shopify vs etsy

Shopify vs. Etsy: Small Business’ Choice of 2021

Products are available everywhere on the internet these days. Thanks to eCommerce and online marketplaces, almost anything we want to buy – from groceries to overseas travels – is just a click away. If you are a business looking to tap into the eCommerce space, chances are that you have already come across two common low-priced solutions to make your products and services available online: Shopify and Etsy. And you are probably asking yourself, “which one is better?” and, more importantly, “which one fits my business needs the best?”

Right off the bat, it’s important to highlight  a core difference between an eCommerce website and selling your products on an online marketplace.

An eCommerce site is a digital platform that you pay to build your digital shop, whereas an online marketplace is an already established website where you showcase your products alongside those of other brands. 

To illustrate this key difference, imagine that you are going shopping and want to make your purchase at a physical retail store; choosing to sell your products on Etsy would be the equivalent of selling your products at a shopping mall. On Etsy, potential customers can browse through your products as well as thousands of other brands, just like someone “window shopping” at the mall. An eCommerce site however, is the equivalent of opening up your own retail shop. Here, customers will only be able to find one brand – yours. 

Keep this analogy in mind as we continue to break down the pros and cons of eCommerce and online marketplaces and help you decide which option is best for you and your business.

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Shopify: A Solution for Businesses on the Rise

Although there are a handful of eCommerce platforms out there, Shopify is one of the leading eCommerce platforms on the market and our personal favorite.

Shopify allows entrepreneurs and businesses to set up an online shop with little to no hassle and to immediately begin building a digital shop with their very own products.

The cool thing about Shopify is that anyone can use it, you do not have to be super tech-savvy to get set up and start selling. 

 

Shopify Pros

  • Hosting 

Hosting is a service that allows all your website’s files to stay uploaded 24/7. Shopify includes secure and reliable web hosting that prevents your site from crashing during peak hours and keeps hackers from messing up your transactions.

  • Creative Freedom

You can get as creative as you want with Shopify. The platform offers many templates and designs to choose from. Whether you prefer a traditional, more conservatives template ,or a sleek and modern template, Shopify helps you bring to life your dream layout and allows you to modify and play around with it as much as you want.

And the best part is with easy-to-use tools like drag & drop, you won’t need to worry about coding. 

  • Quick learning curve

As mentioned above, Shopify was designed for first-timers. Shopify founders designed the platform so that even if you’ve never built a website before, you can easily begin using Shopify to manage your site’s inventory and sales all on one platform.

Their simple interface and clear user experience makes creating your website as easy as possible. 

  • Branding

Branding is important to every business, but for small businesses looking to tap into the digital market it is essential. By giving you all the tools to customize your online store, Shopify allows you to capitalize on your brand power.

By customizing your website’s layout and really thinking about how you want to sell your business to your customers, the platform lets you dictate the user’s experience and highlight the elements of your business that you think are most important.

A well branded website is not only visually appealing but also has a clear and fluid user experience that ultimately yields profit. 

  • Marketing Integrations

One of the benefits of Shopify is the fact that it allows businesses to integrate tools like Google Analytics that provide businesses with insights into their audience.

These tools can give you a better idea of what your ideal consumer is interested in and how you can tweak your website’s content to capitalize on these insights. The goal of such tools is to help you make data-driven decisions to your business.

  • Shopify Blog 

Nothing drives more organic and free traffic than blogging. Organic traffic is the best way to get your brand’s name out there and really capitalize on how search engines rank your business’s website.

Instead of just offering you a platform to sell your products or services, Shopify has a built-in blog tool that allows you to write content and differentiate your brand from others.

It might seem weird at first, but the idea behind blogging is to not only get your site organic traffic, but also give your potential customers practical information about your niche, and what your business stands for. Blogging is another way to draw in more customers, get them interested in your products, and turn them into loyal customers.

 

Shopify Cons

  • Higher cost 

Unfortunately, Shopify is not a free tool like Etsy. With Shopify you can start with a 14-day free trial that will give you the time to get your website up and running, and later upgrade it to full service for $29/month. This monthly fee covers the cost of hosting your website and allows you to add an unlimited number of products to your online shop.

