Shopify vs Etsy: Which Platform Should You Sell On?
Estimated reading time: 13 minutes.
What do a pair of snowboarding, outdoor enthusiasts and an urban apartment-dwelling creative have in common?
All were entrepreneurial founders of two of the most popular and successful ecommerce businesses in the world to date: Shopify and Etsy.
They built the tools to enable imaginative sellers like you to bring your products to the world.
But which is right for your business?
If you sell craft, handmade or vintage items (which meets Etsy’s criteria), and you’re unsure whether to kick off with Etsy marketplace or go solo with Shopify, this guide is for you.
Can you make more money and spend less time doing it on one over the other?
Let’s find out.
In this Shopify vs. Etsy guide:
Table of Contents
Shopify and Etsy: From Humble Beginnings to Global Players
In 2004, Tobias Lütke and Scott Lake created an online store called Snowdevil to sell snowboarding equipment - a niche product. But they couldn’t find the right tools to build their store the way they wanted to.
So Lütke built his own. In 2006, Snowdevil became Shopify.
- More than 1 million online and brick-and-mortar businesses use Shopify to manage their sales.
- In 2020 it was used by 1.7 million businesses in 175 countries.
- And at the beginning of 2021, more than 19 million monthly active users were on Shopify.
Etsy’s story is similarly intriguing.
Rob Kalin, the co-founder of Etsy, along with Chris Maguire and Haim Schoppik, wanted to “reimagine ecommerce in ways that build a more fulfilling and lasting world.”
They launched Etsy in 2005, with the vision of being the world’s largest online platform for connecting makers and buyers of niche, hand-crafted products.
- By 2020, the Etsy platform had more than 4.3 million sellers and 39.4 million buyers.
- That same year, it saw a whopping 1.7 billion USD in annual revenue.
So, they’re both big. And they’re both successful.
But how do they differ?
The Key Differences
Shopify is an ecommerce platform with the tools to process and scale online sales of products.
There is no existing audience, so sellers need to build their brand awareness from the ground up.
Shopify powers many brick-and-mortar stores, as well as ecommerce sellers.
Etsy’s an online marketplace with a captive audience buying niche craft, handmade and vintage goods.
As a buzzing hive of existing sellers and buyers, there is a little less to do to get set up on Etsy - but there are a few more rules to follow.
Let’s explore in greater detail the various aspects of selling on each platform, and how that may inform your decision.
|You can start with a 14-day free trial and then choose your monthly subscription.||There’s no free trial for Etsy. You create an account and open your shop by listing a product.|
|You have greater customization options whilst setting up, with theme templates on offer to help.||You can upgrade to Etsy Plus for more tools, resources and greater customization.|
|You may need to purchase a domain to avoid having “Shopify” in your shop URL.||Etsy Pattern is a platform that you can expand onto once you’ve been selling for a while, which gives you more creative freedom.|
The bottom line
Both are easy to set up, but Etsy is a lot quicker. On Shopify you pay subscription fees, on Etsy you pay transaction fees.
What you get for your money
|There are three main subscription plans for Shopify: Basic ($29/mo), Shopify ($79/mo), Advanced ($299/mo).||Etsy is free to set up and there is no subscription fee (unless you upgrade to Etsy Plus).|
|There’s also Shopify Lite for adding Buy buttons to blogs or having POS capabilities for market stalls.||Listings cost $0.20c, and stay active for four months before you need to relist and pay again.|
|All plans give you the following features as standard: Unlimited products, Unlimited bandwidth, and online storage, Shopify point of sale, Gift cards, Online sales channels, Fraud analysis, Manual order creation, Discount codes, Staff profiles, Overview dashboard, Finance reports, Customer support.||The Etsy Plus subscription is $10/mo and gives you: 15 listings credits, US$5.00 Etsy ads credit, Restock requests for customers to opt into, Advanced store customization options, 30% discount on promotional materials ordered through Moo.|
|You pay zero transaction fees with Shopify Payments.||Pay a 5% transaction fee (of the full value) for each sale.|
|You pay a credit card fee for payments made, whether through Shopify Payments or another gateway.||If you opt for Pattern by Etsy at a later date, you get a 30-day free trial before paying $15/mo.|
|There are a host of Shopify apps available in its marketplace to add to customer experience, or automate some of your tasks.||Etsy allows for third-party app integration through APIs. These are external to Etsy.|
The bottom line
Paying monthly subscription fees and nothing per transaction may prove easier when it comes to your accounting for Shopify. Then again, you may need to spend more on advertising to boost your traffic and sales.
