Shopify vs Etsy: Choosing the Ideal Platform for Your Business Leave a comment

As an increasing number of individuals transition from traditional employment to entrepreneurship, many are exploring e-commerce platforms to establish their online storefronts. Etsy and Shopify emerge as formidable options, allowing entrepreneurs to set up fully operational stores within a weekend, ready for customer transactions.

Comparing Etsy and Shopify: A Quick Overview

Both Shopify and Etsy offer e-commerce platforms for entrepreneurs to sell products and services. The primary distinction lies in Shopify’s capability to enable users to establish their personalized branded space, whereas Etsy operates as a marketplace. While Etsy is primarily known for handmade items, sellers also offer vintage clothing, crafting supplies, and unique products. On the other hand, Shopify accommodates a broader range of products, including handmade goods, apparel, jewelry, and various other items.

Shopify

Free trial: Yes

Shipping discounts: Yes

Integrations: Yes

Shopify ranks fifth among our top e-commerce platforms, earning a commendable 4.5 out of 5 stars. While widely embraced by entrepreneurs, Shopify is particularly well-suited for retail sellers, specializing in goods such as jewelry, apparel, bath and body products, and shoes. As a hosted e-commerce solution, Shopify oversees the technology platform that powers your store. Sellers benefit from the ease of customization through its drag-and-drop web designer, allowing seamless adjustments to their storefronts.

To enhance your store’s functionality, Shopify offers a range of third-party integrations known as Shopify Apps. These apps enable you to connect with various services, such as marketing, customer service, and conversion tools, providing additional features for an enriched online retail experience.

Pros

• Collect customer data effortlessly
• Enjoy a complimentary 14-day trial
• Design your storefront with ease using drag-and-drop functionality

Cons

• Pay a monthly fee, irrespective of sales for that month
• In addition to the subscription cost, transaction fees apply

Etsy

Free trial: Yes

Shipping discounts: Yes

Integrations: Yes

Etsy doesn’t function as a platform for hosting your individual website. Instead, it serves as a marketplace that connects buyers with sellers of handmade goods and services. Establish your shop, list products, and customers can make purchases through Etsy. Similar to Shopify, you are responsible for shipping the products to customers. However, unlike Shopify, you don’t acquire customers’ email addresses for marketing purposes.

Each product listing incurs a fee to be featured in your store. Sellers face transaction fees per sale, conversion fees, advertising fees, and payment processing fees for each transaction. For larger-scale shops processing numerous sales, these fees can accumulate significantly. In contrast, small, low-volume stores are exempt from monthly plan fees and instead incur charges per sale and listing.

Pros

• Experience a complimentary 30-day trial of Etsy Plus
• Tap into a vast global network of potential customers
• Get started with the free base plan

Cons

• Note: Shop design customization is not available
• Limitation to handmade goods
• Be mindful of accumulating fees

Comparing the Companies

Free Trials and Plans

Shopify offers a three-day free trial, and afterward, you’ll need to pay a minimum of $38 USD per month (billed annually) for the base plan, which many store owners find more than sufficient. Multichannel retailers might prefer the $99 USD per month (billed annually) option. Stores requiring advanced reporting can benefit from its $389 USD per month (billed annually) plan. If you have an existing blog or website and simply want to add a way to collect credit card payments for orders, you can get Shopify Starter for $7 USD per month.

Etsy offers a 30-day free trial of its Etsy Plus plan, which gives 15 listing credits and $5 USD per month in ad spend. After the trial, you’ll pay $10 USD per month. This also includes discounts, customer restock requests, and more banner options.

Fees

Transaction fees for online sales on Shopify start at 2.4%, plus $0.30, and become slightly more expensive with lower-priced plans. As Etsy doesn’t impose a monthly fee, except for the Plus plan, sellers will encounter higher per-sale fees. These fees are numerous enough that third-party calculators have emerged to help sellers calculate their profits.

