Shopify vs. Etsy: Choose the Right Website for E-Commerce Business

Written by Devin Sizemore

February 15, 2019

You want to sell something online, and have the perfect business plan. But how do you find the right place to sell your products?

You might consider trying to use an online marketplace or even think about designing your own website. If you look into these two options, you’ll probably come across Shopify and Etsy.

Shopify and Etsy are both great ways of selling your products online. But they have some major differences and aren’t perfect for every seller.

Here, I’ll compare Etsy and Shopify and show you the unique features of each website, helping you decide which is right for your business.

Shopify: What You Need To Know

shopifyShopify is one of the leading platforms for building a custom retail website from the ground up. It offers templates so that you can get your website up and running quickly and tinker it to your liking. The templates are all excellent, offering a wide range of looks for your website.

But Shopify is more than just a hub for designing a beautiful website. It offers a full range of analytics and support designed to give your business an edge.

Need reports on customer buying patterns? Shopify has got you covered.

Need to integrate your website with third-party apps? Shopify can connect your website to thousands of outside apps and services.

Shopify also offers email integration support, so that you can collect your users’ data and begin to build email lists that will be crucial for growing your brand. They also have email marketing features built-in, so that you can use the emails you collect effectively.

Etsy: What You Need To KnowEsty Logo

By contrast, Etsy is not a place where you build your own website. Instead, it is an online marketplace thatis already fully operational. You put your products up for sale, and Etsy does the rest. It is meant to be user-friendly and easily accessible for first time sellers.

Etsy is a great option for those who are looking to take their first step into the world of e-commerce. The infrastructure is already built for you, and you don’t have to worry about site layouts or maintenance.

And most importantly, the buyers are there for you. Etsy is a big marketplace, connecting you to millions of people searching for handmade items. That means it’s also a competitive market, with thousands of sellers, so you’ll need to make your products stand out.

Etsy has great search functions, both within the website and through web browsers, so whatever it is you’re selling, people will be able to find it.

Etsy is not an open marketplace for any type of good. The focus is on handmade, vintage, or craft items. This isn’t the place to sell your new tech device.

Although Etsy will grow your brand by exposure on a big marketplace, it does not offer the tools that Shopify does to actively build your brand. And the analytics you get are bare bones. The ease of doing business comes at the cost of having less control over how you do business.

Etsy vs Shopify

You might be wondering which website is right for your business. Shopify or Etsy? The answer will depend on what you are selling, how developed your business is, and how hands on you want to be in the online retail process.

Shopify will allow you to build your brand to your liking, and set up your own business. You’ll have control of every step of the process, instead of using a middleman as a vendor. And you’ll be able to set the tone for your brand with a custom website that highlights your products.

But that means it’s a big time commitment, and you won’t have the built-in marketplace that comes with Etsy. You’ll have to work hard to get buyers to come to you.

Etsy will give you a helping hand. It’s a way of selling online with training wheels, and you have extra support and guidance as you start up. But you also have less freedom.

They may also have different costs, depending on what you are selling and how much of it you sell.

What Will You Have To Pay?

Etsy doesn’t have any subscription fees, so anyone can join without paying. That doesn’t mean you get to use the site for free. There are fees built into the selling process.

  • A small fee for posting your item
  • A 3.5% fee for every transaction
  • A payment processing fee of 3% + $0.25 for every transaction

What about fees on Shopify? Those can vary. There is an integrated payment processing system called Shopify Payment that charges no transaction fee (although you’ll have to pay for credit card fees). And you won’t have to pay a fee to post the item on your website.

If Shopify Payment is not supported in your country, then you will have to use one of the more than 100 payment gateways supported by Shopify. These are third-party, so they charge a processing fee. That means your costs will go up with every transaction.

Fortunately, Shopify Payment is available in most of the world’s largest markets. If you are based here, you will be able to handle most of your business without worrying about transaction fees.

Shopify, however, does come with a subscription fee. There are five main plans:

  • Shopify Lite ($9/month)
  • Basic Shopify ($29/month)
  • Shopify ($79/month)
  • Advanced Shopify ($299/month)
  • Shopify Plus (price varies, but is often around $2,000/month)

Most users will choose “Basic Shopify,” “Shopify,” or “Advanced Shopify.” If you go for “Basic Spotify,” you won’t get most of the advanced analytics available with the more expensive plans.

If you choose “Shopify” or “Advanced Shopify,” you’ll get full analytics support, with reports on user data, customer patterns, and sales records. These features are all designed to help you run a modern e-commerce operation.

Which Costs More?

Etsy charges more fees per transaction, but without having to pay a subscription fee, you’ll likely end up paying a little less with Etsy. This, however, depends on how much you sell.

Transaction fees add up, so if you sell a lot on Etsy, the fees might end up being more than the cost of a Shopify subscription (also depending on which plan you choose). That means there’s no easy way of saying whether Etsy or Shopify will cost you more to use.

Shopify or Etsy?

By now you should see that Etsy and Shopify are very different websites, designed to serve different types of seller. One site is not better than the other, and which one you should choose will depend on what you are selling and how developed your business is. You’ll find even more details on who should use the two sites here:

Etsy is one of the best options for anyone with an art-based hobby who is looking to turn it into a business. It offers excellent exposure on one of the world’s largest handcrafted item marketplaces, and you don’t have to worry about designing a website.

Getting started on Etsy is fairly painless, and you’ll be able to get exposure right away.

Shopify can be a great next step for those looking to grow their brand and expand the scale of their operations. It is more involved than Etsy, but also very user friendly and easy to get started with. The templates will give your online store a professional feel, and the analytics support they offer will make you feel professional.

Take Advantage of Both Etsy and Shopify

It should also be said that both sites can be used simultaneously. Building your own brand and website can take time, even with a fully-featured platform such as Shopify. As you build your online store, you can still benefit from Etsy to continue to grow your brand as you design your website.

You can also use Etsy as a way of funneling buyers to your own online store. List some items on Etsy, and then link them to your store for further options or more customization. This is a great way of having your cake and eating it too, and that doesn’t put too much pressure on your new online store, thus, allowing it to grow at its own pace.  

Eventually, you’ll want your own website to be the hub of your retail operation. But getting a website and brand ready to thrive on their own can take time. Meanwhile, take advantage of the infrastructure and exposure of Etsy to continue making money and growing your brand.

Two Great Options for Your Business

Shopify and Etsy are two of the best options out there for those looking to grow an online business. But they are very different and should focus on different types of sellers.

If you’re just starting out, get exposure and experience by selling on Etsy. The transaction fees are high, but the ease of doing business and the huge marketplace make it more than worth it.

And if you’re looking to develop an independent brand and take more control of your retail operation, consider Shopify.

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