Shopify and Etsy will be the most prominent brands you’ll come across when you build an online store. A common question I receive is: Shopify or Etsy. How do I decide what to start?
The difference at the core is quite simple.
Etsy is an online marketplace for handmade goods and vintage/artisanal products. (here’s my guide on setting up Etsy). You can sell products on Etsy by opening an Etsy shop.
Shopify is a hosted eCommerce platform . Shopify stores allow you to create and manage an online store from your domain on the open Web. They also take care of customer support.
Etsy, in other words, is a marketplace that allows you to have an account and Etsy listings. Shopify is software which allows you to set up an eCommerce store.
|Key Strength||Tools for building a retail brand||Marketplace customers|
|Complaint||Attracting customers||Limits to growth|
|Best for||DIYers who have a marketing plan||DIYers who want to sell today|
|Current Promotion||Shopify for 14 days free||None|
If there were physical equivalents in the world, an Etsy shop would be a stand at a farmer’s market (ie., the Etsy marketplace).
Shopify is a shopping center owner that allows you to build your store at your location while taking care of the utilities.
However, this doesn’t address the real question: “What’s the best way to use it?”. Let’s now look at the main differences and considerations that will help you decide whether Etsy or Shopify (or both).
These differences will be highlighted Shopify vs Etsy – but they can also apply to any alternative Shopify, WooCommerce or BigCommerce, or other.
Keep in mind that these are all differences/considerations – they are not pros & cons. Every tradeoff has its benefits and disadvantages depending on your priorities, resources, goals, and priorities.
Shopify vs Etsy: Key Differences
Domain & Setup
The URL (aka domain name), remains the foundation, despite the many changes that have occurred over the past 25 years. No matter where you are located – your products have a URL.
If you are on Shopify, you get a temporary URL at signup formatted as – yoursite.myshopify.com
It’s temporary, however. Shopify allows you to create your custom domain with URL structure. This is from where you purchased it. You can not only have yourstore.com but you also determine whether you have yourstore.com/shoes/wonder-shoe or yourstore.com/footwear/wonder-shoe.
Shopify requires you to set up your store. You can change everything, even though they come with default settings.
With Etsy’s main service, you get an etsy.com/shop/YourStore domain. Your domain and URL structure are not yours. It is an Etsy Shop.
Customers see the difference between “this Larry’s Etsy shop” and “this Larry’s website.”
Etsy offers Patterns, a premium service that allows you to connect to a custom domain. There are still limitations to URL structure and configuration – which leads directly into the next big thing.
Branding and Design
Shopify allows you to create your own design. Shopify offers a wide range of premium and free themes that you can choose from and then install in a few clicks. You can create your own design. Shopify themes generate HTML/CSS, so you can create any design you want.
Shopify is not a site that can be called “Shopify”, since Shopify lets you implement any design instead of a standardized one.
Etsy allows you to create a global Etsy shop design. Although you can customize your colors and order products to your liking, Etsy does not allow for customization. You have the option to create your branding, including the logo and layout. However, Etsy has strict guidelines. The Patterns product is also affected by this. You can customize within limits.
It will be clear that someone browsing Etsy finds your shop and does not go to another website.
This difference is and not. Customizing a page on Etsy has many benefits. Potential customers will already be familiar with your design so they don’t need to learn it. Etsy has the ability to analyze how people shop and make changes so you can get more sales.
You can also become “stuck”, building another brand (aka Etsy) instead of your own. The long-term benefits of independence are not available to you.
We’ll be discussing Etsy and Shopify later, but we will continue to look at the differences that you should consider when you start out.
Fees & Pricing
Shopify charges a $29/mo monthly fee. Shopify fees include hosting and support. Plans are categorized according to advanced features.
Shopify does not charge transaction fees or a listing cost. This fee is in addition to the credit card payment processing fee.
Etsy offers a free account and storefront. There is no monthly charge. There is no monthly fee. Etsy charges $0.20 for listing and a 3.5% transaction charge. Credit card fees are also charged. Add a Patterns website with a custom domain for $15/mo.
Shopify’s Pricing Page is available here.
Visit Etsy’s Sign up page here.
Etsy’s free tag is a great option for those just starting out. However, transaction fees can reduce profitability as you grow sales. Shopify may actually be less expensive than Etsy depending on how you plan and what your profit margins are.
Shopify, on the other hand, is structured as a marketplace. Etsy is structured as a product you pay for each month.
Shopify You are responsible for driving traffic to your website. It is your responsibility to create an efficient eCommerce marketing plan, and then execute it. Shopify offers a broad range of features and access to the Shopify app store, which makes execution simpler than other platforms. Shopify offers a variety of marketing tools, including a highly SEO-friendly structure and social media integrations. Shopify doesn’t actively draw people to your website from a marketplace.
Etsy allows you to advertise and bring customers to the market, as well as any visitors to your Etsy shop. Many customers actually start their search for Etsy shops by searching on Etsy. You don’t have to be a customer to get them to buy from an Etsy store – they will already know what they want.
Referring to the analogy of the physical world, an Etsy shop can be compared to a stall at farmer’s markets. While some customers may visit your stall, others might not. Most customers visit the farmer’s markets because they know the place well and trust it. They also browse your stall.
You will need to market your store and get people to visit your store. Although the landlord might have managed to take care of parking, lighting, security and signage, they are not spending any money on marketing your store.
Rules & Limitations
Shopify allows you to sell almost anything you like, provided you adhere to local laws and Shopify terms of service (i.e. no illegal substances, contents, or objects). You can list your own products and sell them. You can set up your own store or list other products depending on your business goals.
You are subject to Etsy’s marketplace rules. These currently restrict products to handmade goods, as well as vintage and artisanal items. You won’t be able to cross-sell and up-sell manufactured products.
You are also limited in how you list your products and present them, just like design limitations. Etsy has a process for listing products. You cannot change or opt out.
Inventory & Payment Processing
Shopify gives you a complete inventory management system that can sync with customers and orders. Shopify has its own payment processor, and point-of-sale service. This allows you to sync offline sales with inventory on Shopify. It can be used for both offline and online ecommerce.
Etsy is, once again, a marketplace and not a platform. While you can list products to sell and pay per listing, inventory records must be maintained elsewhere. Third-party apps can tie Etsy inventory sales but management will not be done through Etsy.
For day-to-day management, you can use both the Shopify and Etsy apps to manage your shop. Shopify offers an offline selling option with the Shopify POS.
Shopify vs Etsy: Using Together
Etsy is a great place to start if you only have a few products and are looking to get your online store started quickly. But as you can tell from the differences/considerations, most shops will have to plan to change as they grow.
But there’s a catch – it is not an either/or decision between Shopify or Etsy. This is a common growth path that stores can follow:
- You can list a few products on Etsy
- Shopify allows you to create online stores as sales rise.
- Shopify allows you to maintain inventory and increase repeat customers.
- Keep Etsy a marketing channel that only lists top-selling products
- To cross-list and sync inventory, you can use a third party Shopify app
It’s a sales channel that sells on Etsy’s marketplace, not a channel that generates sales to your site. If you think about it that way, Etsy is a sales channel. It is in the same class as Amazon , eBay and other sites. Etsy can be used to find Etsy customers, and your Shopify website as a digital marketing hub to generate other sales.
Shopify vs Etsy are not two choices. It’s more a way to consider your priorities depending on the stage of your business.
is the best way to start if you only have a handful of products and need to sell a few to prove your point.
Shopify plans are available for those who want to launch an ecommerce site they own and manage. Get a free trial.
It’s not about which one you prefer, it’s all about what your priorities are as a business owner.
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