Etsy vs. Shopify and How To Pick The Right Option For Your Business
Making a decision about selling on Shopify vs. Etsy or vice versa for your business is a difficult one! Each platform has pros and cons that can make it the right fit (or not!) for your business. There are differences in fees, set-up, search exposure, customization options, and more. Evaluating the two alternatives can be overwhelming and because of that may lead you to pick the wrong option for your goals and type(s) of product sales.
I started my business as a blogger and sold exclusively through affiliate partnerships with other companies and products. I did not have any products of my own. However, as I grew my blogging business and sought to expand I began to sell printables for digital download. A few years later I also began to sell physical products that I design, make, and ship myself. My business has evolved quite a bit and throughout the process I’ve sold through both Etsy and Shopify at different stages.
I’ve learned things about each platform as I’ve used them and each one makes sense for my business in different ways at different stages.
Deciding to open an Etsy shop vs. Shopify isn’t necessarily a make or break decision for your business, but it can be an important factor in how quickly your business grows and the amount of administration required of you – especially if you are just starting your business.
In this post I will compare for you side by side what I consider to be five of the most important different aspects of selling on Etsy vs. Shopify. We will discuss Shopify vs. Etsy fees, domain name structure, search exposure, visual customization options, and tax compliance features to help you decide which options makes the most sense for your business, goals, and finances.
Shopify vs. Etsy
Which is better, Etsy or Shopify? The answer can be different for each business and its specific goals, budget, and product(s). Below is a detailed breakdown of how the platforms compare in five key areas: Fees, domain name structure, search exposure, visual customization options, and tax compliance features.
Shopify: To use Shopify customers pay a monthly fee to have either a Basic, Shopify, or Advanced plan. You can find the monthly fees for each plan and read the details of how they compare here. Shopify also offers a Shopify Lite plan that is significantly cheaper per month and includes access to most of the back-end features of Shopify. However, through the Shopify Lite plan you cannot set-up a shop front. You can only add “buy buttons” to a website that you already run. You can read more about the details of the Shopify Lite plan here.
With all of the Shopify plans, there are no transaction fees as long as you are processing payments through Shopify Payments. If you choose a different payment processing option there are different transaction fees depending which Shopify plan that you have. You can read more details regarding Shopify transaction fees here.
Etsy: Etsy’s fee structure is a bit complex. They do not charge a monthly fee to set-up and run your shop. However, they charge a listing fee for each product that you list in your shop as well as a transaction fee and processing fee for each product that you sell. There are also some additional fees if you opt to use some of the promotional features that Etsy makes available. You can read more about Etsy’s specific fees and their rates here and find the details regarding their payment processing fees here.
In terms of Shopify fees vs. Etsy fees, the cost of using one platform or the other really depends a lot on the volume of your business. If you sell or anticipate to sell a relatively high volume of product each month, then Shopify’s structure may turn out to cost you far less since Etsy’s fees are per listing and transaction. However, if you are just getting started or only sell a small volume of products each month, it can be a hefty expense to pay Shopify’s monthly fee, whereas with Etsy you only pay for the products you are actually selling with the exception of a small listing fee for each product that you put into your shop.
Domain Name Structure:
Shopify: With a Shopify plan every account receives a free “myshopify.com” domain name with your monthly payment. You can also choose to buy a different domain name through Shopify or use one that you already own rights to.
Etsy: You cannot match an existing domain name, use a domain name that you already own, or purchase one through Etsy. Etsy shop URLs are structured as etsy.com/shop/”your shop name”
The difference in structure of your shop’s URL through Shopify vs. Etsy really comes down to how you want your shop and business to be branded. With both you can set the name of your shop, but with Shopify you can more easily coordinate the URL of the shop with an existing business website or start one with a business-specific URL. All Etsy shop URLs start with “etsy.com”
Shopify: With a Shopify store you are responsible to direct all traffic to your store via your website or other promotional efforts.
