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March 04, 2023
Buying and selling online requires an e-commerce platform for payment processing capabilities, and knowing which one is best for your business helps you start and continue at the top of your game. Two of the biggest online companies providing e-commerce solutions are Shopify and Etsy, and both have their pros and cons, depending on the type of business you operate. In this article, we'll compare Shopify vs. Etsy in detail, explaining how to use each platform and outlining the advantages and disadvantages of each.
Shopify offers an e-commerce platform to merchants selling all sorts of wares, both online and in-person. Serving over a million merchants in over 170 countries, Shopify sales comprise 10% of total U.S. e-commerce and account for $444 billion in economic activity globally. Here are the main things you need to know about Shopify and the pros and cons of this versatile e-commerce platform.
Shopify confers numerous advantages to its clients, including 24/7 support via chat, phone, and email. Fewer restrictions on products and an unlimited amount of listings give merchants a chance to experiment with marketing, and since you host Shopify on your domain, you control all your marketing, branding, and customer lists. You can also integrate this e-commerce platform with over 6,000 specialty apps to further customize your customer experience.
The main disadvantage of Shopify is that even if your business doesn't sell anything, it still has to pay a monthly subscription fee to keep its place on the e-commerce platform active. Likewise, some merchants don't like having to pay transaction fees on top of the flat subscription fee. Some merchants also have concerns about Shopify's content marketing features because they feel they lag in comparison with other blogging services. Fortunately, third-party plugins typically fix the content marketing issue and make Shopify worthwhile to use for most merchants.
Clear-cut pricing for services makes Shopify the go-to choice for many merchants around the world, small and large. Three packages that are billed annually help sellers pick the level of services they need and better control their budgets. These packages include:
Basic Plan – Shopify's Basic Plan costs $29 per month (billed annually) and provides everything merchants need to create their own storefronts, ship products, and process credit card payments. Rates for online sales run 2.9% plus 0.30 per transaction, while in-person rates at brick-and-mortar locations cost 2.7% with no transaction fee. Equipped for two account holders, this plan also includes basic reporting functionality and 1,000 inventory locations, as well as a 77% shipping discount.
Shopify Plan – Featuring everything in the basic plan plus professional reports, an 88% shipping discount, and 5 staff accounts, the Shopify Plan sets merchants back $79 per month, billed annually. Credit card processing rates for this plan run 2.6% with a 0.30 per transaction fee for online sales and 2.5% with no transaction fee for in-person sales at retail establishments.
Advanced Plan – If your business needs custom reporting, Shopify's Advanced Plan may be just what you're looking for. This plan includes everything the Shopify Plan comes with, plus 15 total staff accounts and a custom report builder. Costs for this plan run $299 per month (billed annually) plus 2.4% credit card processing rates for online and in-person sales. Online sales also incur a 0.30 transaction fee.
If you're uncertain about the type of plan your business needs, you can always try Ultrafade's Shopify free trial. The e-commerce platform itself provides new merchants with a 14-day free trial, but through our offer, your business gets an unlimited amount of time to launch its shop. Ultrafade also assists you to get ready with free "preparing to launch" training, helping you create a successful spot to showcase your brand and receive payment from customers.
While Etsy is considered an e-commerce platform, it also serves as a marketplace for artisans and crafters to sell handmade goods. Using this service requires you to set up your shop on the marketplace and add your products. There are, however, key differences in how Etsy and Shopify work.
If you're selling handmade goods, Etsy is advantageous to use, even if you plan on using Shopify as well, for the built-in traffic it provides alone. The marketplace itself brings together buyers and sellers in a themed space where it's simple to find exactly the kind of artisan goods you want. Community support is also high on Etsy, with many sellers buying from other sellers. Shops are simple to set up and communications are easy between your business and potential buyers.
Sellers who aren't artisans or makers have nothing to offer on the Etsy platform. And while creating a shop is free, there are numerous fees associated with both listing and selling products in the Etsy marketplace. Further, you can customize your shop or add branding, nor can you take customer lists with you if you decide to move on to a different marketplace or platform.
One of the main complaints with Etsy is the arcane fee structure, which third parties have created calculators to figure out for merchants listing on the marketplace. When you sign up with Etsy, you can create a free account or pay $10 per month for the Plus plan.
Free Etsy —Signing up for a free Etsy seller account costs nothing until you add listings, which cost 0.20 per product. If this product doesn't sell within four months, you pay the fee again, and if you have multiple of the same item listed, you pay the fee every time one sells to maintain an active listing. On top of the listing fee, you also pay 5% of your listing price as a transaction fee per sale plus payment processing fees of 3% plus 0.25 per transaction. Keep in mind that if someone purchases your products outside the U.S., you also must pay currency conversion fees.
Etsy Plus —The Etsy Plus plan improves on the marketplace's free plan with 15 listing credits per month, meaning you don't have to pay the 0.20 listing fee for those, and it also provides $5 in Etsy Ad credits. The Plus plan also lets customers request an email when you restock items in your shop, offers added shop customization options, and offers discounts on marketing materials such as custom shipping boxes and business cards.
While Shopify and Etsy are both e-commerce platforms, they're complementary rather than competitive if you sell handmade goods. Businesses that resale goods or manufacture things industrially are better off with Shopify since it has fewer limitations on the type of goods sold, whereas Etsy offers an e-commerce platform with a built-in marketplace for crafters and artisans to sell handmade goods. The ability to use your own domain, control your own marketing and branding, and keep your own customer lists make Shopify the best choice for most merchants looking to expand their online sales. Likewise, if you're an artisan, you consider third-party apps that integrate Shopify with Etsy to maximize your customer base.