Shopify vs Amazon: Deciding Your Platform for Online Sellers

Today I want to tackle some important topics around eCommerce platforms for online businesses. As an eCommerce seller, it’s important to understand the stark differences in aligning yourself with various companies – from a general brand point of view and a cost-benefit analysis point of view. In choosing the right partner for your online business, I strongly believe it comes down to your business goals. In the article, I will discuss more of what I mean by that. Both Shopify and Amazon are good in their own ways, and both sides have strong advocates. You should ask yourself many questions before deciding which platform to work with.

Questions such as what are my overall costs? Am I getting enough ROI? What’s the customer service like? Do I feel valued and respected? Is this an equal relationship? What are the advantages and disadvantages? Today is the battle of the brands. So, let’s discuss Amazon vs Shopify.

 

Table of contents

1) What is Shopify?

2) What is Amazon FBA?

3) Shopify vs Amazon pros and cons

4) 3PL Costs

5) E-commerce seller Competition

6) Customer acquisition and transparency

7) Shopify vs Amazon: Which one should I use?

 

What is Shopify?

Shopify is the leading eCommerce platform for small and medium businesses. It is a cloud-based, multi-channel solution that includes tools for merchants to design, set up, and manage their stores. It allows you to make money without having to worry about things like hosting, SSL certificates and other technical matters. It is an excellent platform for new and experienced entrepreneurs. Shopify lets you focus on what you do best: selling your products!

Shopify is a complete, ready-to-use eCommerce for small businesses, selling anything from t-shirts to technology and anything at all in between. It’s simple and intuitive, allowing you to easily manage every aspect of your business, from inventory to customers.

Shopify does not offer third-party logistics (3pl) themselves; however, their app integrations allow you to connect online with a 3pl provider – like Selazar. This way, you can automate your eCommerce fulfilment while using Shopify as your online storefront.

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What is Amazon FBA?

Amazon FBA (Fulfilment by Amazon) is a fulfilment service offered by Amazon, where sellers store their products at Amazon’s fulfilment centres and ship them to customers when purchased. Besides offering the online marketplace to sell products, they also provide the same functions of a 3pl – meaning they store, pick, pack and deliver. They also handle customer service and returns if necessary.

This large integration of warehousing and online services allows sellers to store their items in one or more of Amazon’s fulfilment centres. When an order is made online, all orders are shipped and delivered through Amazon – which can be very enticing. Amazon FBA product offerings are made up of over 50% of third-party sellers.

So, as you can see, Shopify is more about building a great website from scratch to sell your products – while offering third-party fulfilment services. Amazon is basically a one-stop shop marketplace that allows you to reach many people quickly – but no website.

 

Shopify vs Amazon pros and cons

For more clarity, below are the differences between Shopify and Amazon. Whether you’re a newbie or an established brand, you can easily see the advantages and disadvantages for your own business.

Shopify

Pros

• Simple professional templates for building your online store

• 90-day free trial

• Free Shopify payments

• Affordable

• Access to numerous eCommerce tools and apps like eCommerce fulfilment

• You have complete control over your store and operations

Cons

• You must drive online traffic to your store yourself

• The more apps you need, the monthly cost may increase

• Need a self-promoting marketing budget

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Amazon

Pros

• Access to a worldwide audience immediately

• Can get set up relatively quickly

• Warehouse storage and product shipping automation

Cons

• Highly saturated marketplace

• Lots of selling fees and storage costs

• Price wars with competition

• Your seller score could affect your sales

• Lots of regulations and red tape

To summarise, business goals matter here. Your approach will vary if you’re looking to make a quick buck and offload some stock. If you’re building a long-term brand and want customers you can reach out to, resell to, and develop a relationship with, then that approach should be different.

To be fair here, you can see the many benefits of both companies. Amazon brings a lot of value to the marketplace. However, there are a few more technicalities that eCommerce sellers should be aware of.

