There are a lot of makers and shop owners on Etsy who may be wondering whether or not the platform is the best option for them and their business. Especially given the recent announcements regarding the increase in fees on the online marketplace, shop owners may be wondering whether another platform, like Shopify, might be a better fit for them.
At BentoSMB we’re Shopify Experts, so we’re clearly fans of the platform. That being said, marketplaces like Etsy have their positives as well. This post will outline some of the key differences between Etsy and Shopify, and why, ultimately, we believe that Shopify makes the most sense for most ecommerce business owners.
Etsy is an online marketplace, that provides makers with a platform to sell their products. Launched in 2005, roughly 2 millions sellers have sold products through the service, to more than 33 million buyers.
Shopify, is a fully-fledged ecommerce platform, that provides the infrastructure for business owners to develop and own their own online stores. The platform was launched back in 2004, and has grown to over 600,000 active merchants.
Online Marketplace vs. Online Store
The key difference between Etsy and Shopify, is that Etsy is a marketplace, whereas Shopify is a fully-fledged ecommerce platform.
With a marketplace, everything happens within the platform. In this case, Etsy hosts the shops, controls the search and ranking functionality, brings the customers, manages customer and seller communication. They effectively control the entire seller and buyer experience and relationship.
Generally speaking, with marketplaces like Etsy, Amazon, or eBay, customers don’t search for specific brands or shops. They just search for the product they want.
In offline terms, think of it as having a booth at a local flea market. Chances are most customers are coming to check out the flea market, as opposed to coming specifically to see your booth.
Online stores, such as those hosted on Shopify, are their own entities. While Shopify provides the store hosting, they don’t act as a marketplace or a platform for consumers to come to search for products or brands. As the store owner, you own every piece of the online experience, from the brand and look of the website, to the customer communication, and total customer experience.
Take Stinson Studios for example. They’re not listed in a marketplace - they own their own Shopify store. You would never know what platform they’re running on though - and that’s kind of the point.
Again, in offline terms, instead of renting a booth at a Flea market, Stinson Studios owns their own physical store.
Benefits of Etsy
Etsy can be a fantastic way for new makers to get their start with ecommerce. It’s quick and easy to get a shop set up, and, perhaps most importantly, millions of customers already use the marketplace.
You don’t need to worry as much about website development, driving traffic, customer email notifications, heavily customized shipping settings (you do manage your shipping settings, but they’re quite simple), and everything else that goes with owning and managing your own online store.
Benefits of Shopify
Developing and opening a Shopify store is a next-step for online sellers as they aim to grow from a money-making hobby into a long-term business. Since it’s your store, you control pretty much everything.
As far as design goes, you’ll start with a theme. Shopify offers a handful of free themes, and you can buy premium ones that cost anywhere from $140 to $350. Despite being a more expensive option as far as themes go, I highly recommend having a look at themes from Out of the Sandbox. They’re well built, light-weight, packed with customization features, and in our experience Out of the Sandbox has great support.
In terms of what you’re able to do with your store design-wise though, it’s pretty much unlimited. Some customizations that you may want to make will be available right within the theme (the type and number of options available are theme dependant), and some you may need to hire Developers for. Regardless, you’re able to completely own the look and feel of your store.
Every other piece of the customer experience is yours to control as well.
If you want to offer different product pricing and currencies based on your customers’ location, you can do that.
Do you want shipping settings that are broken down at the province or state level? You can do that. If you want even more specific shipping settings, we recommend an app called Bespoke Shipping, which enables you to get extremely granular.
When you make a sale, you have full control over the notification emails the customer receives. You can use that as an opportunity to wow them, upsell them, or test out ways to turn them into return customers. And if they abandon their cart before completing a purchase, you can automate email sequences that attempt to get them to finish their transaction.
You can easily set up promotions and discounts, and just as easily turn them off. You can easily manage your inventory, your analytics, your reporting, and more. Again, you control pretty much everything.
Shopify App Store
If there are specific functionalities you want that don’t exist with Shopify out of the box, there’s a good chance that one of the 2400 or so apps available in Shopify’s app store (which will be getting a long-overdue update in the near future) can help you out. A good example is Bold’s Recurring Orders and Subscription Box app, which makes it extremely easy for you to set up a product subscription service through your store.
Complexities of Shopify
While owning your own store on Shopify, versus selling on a marketplace like Etsy, has many benefits, it’s not without its drawbacks.
The biggest thing for store owners to realize and plan for, is that just because you build it, doesn’t mean they’ll come. While marketplaces advertise their platform and generate traffic for you, you’ll have to work to bring traffic to your Shopify store.
