Selling on Shopify Vs Etsy – Which is Better for Small Online Business

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With the evolution of eCommerce, there is no surprise that people want to start their small businesses online. For this purpose, entrepreneurs seek platforms for their online storefronts with maximum benefits. One of the most important decisions is selecting the right platform that aligns with your business idea. 

Shopify and Etsy are two of the best eCommerce platforms that help you set up your beauty store and sell online. However, new entrepreneurs ask the most frequent question: “should I sell on Shopify or Etsy?”. 

While comparing Etsy versus Shopify, remember that they are both excellent options with salient features. Shopify has advanced features that allow selling on multi-channels, whereas Etsy has basic options that benefit its audience rather than its store. 

We provide a detailed comparison to answer your query, “Should I use Shopify or Etsy?” and guide you to selling on Shopify vs. Etsy.

Key Takeaways

  • Learning about the Shopify and Etsy business model
  • Best features of both platforms
  • Pros and cons of using Shopify or Etsy for your business
  • Price comparison 
  • Differentiating factor in our view

First Things First: Overview Both Platforms

Shopify is an option for small business owners who are in the retail business and want to grow their standalone online store. Shopify offers users to choose their unique domain name while customizing and managing their store as they please. 

Comparatively, Etsy is a marketplace that operates similarly to eBay or Amazon, where a seller can list products. Etsy does not offer the same customizable features as Shopify, as you need to work under their parameters with limited options. 

These crucial points make comparing Etsy or Shopify rather tricky, and some business owners prefer using both in combination. 

We recommend using Etsy as a foundation to test your audience demands and trending products to establish brand identity. After that, use Shopify development services to set up a whole store and scale your business as a brand with best-selling products.

Etsy or Shopify for Beginners – Understand the Features

Shopify

Shopify offers a powerful eCommerce platform with over 90 templates designed for professional websites. You can select a domain name through Shopify or import from a third-party domain/hosting service. Professional eCommerce web design Houston can develop a store using Shopify or Shopify Plus services as per the requirements of customers. 

Shopify also offers a secure payment system that accepts all debit and credit card payments. Shopify’s built-in payments are powered through Stripe, and you can integrate other third-party best payment gateways.

Business owners gain access to many Shopify features for store management. These options include saving customer information (personal and billing), integration with other drop shipping apps, one-click order fulfillment, connection with Amazon fulfillment, analytics, performance tracking, and more.

Shopify also has tools for relationship management and marketing. It supports in-house SEO and integration with social media. If you have a blog, you can use your store’s affiliate links for promotion and offer your customers discounts or gift cards.

Another powerful tool that owners find beneficial is Shopify App Store service. Through this feature, owners can find various apps for integration. You can use the best of both apps to optimize the processes of SEO, promotion, upselling, inventory organization, product review management, and other options. In short, Shopify brings an arsenal of tools and features to set up a full-fledged online store for product selling.

Etsy

Etsy logo

Etsy does not offer to build a different store but acts as an audience aggregation platform. Etsy started as a marketplace to sell handmade crafts or vintage items by artists and creators. Business owners should note that Etsy is a place for unique and original items and is not the best choice for reselling. 

Etsy is a good choice for someone who wants a passive income or side hustle. Etsy works for business owners not ready to put the equity to set, manage and accept payment as a Shopify store. It is easy to open an Etsy store, but you have to abide by their parameters. You can also use this platform as a supplement store for selling platforms other than Etsy, such as Etsy with Shopify integration.

Additional Read: Don’t forget to check out our guide on Squarespace and Shopify integration.

Like Shopify, Etsy store owners have to list their products, connect with customers, and ship orders through a dashboard or app. 

Unlike Shopify, Etsy does not allow the integration of third-party payment options. Etsy allows only payments processed through Etsy, which accepts all modes, including debit/credit cards, PayPal, Google, and Apple Pay.

One of the key benefits Etsy offers is its large audience, so there is little effort for business owners to attract their target market. You can use Etsy’s integrated marketing or integrate third-party tools to boost products and reach your customers. Beginners can also read Etsy Seller Handbook to understand the features and options provided on the platform.

Etsy Shopify App Comparison at a Glance

ShopifyEtsy
Suitable forRetail BusinessesVendors who sell handmade goods
RestrictionsUnlimited Number of ProductsLimited handmade or vintage items
Monthly FeeYesYes
Transaction FeeOnly if Using Shopify Payment Processing6.5% from each sale (includes shipping fee)
POS SystemYes (Shopify POS for In-store and Offline sales)Square Integration
Buy ButtonsYesNo
Multi-channel SellingYes (Social Media)No
Domain Name and SubdomainsYesNo
Standalone StoreYesNo
Marketing FeaturesPowerful and ExtensiveAverage
UsageBeginner-friendlyBeginner-friendly
Customer SupportLive chat 24/7, phone and email supportEmail and phone support only

Is Shopify or Etsy Better – Pros and Cons

Shopify Pros

  • Powerful eCommerce platform with exclusive tools
  • Availability of products in an unlimited number
  • Scalability and easy-to-grow store
  • Multi-channel selling capability
  • Shopify POS for offline sales
  • No transaction fee if using the Shopify payment system
  • You can easily connect Shopify to Amazon in no time. 