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3PL Costs

Some of the strongest critics of Amazon FBA include complaints about fees. Obviously, in exchange for services, Amazon needs their own profit. After all, as an independent seller, you’re utilising their platform and fulfilment centres. However, how much is too much? This is where the numbers start to matter – and you need to pay attention.

Profit sharing

Something that is not common with 3PLs is product profit sharing. Typical 3PLs charge you for storage fees, pick and pack services, and courier charges. Amazon, on top of those fees, also takes a small percentage of every sale you make for your products. Fees for your products can range from 15% to 40% before other charges.

Seller Subscription fees

To be an amazon seller, you have two options. You can sell as an individual or a professional. One charges a £.99 fee every time you make a sale (individual) – or pay a monthly subscription fee of £39.99.

Long-term FBA storage fees

Like any warehouse, you will have monthly storage fees. Many of them are comparable in price. What differs with Amazon is “long-term” storage fees as well. This acts like a penalty. If any of your products have sat in their fulfilment centre for 365 days or longer, you will be charged £6.90 per cubic foot of storage used or £.15 per unit, whichever is greater.

So, if you’re trying to grow your business and have multiple product offerings, you run the risk of a lot of charges.

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One of eCommerce sellers’ greatest advantages is using Amazon to sell their products. After all, Amazon is the largest online marketplace for products. However, it’s important to be aware of some of the most common frustrations and downfalls for many FBA sellers.

Price wars Amazon (Getting priced out!)

Price wars are very common on Amazon. Many eCommerce sellers assume that by putting products on Amazon, they will get a multitude of sales. It should be automated and easy with so many potential customers, right? Some of the more seasoned sellers know it’s not. This is because the competition is rife on Amazon.

Many brands carry the same products with the same quality because they’re from the same manufacturer, whether at home or abroad. Avid sellers are used to this on Amazon. They have perfected the systems, the manufacturing, the relationships, and the price points. They have done it for so long and have made so much profit that they can drop their prices and essentially eliminate you from the competition. It can be a large uphill climb for someone who is just trying to get started. It’s the classic story of the big box brand crushing the little box brand.

Copycat branding by Amazon with third-party retail brands

Copycat branding is common everywhere in the world. What it means is that a business or entity will deliberately mimic a brand to compete with it directly. Established grocery stores do this all the time. They will create their own food products and make the branding similar to third-party products they sell on the shelves! Some wonder how it’s even legal – so do I. Unfortunately, this is the same situation many Amazon sellers are finding themselves in.

Amazon looks at trends and will create its own products at significantly lower prices and expand its private-label brands. Many believe Amazon runs a systematic campaign of creating knockoff goods – though Amazon has vehemently denied this. Amazon runs their own private label company so that you could be competing with them.

Customer acquisition and transparency

Building a brand requires raving fans. Customers are attracted to products, but they’re also attracted to values. What does the brand stand for? Eco-friendly? Natural ingredients only? Social philanthropy, etc. When they buy your products and sign up to receive emails from you, you have the opportunity to remarket.

However, with selling through Amazon, you are never allowed to retarget customers. They don’t allow access to their customer database. So, though you may still be able to sell well with Amazon, you’re not nurturing that relationship. If you’re a brand trying to scale and develop a community, I wouldn’t recommend them.

Remember that 65% of business comes from existing customers, so you want repeat business if you have multiple product offerings. Repeat customers are a valuable asset.

Shopify vs Amazon: Which one should I use?

For the reasons above, I would recommend using Shopify and their 3PL services integration. Costs matter, but so does branding and having complete control over your internal operations. However, to be democratic, many sellers also choose to sell on multiple platforms. If you’re still on the fence, you could consider selling on both eCommerce platforms. Utilising several channels, your brand could do some testing and analytical due diligence – then decide what’s best overall after you get some first-hand experience. Hopefully, this article has given you some key insights on Shopify vs Amazon. Should you be interested in integrating your Shopify store with our 3pl services, contact us today for a free no, obligation discovery call.

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Fulfil orders with Shopify Fulfilment Network: Selazar integration

Selling with Shopify is one of the best ways to sell your products and fulfil orders online today. However, all the work doesn’t stop as soon as the customers buy your products online – but where it begins! This is where the order fulfilment process starts and a whole lot of people work diligently to get your products to your customers quickly.

