Is Amazon or Shopify Better for Small Businesses?

A generation ago, small businesses thrived from a single location on Main Street in their hometown. But as shopping behavior migrates online, that’s a thing of the past. “I definitely lean on the side of digital is now-standard operating practice,” said Chelsea Gross, director analyst at Gartner. While mom-and-pop shops may not always need to lean on digital offerings as much as they are during the pandemic, Gross noted they will still need an integrated commerce strategy in the future. Zach Weinberg, vp of ecommerce at search marketing company Reprise Digital, said, “We exist now in a world of unified commerce,” in which consumers bounce across devices and locations. Small businesses may not necessarily need to sell online, but they will need an online presence “from an education standpoint … [to deliver] all that information that helps consumers on their path to purchase.” Two of the dominant platforms for small businesses are Shopify and Amazon, the latter of which, per ecommerce intelligence firm Marketplace Pulse, has more than 1 million U.S.-based sellers and sees more than 10 million orders per day. But after nearly doubling in size last year, Shopify is now 40% the size of Amazon Marketplace, with $119 billion in gross merchandise in 2020, compared to $300 billion on Amazon. Both platforms tout themselves as friends of small businesses—but which is the better option? Shopify vs. Amazon Per Gross, one of the main differences is branding. Shopify allows small- and medium-sized businesses (SMBs) “to create a platform that is completely branded by their positioning, by their brand voice, using the brand equity that they own,” Weinberg said. Shopify also gives SMBs a big advantage with data, which enables more opportunities to interact directly with customers. “Small businesses directly own 100% of the data that comes through their [Shopify] site,” Weinberg said, “all of that detail that is provided by an analytics support solution.” That being said, with nearly 2.3 billion visits in February 2021 alone, Amazon is peerless when it comes to traffic. The ecommerce giant also shines in allowing sellers to simply add listings and send inventory to fulfillment centers while Amazon takes care of the rest. Then again, there’s a lot more competition on Amazon. “If you're … considering Amazon as a platform, you do have to be aware that Amazon's private brands exist, and they are taking up more organic and paid space on Amazon's landing pages overall in search,” said Kavita Cariapa, svp of ecommerce strategy at Dentsu. So how does a small business decide? For SMBs that want to control the experience, Shopify is probably the answer. For those that want a firehose of traffic, Amazon makes more sense, Gross said. But in some cases, there are other factors, too, such as the size of the products sold. “So, for example, furniture, which is obviously larger and heavier in weight, could be difficult to sell on Amazon through some of its fulfillment methods and also including service or warranties and guarantees as a part of your product,” Cariapa said. At the end of the day, it’s about understanding whether you want to protect your brand presence or if you’re going for reach, she continued. Enter Selz With its recent acquisition of Australian ecommerce platform Selz, Amazon may be looking to offer a more Shopify-like solution. SMBs can operate a brand website within the Amazon ecosystem and have more control of the site and experience—plus, they can access more data. Gross called the acquisition “a direct response to the growing competition from Shopify and, honestly, a reversal from a strategy Amazon's had in place since 2015, when they shut down their web store's business and focused on their primary platform for small businesses and everyone else.” “While it makes a lot of sense to have something really competitive for Shopify, my gut feeling is that this is going to be something they end up folding back into Amazon after attracting more small-business users,” she continued. In other words, Amazon may use Selz to attract SMBs that want to run their own websites. But if it doesn’t scale, Amazon will find a way to integrate it “with a better or more controlled offering within their ecosystem,” Gross said.

Ecommerce News

Which Platform Is Better for Small Businesses: Amazon or Shopify?

It boils down to reach or branding—and Amazon’s Selz deal could deliver both

Lisa Lacy

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