That being said, given the sheer number of sellers on a marketplace like Etsy, it can still be difficult to get shop visits, as it’s tough to stand out. Take Stinson Studios for example again. Their flagship product is their line of wooden bowls. When I search “wood bowl” on Etsy, I get almost 24,000 results. If they were on Etsy, they’d probably have a tough time getting their shop noticed.
The fact that you don’t have built-in traffic with a Shopify store, means you need to plan and budget (time and money) for marketing and advertising. You’ll need to put more effort into figuring out how to get your target market to actually visit your store. Once you generate traffic, you'll need to test out how to get them to purchase your products. That’s what it takes to grow a long-term sustainable business though.
Scaling with Shopify
Another benefit of Shopify is the ability for the platform to scale with your business. Whether you’re just starting out and only need basic functionality and features, or you’re operating an enterprise level business and need complex integrations and elements, Shopify can handle it and grow with your business for the long term.
While there are many small business using the platform, massive ecommerce businesses, such as Kylie Cosmetics and MVMT also run their stores on it. That highlights the ability of the software to grow and scale based on your business’ needs.
Etsy vs. Shopify: Pricing and Fees
One of the biggest questions most people are going to have when considering switching from Etsy to Shopify, is how they compare in terms of price and fees.
Etsy recently announced changes to their fee structure, and the imminent introduction of tiered monthly packages. At the moment though, Etsy charges a few different types of fees. The ones most directly affecting the majority of sellers are:
Etsy currently charges transaction fees of 3.5% on product sales (not on shipping charges, however). In their recent announcements they indicated that transaction fees will increase to 5% starting July 16th, 2018, and the 5% will also apply to shipping charges.
Payment Processing Fees
In addition to the transaction fee, you’ll also need to pay a fee for the actual processing of the payment through your selected payment gateway. Your processing fee depends on your gateway and your location, but will likely be in the range of 3-4% + $0.25 per transaction.
Currency Conversion Fees
Etsy only deals in USD, meaning if you require them to convert funds to a different currency to match the currency of your bank account, you’ll be charged a 2.5% conversion fee.
Shopify has three base plans, starting at $29/month, and increasing to $79, and $299/month. They also have Shopify Plus, which is their enterprise level platform, and starts at $2000/month.
As you increase your monthly plan, you’ll receive a few more options, such as gift cards, more advanced analytics tools, and better rates on payment processing fees and shipping fees.
The only fee you pay when selling your product on Shopify is a credit card processing fee, which is at 2.9% + $0.30 per transaction on the $29/month plan, if you use Shopify Payments (which is powered by Stripe), and is as low as 2.4% + $0.30 per transaction on the $299/plan.
If you want to use a third-party payment provider, you’re able to, but Shopify will charge you between 0.5-2.0% for using a payment gateway other than Shopify payments. Generally speaking, when you’re just starting out, it makes sense to stick with Shopify Payments, and the 2.9% + $0.30 fee.
That’s pretty much it for mandatory fees for Shopify. While you can choose to spend a lot more with Shopify, such as on a premium theme, paid apps, hiring a professional for custom design and development, etc., none of them are required to get up and running.
Of course there are costs involved with shipping your products, but that’s the case no matter the platform you’re on. Shopify actually has some pretty good discounts available when printing shipping labels with USPS and Canada Post as well, which could end up saving you some money on your shipping costs.
All of the fees on Etsy add up, and you can easily end up spending more on a monthly basis than you would with a Shopify store. That will be even more apparent once the new increased fees are implemented in July.
As far as mandatory business operating costs go, Shopify's base of $29/month plus pretty standard credit card processing fees are more than reasonable.
How to Migrate from Etsy to Shopify
If you’re convinced that moving from Etsy to Shopify is the right fit for you and your business, here’s how you can get started.
First, reach out to let us know. While Shopify provides 14 day free trials, since we’re Shopify Experts we’re able to set up what are called Development Stores, which essentially give you an unlimited free trial.
Once you have a Development Store, you can go through the process of selecting and customizing a theme, configuring all of your settings, and importing your products from Etsy into Shopify.
An app called EasyImport - Etsy Importer will help you import your products from Etsy into Shopify. You’ll need to download a CSV of your Etsy products for the app. You can do that easily by navigating from your Etsy dashboard to Shop Settings > Options > Download Data > Download CSV.
Then you can import your products. I’d recommend having a look at your product listings in Shopify after importing, to make sure things like product descriptions and pricing transferred over the way you intended.
All-in-all, while Etsy can be a great place to get started with ecommerce, Shopify is the platform to be on for a long-term, sustainable business that you control. If you’d like to make the switch from Etsy to Shopify, or just have questions about how Shopify might be a good fit for you and your business, then reach out!