Shopify Cons

  • Limited exposure if there is no defined target market
  • Add-ons and tools might be expensive
  • Free trial but no free plan

Etsy Pros

  • Extensive customer base in the Etsy marketplace with an existing audience
  • No monthly fee
  • Quick and easy setup

Etsy Cons

  • Fee for listing and transactions 
  • Restricted products are limited to handmade crafts or vintage items
  • Limited options for branding and marketing

Shopify vs. Etsy Fees – Price Comparison

Understanding Etsy and Shopify fee is essential in deciding if Shopify is better than Etsy or vice versa. Shopify fees when compared to Etsy, help you pick the best place to sell your products or goods online.

Shopify & Etsy Fee Overview

The overview gives you an idea about how much are Etsy and Shopify pricing plan per month and other fees incurred on listing and transactions.

ShopifyEtsy
Subscription FeeLite Plan: $9/mo
Basic Plan: $29/mo
Shopify Plan: $79/mo
Advanced Shopify Plan: $299/mo
Shopify Plus Plan: $2000/mo
Free (for basic) or $10/mo (for added features)
Listing FeeNo Listing Fee20 cents for each listing of 10 slots. Additional 20 cents charged from each sale as a renewal
Transaction FeeNone for Shopify payment but 0.2% to 0.5% for other payment merchants6.5% of the total per transaction, including shipping charges
Fee for Payment Processing2.2% to 0.2%20 cents per listing if using Etsy payment processing
Miscellaneous Costs / Advertising and MarketingDomain fee: $11/year
Themes: $0 - $180
Add-ons: $20-$70
12% to 15%, depending on annual sales
(From $10,000 is 12% and below is 15%)

Differentiating Factors in Shopify Vs Etsy

A key differentiating factor between Shopify and Etsy is that Etsy does not give customer information. You cannot build your customer base outside of the marketplace. The existing customers can like your store and get the notifications accordingly, but you cannot send emails. 

Shopify does not have this issue; you must market your store to your targeted customers and connect with them. You build your customer base, and you still retain your customer information even if Shopify shuts down.

Many business owners who sell on Etsy also contact services of web design Houston for a separate storefront on Shopify. The reason is that Etsy has a huge market that users can leverage for selling, and they cannot do that with Shopify as they need to market their products as per the information collected. This same notion happens with Etsy vs Amazon selling, as the Amazon store needs effective marketing before it makes the first sale.

Shopify vs Etsy – Final Verdict

Shopify and Etsy offer sellers a platform to initiate their online business and connect with their target market. Shopify has a monthly subscription or plan fee, and Etsy is free but charges on each sale and transaction while connecting only with its existing customer base. 

If you are a beginner and cannot decide if Shopify is better than Etsy, remember that Etsy is the best place if you sell handmade items or artisan products. In comparison, Shopify allows you to set up a complete eCommerce store for retail with an established target audience. You can select the suitable platform that resonates with your business mode, products, or target market.

FAQs for Shopify Vs Etsy Comparison

Indeed, Shopify is a suitable option for small business owners to set up their stores and start selling to their targeted audience. If you are a retailer, then Shopify is your best approach to online business.

If you are a business owner and want to scale your business, Shopify is your best choice. The reason is that Shopify allows you to expand your store by adding new products and reaching out to a new audience. In contrast, Etsy allows you to operate within a limited list of products and an existing customer base that is better as a side hustle.

Shopify easily supports the drop shipping business model as you have the freedom to design your store, list products, market, and fulfill orders. Shopify supports third-party tools and payment gateways to take and deliver orders accordingly.

Etsy is cheaper than Shopify as it has no monthly subscription fee. It allows you to set up a free store but charges you transaction, listing, advertising, and payment processing fee. Shopify has various plans with monthly subscription charges and misc. Additional costs are incurred if you use their domain service, add-ons, or marketing tools that might be expensive.

Etsy is a marketplace that allows only sellers, designers, and artists who sell handmade goods or vintage items. There are a limited number of products marketed to an existing customer base of like-minded clients. On the other hand, Shopify allows you to set up a customized storefront, list products, market, and sell products by promoting to your targeted audience. You can also scale your store in Shopify as your business grows.

If you are a seller or an artist who has any handmade art pieces, or excellent or vintage items (over 20 years), then Etsy is your best platform. Etsy allows you to bring your piece in front of an existing customer base of passionate collectors and artists.

Etsy has an established customer base that allows sellers to reach their target market without too much marketing. Etsy operates on a unique product scope that allows artisans and sellers to connect with the right audience accordingly.

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