Just 5 years ago our question here wouldn’t create any type of discussion – hands down, Amazon was the better choice. Shopify has matured a lot since then, and depending on your goals, might be a better choice. The Amazon vs Shopify debate is something we talk about a lot internally, and I know DTC brands are changing their perspective recently as well. Of course, many brands use a hybrid model, but focus on one or the other, which is the perspective we are taking here.
In short, Amazon is for speed and sales, while Shopify is for building and branding.
At a meta level for every brand there are a few things to consider before deciding to launch on either platform, which we’ve compared quickly in the table below. Later on, we will delve into a few specific items that need more consideration
What is your Product?
The important thing to consider is how important each of the above items are to you, but beyond the tools both offer, the product you have is crucial to deciding on what is a the best platform for you. Is your product cheap or expensive? Will people care about the brand? There are situations where one would be better than the other:
- Hot new product, short sales cycle – We recommend Amazon. A friend of mine years ago launched an accessory for the iPhone that was a physical handset that plugged into the audio jack. He knew that he was only going to get 1.5 years of good sales. In this case, it’s not worth investing the time to develop a good Shopify store. That money could be put to use running Amazon advertisements or hiring a firm to optimize your products pages on Amazon. By the time you’ve developed the brand a little, the sales cycle is over
- Product in upcoming niche space – We recommend Shopify. If immediate sales aren’t even going to happen, then we recommend Shopify. While your market develops, you can spend time developing your story, marketing strategy, and refining product.
- Your Average Order Value (AOV) is low – We recommend Amazon. Shipping cheaper items is difficult to do independently. Amazon can do this a lot easier as they are often combining orders from different vendors into one shipment (Add-ons).
- You AOV is high – We recommend Shopify. To more expensive the item, the more branding is necessary. It’s difficult to convince someone to spend a lot of money finding you on Amazon, with only anonymous reviews to go by. People need to be warmed up to the brand and a well-design Shopify store is the better way to do that.
What is your Brand?
The importance of the niche you occupy has to be thought out a bit. Is branding truly important for what you are selling or providing?
- Your brand is about sustainability – We recommend Shopify. Shopify has made it clear that sustainability is important to them. They allow sellers to offset their carbon emissions through an app,
- Your brand is about health – We recommend Shopify. If you are selling a biomarker product like Levels, where their is a journey involved on the customer side, you need to be as close to the customer as possible. You just don’t get customer info through Amazon, so you can’t keep communicating with people who have bought the product.
- You are optimizing for customer reviews – We recommend Amazon. There are a huge number of brands that make Amazon reviews the main marketing outlet they use. Sometimes this can be done easily because the product type lends to easy reviews (ex niche kitchenware), or you have a low cost way of getting reviews (ex product seeding can be cheap in countries with low minimum wages).
- Community will be very important – We recommend Shopify. Creating a community isn’t impossible with Amazon, but it can’t be actively managed like it can be on Shopify. With you managing your customer list, and having emails, you can easily create attractive newsletters through Shopify marketing tools.
Amazon vs Shopify Considerations and Conclusions
Because no two companies are the same, we can’t recommend one over the other – your specific product and brand type will determine that. That being said, our current favorite to focus on is Shopify.
It all comes down to how important the brand is to you, and what your time frame is. If branding is needed for your product and niche, and you are playing the long game, Shopify is your choice. Amazon can be used if the products are cheaper, people don’t care about brand for the specific niche, or you plan on doing this for less than 5 years. If you are too successful on Amazon, they may just end up trying a very similar Amazon branded option, like Peak Design recently learned!
The Amazon vs Shopify debate will continue here at Synkun, and we will continue to post opinion pieces as they compete and add new features.