Etsy comes with lots of little costs that all need to be accounted for to understand your margins and profitability.
Whether one is more economical than the other depends on numerous factors: what you sell, what you charge, your stock volumes and transaction volumes.
The costs are probably not different enough to make them a core concern when choosing between platforms - there are other, larger differences which should perhaps have more sway in your choice.
Payment gateways, processing and payouts
|Shopify Payments is the platform’s integrated payment gateway.||Etsy Payments is the integrated gateway for the platform.|
|In the countries where it is available, you can collect multiple currencies and use the service for free.||You can collect payments in multiple currencies but there are some country-specific limitations.|
|There are credit card rates per transaction.||There are payment processing fees on top of transaction fees.|
|You’re charged credit card rates per transaction.||You’re charged payment processing fees in addition to the standard transaction fee.|
|Customers can also pay you via PayPal, Google Pay, Apple Pay, Amazon Pay and Shop Pay. These will be subject to extra fees.||Customers can also pay you via PayPal, Google Pay, Apple Pay, Mastercard, American Express, Visa, Discover, iDeal, SoFort, Klarna or Etsy Gift Card, through Etsy Payments.|
|By default, as soon as net funds from a sale clear, the payout will be deposited into your account. This can take around 72 hours. If you opt to set up a payout schedule, you can decide how regularly to have your net funds deposited to your bank account.||You set a schedule for having net funds deposited to your bank account (e.g. weekly).|
The bottom line
Both platforms have their own integrated payment solutions for ease of use and streamlined operations.
Having said that, they also offer other popular options too.
Both platforms give you some flexibility as to your payout schedule.
Marketing and advertising
|Shopify isn’t a marketplace facilitator like Etsy, so driving traffic there is all on you.||Etsy is a marketplace facilitator and puts your products in front of a huge global audience.|
|You have control of your own brand and marketing.||Etsy has some control over your marketing and you may be opted into its ads. For smaller stores, you can opt out of these fee-paying ads but larger stores can’t.|
|There is a huge range of Shopify apps to market your store, and boost your sales, which can be integrated easily.||There are some Etsy apps you can integrate with your store for marketing.|
|Etsy has the resources for you to create targeted offers and coupons to your customers.|
The bottom line
Since for Shopify, you need to build your brand experience from the ground up, you will have greater options and freedom to run marketing campaigns exactly the way you want to.
The apps and technology exist for you to design your own Shopify sales funnel and try whatever methods you think will make sense for your audience.
With Etsy, you’re limited by the tools on the platform.
You also need to abide by its rules, and one of those which has proved unpopular, is the off-site ad program. You are opted into this by default and pay fees on customer clicks - smaller sellers can opt out, but larger sellers can’t. Read more about it in our Etsy advertising guide here.
The pay-off on Etsy? An established buyer base that is already looking for you.
Dashboards, reports and analytics
Shopify’s merchant dashboard looks like this:
There’s a lot of valuable information here, including:
- Total sales
- Repeat customer rate (great info if you’re building brand loyalty!)
- Total online store visits
- Total orders
- Average order value
- Conversion rate
The Etsy dashboard, depending on your store type and channels, can look like this:
Etsy’s shop dashboard includes the following information:
- Shop advisor for alerts, notifications and overdue tasks
- Recent activity of orders, reviews and favorites
- Open and unpaid orders
- Stats overview for orders, revenue, views and listings
The bottom line
You can access reports and analytics for both platforms, in order to make smart decisions for your business.
Shopify reports may be more detailed, so for businesses wanting to expand quickly or limitlessly, this might be a better fit.
|You can fulfil your own orders or outsource fulfilment for Shopify.||You can also fulfil your own orders or outsource on Etsy.|
|Shopify has its own Fulfilment Network which may rival Amazon FBA in the near future. Sellers can outsource storage and delivery entirely to Shopify.||Etsy doesn’t provide its own fulfilment network. For sellers wishing to outsource, they will need to find a third-party solution.|
|Amazon Multi-channel Fulfilment is an option for Shopify and Etsy sellers.||Amazon Multi-channel Fulfilment is an option for Shopify and Etsy sellers.|
The bottom line
Shopify offers a fully outsourced solution for fulfilment, designed specifically for its sellers.
Etsy doesn’t have this option, and instead offers a wealth of information, tips and resources to help its sellers manage it themselves.