Learn below how the Shopify fulfilment network integrates with Selazar – and why you need to pay close attention to the 3PL provider you choose as your online fulfilment centre.

 

Table of contents

1) What is eCommerce fulfilment 

2) Advantages of selling with Shopify

3) Types of eCommerce order fulfilment

4) How to integrate Shopify fulfilment with Selazar

5) How 3PL logistics streamline your order fulfilment

6) Shopify and Selazar fulfilment manage and scale your operations

 

What is eCommerce fulfilment?

Ecommerce fulfilment is the process of storing, picking, packing, and dispatching customer orders for your eCommerce store. We house your products, organise them, and deliver them quickly through our courier networks.

As a third-party logistics provider, we are a partner in your business. We automate the entire delivery side of your operations, so you do not have to. Because we have the warehouse space, the staff, and the experts in our field, we do fulfilment better while bringing down your costs.

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Ecommerce fulfilment allows scalability and flexibility

Outsourcing your operations puts your business in the ultimate position for quicker scalability. One of the biggest reasons companies don’t grow is because they simply do not know how to leverage their money and resources. When you sit down and do the math – the cost of you hiring more people “in-house” and increasing warehouse space while paying utilities and mailing costs, insurance, etc. Adds up!

If you get clear on your business goals (and hopefully that means growing), it’s only logical to outsource fulfilment. Fulfilment services give you more freedom and allow you to focus more closely on other business priorities. You can focus on marketing, customer service, partnerships, or any other element really helps you scale.

To put it simply, you can sell more and work less!

 

Advantages of selling with Shopify

Because your website is the face of your eCommerce business it is critical to choose a company that offers the right platform for your sales channel. One of the most reputable companies in the space is Shopify – serving over 2 million daily active users.

With Shopify, you don’t need any technical skills. There are ready-made website templates that are easily editable, and their integration library contains numerous other platform tools for selling. It’s really your one-stop-shop for selling online.

Other advantages include:

  1. Marketing tools
  2. SEO tools
  3. Flexible selling tools like coupons & various payment options
  4. Outstanding landing pages for Google Ads or PPC social ads.
  5. SSL certification and PCI to encrypt data for heightened security

 

Types of Ecommerce Order fulfilment

1. Self-fulfilment

Self-fulfilment is when eCommerce brands manage the entire fulfilment process from end to end. This is the obvious scenario for many growing and medium-sized businesses. Whether you have your own warehouse or work from a single location, this can cause unnecessary headaches. This means packaging orders and packing slips and filler and sending them off. This takes precious time away from your operations. Many Ebay and Etsy sellers do it this way and have to personally mail packages which takes lots of time. It’s not as efficient when you have multiple orders and must package items and run them to the mailbox. Delivery and dispatch speed is critical for eCommerce selling.

Remember that eCommerce order fulfilment includes:

1) Inventory storage

2) Order processing

3) Picking & Packing

4) Shipping

5) Reverse Logistics

Self-fulfilment is full of hidden costs that you may not be aware of. As orders increase, more storage is needed, and therefore eventually a bigger labour force. When seasonal peaks happen across sales channels and you’re not prepared, you set yourself up for order delays and significant refunds. 3PLs also negotiate the best prices on courier deals as well so you may not be getting the same discounts as third-party logistics providers.

2. Dropshipping 

Ecommerce sellers for Shopify drop shipping UK businesses is an option where the manufacturer sends the products straight to the warehouse. This seems like the most appealing and convenient way – however, there is a risk of overlooking quality checks on products. Sending packages that are wrong and/or damaged is a quick way to lose customers – and revenue. Bad reviews will build up and before you know it, you’re underwater.

Also, if your manufacturer mislabelled anything in your stock your provider will not know what to do with it. It can sit in storage for prolonged periods, and you can lose more money and time. Caution needs to be observed with drop shipping operations. Inventory management is critical for eCommerce warehousing.

