicer looking ones will cost some money (most likely). Furthermore, the Shopify App store allows you a great amount of flexibility and customization to make your store a better looking and operating business. However, these apps will also cost money too (although there are some nice free apps also!).
You can simplify a lot of the Shopify design (while also keeping your site customized) by looking online for necessary page templates that make your website fleshed out and stunning looking very quickly!
Etsy overall is a much simpler way to start an online business. Utilizing the platform, you can get a profitable webstore up and running very quickly utilizing the base features of their store creator and the organic traffic that comes from visitors who browse the platform. If you have a great product that practically sells itself, then this platform will get you some nice profits by simply pushing the product in front of buyer traffic.
Shopify has a greater learning curve and longer startup process (although, compared to other forms of business like a brick and mortar store, it's incredibly easy and cost effective). Something to note, however, is that other website builders such as Wix and Squarespace can actually be a lot more complex than Shopify, so in the website building space Shopify is actually very simple to use! Furthermore, a lot of your profitability will be determined by your ability to optimize the e-commerce sales funnel (buyer awareness through off-site marketing to purchase completion). However, the free reign that you're granted with Shopify has a major upside. If you're a more business savvy person, then Shopify may be the way to go with your new e-commerce business!
Shopify is known in the industry for providing amazing and outstanding customer support, compared to other recently reviewed website builders, this platform has the best support (in my opinion).
Not only do they have a huge knowledge-base and forum section that can answer practically any question you'll have with the platform, they also have a 24/7 live chat support team to help guide you 1-on-1 through issues you may have when utilizing the platform and building your business. This is essential to their business model too, I believe, as the complexity that can arise when creating your own brand can turn off some customers in the process. However, by making it as painless as possible to get up and running with your own personalized webstore, Shopify has created a competitive advantage that many other platforms could only dream of accomplishing! Shopify support is absolutely outstanding and they really simplify the process for beginner and advanced entrepreneurs!
The Etsy support center really can't hold a candle to Shopify. While they do have a nice knowledge-base and support community, they also don't really have an easy to contact support line - so reaching out and getting 1-on-1 help with platform issues is hard to do.
Shopify is a huge e-commerce platform that allows users to create their own fully-fleshed online e-commerce business from scratch. They offer tons of support and simplicity when utilizing the platform, whilst also giving users the freedom they need to create a stunning looking and smoothly operating webstore.
Etsy is also a huge e-commerce platform specializing in the arts and crafts niche. Like other platforms such as Fiverr, Etsy allows users to create their own webstore within the grander marketplace. Using the traffic that Etsy naturally gets, users can create a solid online income by selling their crafted goods online. No outstanding marketing or business skills are necessary to make this platform work for you, all you really need are some killer products to start making a great income with Etsy.
If you're looking to really build an online business and start a brand from scratch, then it's no question that you should utilize Shopify to build your business. However, if you're looking to just sell some craft products online, then you can't go wrong with Etsy (they'll make getting sales and profits an autopilot venture, and you don't need to spend your own money on advertising and marketing to get your name out there). You can even use both to build a brand (using Etsy traffic to sell products directly and further direct them to your main store on Shopify). Both platforms serve a different purpose, and both can be used to create a killer online income!