The network with potentially the largest reach open to both platforms is Amazon’s MCF program. You don’t need to be an Amazon seller as well, but you do need an Amazon account.
|Shopify offers 24/7 online support, as well as a community forum and help center.||Etsy Support helps you to solve most issues you may have as a seller.|
|Shopify Compass lets you learn from leaders in the business with courses.||Etsy’s Seller Handbook is your go-to for all the guidance you need in selling on Etsy.|
|Shopify’s blog is updated with news and information regularly.||Etsy’s journal is also updated regularly with news and information.|
The bottom line
Both platforms provide customer support to sellers, and they have a wealth of resources online for free covering a range of topics.
The Alternatives to Shopify and Etsy
Are there better options out there for sellers? Let’s find out.
Etsy vs. Shopify vs. Storenvy
Storenvy offers something a little different from Etsy or Shopify.
Also a home for trading artisan and indie brand products, it’s a custom online store and social marketplace rolled into one.
Storenvy Marketplace enables you to quickly and easily open and customize your online store and market your products to, and engage with, potential buyers and supporters of your brand. Like Etsy, there are already fans browsing the site, looking for products.
You can use the ‘Follow’, ‘Watch’, ‘Envy’ and ‘Collect’ functions to engage with other brands - and so can your buyers. A product that has many ‘envies’ will get noticed by other prospective buyers.
You won’t get the spectrum of add-ons offered by Shopify or Etsy, but your online store can be integrated with a range of paygate options.
Etsy vs. Shopify vs. Amazon & eBay
Amazon Handmade is dedicated to handmade or unique craft items, giving it similar appeal to sellers and buyers who use Etsy. An advantage of Handmade is that products listed there also appear in Amazon’s general listings, which means that your products may get in front of more buyers.
eBay allows you to sell individual items, or open an eBay store. If you’re an artisan or niche product seller, selling on eBay won’t offer you the same level of brand-building capacity as Shopify or Etsy.
Why choose just one?
Ecommerce marketplaces are becoming saturated with billions of businesses moving into the digital space.
Many sellers are dealing with this by expanding their sales channels and using multiple platforms.
This can increase reach, decrease competition and make a business more resilient too.
Platforms have responded by giving sellers the tools to integrate their businesses across channels - like the Etsy widget for Shopify. And for those platforms that don’t integrate, API programs like Sellbrite act as the mediator between them all.
What to Ask When Choosing Your Platform
Still a little confused which platform is right for you?
The resounding question to ask yourself when choosing between a marketplace facilitator and a store builder is:
Are you willing to compromise existing sales traffic for more control?
If you’re thinking yes, you would rather have greater control, then Shopify is your best fit.
If not, then Etsy may be your answer.
Get Your Accounting Right, No Matter Your Platform
Regardless of where you sell, your books need to be accurate to survive and to thrive.
But neither Etsy nor Shopify give sellers everything they need.
Ecommerce accounting is unique, and sellers have to reconcile more transactional data than other businesses. Integrating your platform with accounting software is the first step to seamless, automated books, but the next step is crucial if you want accurate numbers quickly too.
A2X captures all the transactional information that is associated with your bank deposits. Each deposit could represent multiple line items, which aren’t always split out in your statements from your platform.
Imagine processing thousands of transactions a month and needing to manually calculate how much sales tax was included in the deposits, or shipping costs, returns, reimbursements, fees - that’s a time-consuming way to do business.
A2X does this for you. It splits any statements that span months and organizes books via the industry-approved accrual method for easy and accurate forecasting.
FAQs and Helpful Tips
Is Shopify better than Etsy?
Shopify is better for sellers that want full control over their website design, user experience, operations and marketing.
Etsy is better for sellers that want to join an established marketplace with existing traffic, templates for selling and a community all based on the same platform.
Does Etsy use Shopify?
Etsy does not use Shopify. However, there are ways in which you can integrate a Shopify and an Etsy account, for example through coding APIs, or purchasing an app such as Sync & Sell from the Shopify app store.
Is it better to sell on Etsy or your own website?
If you want full control over your store, branding, listings, products and marketing, then it’s better to use your own website. You won’t get Etsy traffic, templates, reports or resources, so if those are important to you then stick to Etsy.
You can link another website to Etsy, but customers must complete checkout within Etsy. You can’t send customers on Etsy away from the site to complete checkout elsewhere.
Is it worth it to sell on Etsy?
The top Etsy sellers make around $10,000/year or more. It is possible to be profitable on Etsy, just like any other ecommerce platform. If your business is well suited to the Etsy platform, and you have a strong business plan, then yes, it may be worth selling on Etsy.
Also on the blog
- The A2X Shopify Accounting Hub
- How to Set Up Your Etsy Seller Account
- How to Sell on Shopify in 2021
- The Best Products to Sell on Shopify in 2021
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