3. Third-Party Logistics

Whether you’re a medium level business or a large enterprise recognised eCommerce brand, Shopify shipping is also managed with third party logistics. 3PLs are responsible for your entire fulfilment process from end to end. A Shopify 3PL provides storage in a fulfilment centre along with necessary labour, materials, and technology. All your specifications in relation to orders will be customised to your business needs and requirements such as custom packaging. Parcels can be shipped quickly and the fulfilment process is handled with expertise. The Shopify fulfilment network offers this – with 3PL integration for Selazar.

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How to integrate Shopify fulfilment with Selazar

There is a myriad of services and operations we offer around logistics and warehousing – making sure your packages are picked, packed, and delivered quickly. However, it doesn’t only stop with the physical operations. We offer digital services as well. We are what is known as a software with a service (SWAS). This is where our partnership with Shopify fulfilment comes into play.

For Shopify customers, we offer digital integration through the Shopify store, easily connecting your website in real-time. Selazar can be found within the Shopify shipping apps. With Shopify shipping apps, you have the option to integrate many services. Once you integrate with Selazar fulfilment, you are digitally set up to fulfil orders. However, the next step is to get physically set up. This means sending your stock to one of our warehouses for the inbound stock process (ISP).

When this is set up and you are a registered partner of Selazar, your custom-built inventory management portal gives you complete control. This is not offered by every 3PL provider. An in-house tech team delivers on key elements by providing our proprietary software so you can easily manage from anywhere, on any device. This is a complimentary service that is offered at no extra cost to you as well. The integration with Shopify fulfilment allows you to sell and manage inventory with ease.

Thanks to features like two-way stock sync, the warehouse is notified as soon as your customer purchases an order. So, as sales come into your Shopify store the Selazar portal automatically updates in the warehouse to fulfil right away. You can easily log in and see the progress of all your orders so that you are updated and aware of what is happening with your stock. You can see when the orders were picked, packed, and dispatched.

The benefit of “in-house” IP is that we allow the technology to deliver the best solutions for our clients in a practical user-friendly way. No more outdated spreadsheets and inadequate warehouse management systems.

No-fuss – Just simple, hassle-free inventory management.

Any deeper questions on the mechanics of integrating your Shopify store with Selazar simply go to our support article.

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How 3PL logistics streamline your order fulfilment

Below are some ways that third-party logistics streamlines all the necessary requirements for your eCommerce fulfilment needs. From storage to your customers’ front door 3PL services make life for your business care-free.

Next–day delivery

Did you know that only 70% of consumers choose to purchase goods based on delivery options? With the rapid implementation of online retail (especially during Covid), consumers want faster delivery. Same day dispatch and next day delivery are becoming the industry standard. What is the best way to crush your competition? Offer quicker delivery. It’s a major customer touchpoint that will win you sales and retention. Our industry-leading dispatch times are longer than the industry standard. All orders made before 7 pm are guaranteed same day dispatch.

Pick & Pack precision

Tech-led solutions to picking and packing orders mean that the right product goes to the right box with the right delivery details. Automating this process decreases errors that are caused by antiquated warehouse mismanagement methods. Technology provides superior solutions that offer 99.9% accuracy.

Custom Packaging

For brand focused sellers, do you need custom packaging? This will also be provided for you, down to the final detail of your needs. You can work with a 3PL like Selazar to customise every detail of your boxing needs from custom boxes to fillers, and more. This isn’t offered by every logistics provider, like FBA.

 

Shopify and Selazar fulfilment manage and scale your operations

Technology allows anybody anywhere to get a business up and running fast. By leveraging the best software and physical services through the power of eCommerce automation – you can thrive. Shopify is optimized to be your online selling machine. By using Shopify with Selazar, you can easily manage your entire eCommerce business. With tech-first solutions from both Selazar & Shopify – this guarantees efficiency, order accuracy, and delivery speeds that will rival your competition. If you’d like to start outsourcing your eCommerce fulfilment with your Shopify store, set up a free, no-obligation discovery call today.

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