Are there any transaction fees on Shopify? Yes. Depending on the plan that you choose, those transaction fees will vary. For Shopify’s basic plan there is a 2% transaction fee, 1% for the standard, and 0,5% for the advanced.

    • Free 14-day trial
    • Basic – $29/mo
    • Shopify – $79/mo
    • Advanced Shopify – $299/mo
    • Shopify Plus – Enterprise offering for high-volume merchants

 

These fees can seem overwhelming at first, but keep in mind that there are transaction fees related to selling on every platform, including Etsy. However, for you to get your money’s worth it is crucial that you really think about how you are going to market your new website and take advantage of all the features that it offers. 

  • Drive own results 

Going back to our shopping mall analogy, think about the benefits of having your store in a location where people come to window shop and check out all the new trends. Oftentimes you will get customers who stroll by, notice something in the store, and make a spur of the moment purchase.

Perhaps they didn’t go to the mall with the intent of going to your store, but something caught their eye in the window and they were hooked. This is because malls (Etsy) get more foot (organic) traffic than an isolated retail store (your e-commerce site). 

To drive quality traffic to your e-commerce site you need to think about a number of things. Web design, content creation, search engine optimization, and paid advertisement are all crucial areas of digital marketing that can help you get ahead and make the most of your new e-commerce site. 

  • Expensive Add-ons 

Shopify gives you the option to purchase “add-ons” for your online shop, such as a loyalty program, advanced order tracking, etc. While these features can be incredibly useful, they are also a bit pricey.

Yes, these add-ons make your website super practical and enhance your customers’ experience, however, we recommend weighing your options to make sure you are getting the best product for your business at the lowest cost. 

 

Etsy: The showcase for new, low-stock retailers

Etsy is a marketplace, which means that unlike Shopify, where you are able to create your own personalized website, Etsy has its own website and consumer base. Etsy allows you, the business owner, to create your own profile on the platform and showcase your products alongside those of other retailers.

As a business owner you are able to capitalize on Etsy’s trustworthy reputation, great customer support,  and enjoyable user experience, at no cost to you. 

Marketplaces are a great option for entrepreneurs that have little to no time to build their own digital presence or learn new online marketing skills. Since marketplaces are popular and already have their audiences, all you have to do is add your products to their website, sit back, and wait to make your first sale.

 

Etsy Pros

  • Made for new retailers 

If you are a new retailer with a small stock of products to sell, Etsy might prove to be your best option. Its marketplace is geared towards crafted, handmade, and vintage items, so if you check any of these boxes, Etsy isa fantastic choice.

  • Built-in audience 

Unlike creating your own e-commerce site which can be a time and labor intensive process, sellers on Etsy don’t have to worry about boosting traffic or building an audience. If you’re selling on Etsy, you’ll get more exposure than you would on your own online store (at least at first).

The cool thing about Etsy is that it is known for “housing” crafted, handmade, and vintage items, so much so that Etsy is oftentimes consumers’ first stop when looking for something handmade or vintage. If you are in a small business or entrepreneur in one of these three niche markets, selling on Etsy could prove really beneficial.

  • No subscription payment

Etsy is free! Well to be completely transparent, it is not 100% free when you take into consideration their transaction fees.  However unlike Shopify and other e-commerce platforms, Etsy does not have a monthly subscription fee.

This alone is something that can be super appealing to some entrepreneurs and small businesses as they work to get their grounding  and reduce their operation costs. 

*Etsy now offers a paid subscription, called Pattern. Scroll down to learn more.

 

Etsy Cons

  • Limited product categories 

As previously mentioned, Etsy is a marketplace for handmade and vintage items, and that’s it. If you are a small business that does not sell in these markets, Etsy is not for you. Stick with creating your own e-commerce site. 

  • No branding 

Etsy is a place for low-stock retailers who don’t mind competing with other brands for the same space. The presence of other brands makes it impossible for you to develop your brand awareness inside Etsy.

On top of that, there is no room for customizations nor an in-depth customer experience with your brand; in other words, every retailer has the same webpage layout and retailer profile.