Etsy: With an Etsy shop your products can rank within Etsy’s search results and Etsy also does some advertising through search engines etc. where your products can show up as featured.
Shopify puts the promotion of your shop into your own hands. However, Etsy gives your products a bit of exposure boost by featuring them in their own search results and sometimes even through some of the advertising. If you are starting a completely new business or don’t have many channels established to promote your product(s) than listing through Etsy where you can appear in their search database can be really helpful.
Shopify: With a Shopify storefront you can change and customize nearly every color, graphic, and layout of it to completely match or create your brand image.
Etsy: With an Etsy shop you can customize your logo, header graphic, product images, and a few layout options but your shop appearance is not fully customizable.
If branding is super important to you, then you might get frustrated with an Etsy shop. While you can brand an Etsy shop with your logo, unique product images, and header graphic, you cannot set-up the shop too much beyond those options. With a Shopify shop you can customize the appearance of your shop to the point where customers might not even know that they’ve left your other website (if you have one) – even if you’re using a “myshopify.com” domain name!
Sales Tax Compliance:
(Within the United States)
Shopify: You can set Shopify to collect certain sales tax rates from customers when they purchase your item(s). However, you are responsible for reporting and remitting the taxes to the appropriate state(s).
Etsy: Etsy will collect the appropriate sales taxes from your customers and report and remit them to the appropriate authorities. You can read the details about how Etsy handles sales tax compliance here.
If you are not registered to collect sales tax and don’t want to go through the hassle of registering and reporting sales taxes yourself, then opening an Etsy shop can make a lot more sense than opening a Shopify storefront. Etsy essentially does the sales tax work for you for online sales. (Etsy does not remit sales tax for you if you are selling in person!) If you sell through Shopify, you are responsible for remitting your sales tax to the proper state authorities yourself.
So which is better Shopify or Etsy?
The answer depends on your business. If you are just getting started selling some handmade items where your volume of sales is low and seamless branding is not a high priority, then Etsy might make the most sense for you to minimize your expenses and administrative needs. However, if you sell or want to sell a higher volume of products that are firmly branded to other channels of your business, then a Shopify account might make the most sense for you.
Below are some key pros and cons to Shopify vs. Etsy based on the variables discussed above:
- No monthly fees (great if you sell a low volume of products)
- Sales tax reporting and remittance done for you
- Ability to be found in Etsy search results
- Relatively high percentage of your profit on each sale applied to fees (which can become costly if you sell a high volume of products)
- Little ability to brand your URL or storefront
- One fixed monthly fee that doesn’t go up based on the volume of products sold
- Ability to very highly customize your storefront’s appearance and your URL to match or create unique branding
- Sales tax reporting and remittance not done for you
- No default assistance in marketing or promoting your products
- Monthly fees can be costly if you are only selling a small amount of product
When I started selling printables as an extension of my business I opened up an Etsy shop. I later decided to move my shop to Shopify to be able to better brand the URL and appearance to other avenues of my business. However, since expanding into the sales of some physical products I’ve actually moved my shop back to Etsy.
Initially the biggest reason was to take advantage of Etsy filing sales tax requirements for me. It was also in part due to the fact that I was not selling a high enough volume of relatively cheap printable products to be worth what I was paying monthly for a Shopify storefront.
As I’ve ventured into physical products with my shop now for some time through Etsy, I am increasingly looking forward to the point where my sales volume makes sense to move back to Shopify. While I am benefitting from showing up in Etsy search results with my somewhat new products, I get frustrated by the hefty per sale fees and the lack of ability to brand my shop.
Right now Etsy makes sense for my business based on the above pros and cons, but at a certain sales threshold Shopify may make more sense for my business needs.
The choice is different for every business and sometimes even for different stages within one business, but I hope that the above details on selling through Etsy or Shopify are helpful as you make the decision that’s right for you!
If you’re just getting started with your business make sure you also check out my free Google Sheets Etsy Fees, Profit, & Price Calculator to help you set your product prices and my small business planner for entrepreneurs!