For Etsy, the initial charge is $0.20 USD per product upload to make it available in your store. Renewing the listing after four months using auto-renew incurs another $0.20 USD. If you have multiple quantities of the same item and sell one, you pay an additional $0.20 USD to keep the listing active. However, there is no fee for editing the listing.

For each Etsy sale, there’s a transaction fee of 6.5% of your listing price, excluding the amount charged for shipping and gift wrap. Sellers also face payment processing fees ranging from 3% to 4%, plus $0.25 per transaction. Currency fees apply if Etsy converts foreign denominations.

Customer Support

Shopify sellers enjoy around-the-clock customer support accessible through chat, email, and phone. In contrast, Etsy also offers customer support but requires users to navigate through its service tree to identify phone-based problems before obtaining a phone number. For most queries, Etsy directs users to email, leading to a response time of two to five business days.

Storefront Design

Shopify provides the flexibility to design your storefront using drag-and-drop tools, while Etsy operates primarily as a marketplace. Nevertheless, Etsy Pattern offers a solution for those looking to create a standalone website integrated with their Etsy Shop.

On both platforms, sellers can leverage standard templates for their policies and procedures. This is advantageous for sellers who may struggle to articulate their shop policies or are uncertain about what their policies should entail.

The primary distinction between Shopify and Etsy

A significant distinction between Etsy and Shopify lies in the handling of customer emails. Etsy does not provide customer email addresses, making it challenging to build an independent customer base outside the Etsy marketplace. While customers can express interest in an Etsy shop and receive notifications, the absence of direct email access poses a concern, especially if Etsy were to cease operations. It’s worth noting that this limitation doesn’t apply to Etsy Pattern, which allows email marketing.

Contrastingly, Shopify does not present this issue. With customer consent at checkout, Shopify allows sellers to send newsletters and updates, creating a valuable marketing channel. Even in the hypothetical event of Shopify shutting down, sellers retain their customer lists for continued marketing.

Many Etsy shop owners opt to maintain dual storefronts, often utilizing platforms like Shopify and Squarespace. This dual presence is driven by Etsy’s expansive marketplace reach, allowing users to showcase their products to a broad audience. This approach is particularly beneficial for those without an existing customer list. A common strategy involves including a business card with a discount code for the Shopify store when shipping Etsy orders. As a shop’s revenue grows through Shopify, some sellers choose to phase out their Etsy store to minimize fees.

Conclusion

Both Etsy and Shopify offer sellers a means to deliver their products to customers following online purchases. Shopify imposes a per-transaction fee along with a monthly plan fee. On the other hand, Etsy applies various fees for each sale and item listing but does not charge a monthly fee for its fundamental service. If you are new to selling and lack an existing customer base, Etsy is recommended for those selling handmade goods or artisan services. Meanwhile, Shopify is well-suited for retail sellers who already have an established customer base.

Frequently Asked Questions (FAQs)

Is Shopify an appropriate solution for a small business?

Shopify could serve as an excellent choice for small businesses heavily reliant on online sales. Its user-friendly website builder with drag-and-drop functionality facilitates the creation of a polished and professional-looking website. Moreover, Shopify accommodates an unlimited number of products and simplifies inventory tracking.

What are Etsy’s seller fees?

Etsy entails three types of seller fees: listing fees, transaction fees, and payment processing fees (applicable when using Etsy Payments). Listing fees start as low as $0.20 USD, the transaction fee constitutes 6.5% of the listing price (excluding shipping and gift wrap charges), and Etsy Payments processing fees include 3% of each sale plus $0.25 for domestic orders and 4% of each sale plus $0.25 for international orders.

Is Shopify suitable for small businesses?

For small businesses predominantly reliant on online sales, Shopify proves to be an excellent fit. Offering an unrestricted product capacity and simplified inventory management, Shopify’s beginner-friendly drag-and-drop website builder allows users to create a professional-looking website without the need for a designer.

Which e-commerce platform is optimal for dropshipping?

In 2017, Shopify acquired Oberlo, one of the most popular dropshipping apps. The seamless integration of Shopify and Oberlo facilitates the importation of products to your store, streamlining the process for customers to make purchases.