  • Inner Competition 

Because your merchant profile and the layout of your products will be the same as your competitors, figuring out how to make your products stand out from your competitors can be a bit tricky.

The main way to make your products stand out on Etsy is by setting your price lower than your competitors. So keep that in mind as you prioritize making sales over building brand awareness.

  • Fees 

Like we mentioned earlier, Etsy is technically free. They do not charge a monthly subscription fee and it is free to create a retailer profile. Instead, you are charged a listing fee for every product you add to the website and a transaction fee and a payment processing fee for every purchase.

    • Listing fee: $0.20 per item to be listed for 4 months
    • Transaction fee: 5% on every purchase
    • Payment Processing: 3% + $0.25 on every purchase

 

For small businesses these fees can add up. Even though you benefit from the free traffic and marketing that Etsy provides, it is crucial to do the math and make sure that selling on Etsy is still profitable for you.

 

Pattern: An eCommerce for Etsy Sellers

As promised, here is a quick look at Etsy’s e-commerce platform, Pattern. We won’t be focusing too much on Etsy Pattern in this post, but it is important to note that it is only available for Etsy marketplace sellers. So if you’re satisfied with Etsy as a retailer, Pattern could be the right fit for you.

In 2017, Etsy launched Pattern, their very own e-commerce platform that allows retailers to create their own online stores. Much like any other e-commerce platform, as a Pattern user you are responsible for driving traffic and sales to your site (Etsy no longer will do that for you). Here are some numbers to consider when looking at Etsy’s e-commerce platform.

  • Pattern allows you to sell a much broader spectrum of products than Etsy’s marketplace so you have an opportunity to expand your niche.
  • The platform costs $15 a month after a 30-day free trial—additional fees not included. You are free to test out and customize, but publishing your website requires payment.
  • Etsy knows its retailers well, so you can expect an easy-to-grasp website builder with Pattern, as most marketplace sellers are short on time for design activities.

 

Truth be told, Pattern may be just what you need to dive into the marketing world with your brand. However, we do want to note that Etsy does not pay too much attention to Pattern. There haven’t been many updates to the platform’s software and integrations in the last few years. 

 

Conclusion

Choosing how and where to display your products is crucial for every online retailer. The best choice for each is not just in where you choose to sell your products, but also in how you supplement your eCommerce store or Marketplace profile with other digital marketing strategies.

No matter what decision you make, whether it is to create your online store on Shopify, setup an Etsy profile, or use one of the many other avenues out in the market today, just know that there is more than one right way to showcase your products online. For entrepreneurs and new sellers who are just starting out and do not have a huge stock of products, we recommend that you check out Etsy.

Although it is meant for niche markets, Etsy is a great low-cost solution to kick off your digital presence. Keep in mind that you won’t have room for customizations nor any branding optimizations on Etsy, as you’ll be sharing the stage with other retailers.

On the flip side, if you are looking to dive head first into the digital space and take on an ambitious yet fruitful course for your brand, building an e-commerce website could be what you are looking for.

It’s a huge step for businesses that want to attract a segmented audience, build trust and authority among their peers, and provide an unique user experience for shoppers, all while improving their sales.

The caveat with Shopify is that you have to take into consideration how you are going to generate the necessary traffic to capitalize on the unique online store that you have just created. Keep in mind that in general an e-commerce site is best suited for businesses that want to build their digital presence over time.

Although driving quality traffic to a website is an ongoing activity that requires a lot of hard work and time on your part, having your own e-commerce shop can boost your business brand awareness amongst your target audiences, and have  major returns for in the long run. 

Regardless of your familiarity with navigating the digital marketing sphere, if you are struggling to figure out the best way to sell your products/services online, let SomneoX help you. We’re a team of qualified digital marketing experts that are truly passionate about helping like minded entrepreneurs.

We are ready to connect with you and to figure out how we can help you and your business. Give us a call at +1 407 – 912 – 0794 or email contact@somneox.com and let’s talk about your current branding situation. Together we can  solutions to all your digital marketing needs. 

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