Shopify vs Etsy: a comparison for merchants

Shopify vs Etsy
Choosing the right platform to launch your e-commerce shop is just as important as any other factor in your business plan. Are you debating between Shopify vs Etsy? Read on...

Wondering which platform to launch your shop on? Here's our comparison of Shopify vs Etsy.

Etsy

We have already written a detailed review of Etsy as a platform, which you can read here.

Etsy is an online marketplace that has a fantastic bustling community of artists, designers and crafters selling their unique hand-crafted or vintage goods. This is all you can buy on Etsy, unlike Shopify which lets you sell just about anything. As long as it's legal, that is... 

Products sold on Etsy fall into the category of either arts, crafts, jewellery, homeware or baked goods. Sellers are also encouraged to stock 'vintage' items, which Etsy defines as at least 20 years old. They have a very strong following of buyers interested in goods like these, so it's the right place to start if that's what you make or stock. With over 1,000,000 active shops, Etsy is a platform that is always rising in popularity, with more and more online shoppers acknowledging that it is a great place to find unique items and gifts that aren't sold elsewhere.

Here are the main pros and cons of selling on Etsy:

Pros

1. Established community

Image from blog.ecoetsy.com

A very appealing benefit of selling on Etsy is that it can offer you membership in a very large, previously-established community. While any small business should be constantly marketing itself regardless, knowing that a lot of people visit Etsy could potentially help with having customers find you. Do bear in mind that traffic to Etsy does not equal traffic to your shop. If you want to get featured by Etsy, you still have to make your products exciting and your brand unique. If you can do this, Etsy can solve a major startup problem by exposing you to a large audience of the right people. Doing this yourself is hard.

2. Sell instantly

"Patience is a virtue, but time is a commodity," a wise person once said, and in the world of e-commerce this often rings true. If you want to begin selling your products as soon as possible, Etsy could be the route for you. It has a really easy and fast sign up process, and even offers a 'Sign Up Using Facebook' button. Once you have your account, you could start selling in just a few hours if you have your product photography and descriptions ready.  This is great if you've left it to the last minute to set up your business for Christmas or another peak time.

The alternative of having a bespoke website designed and made for you will take much longer and will incur a large upfront cost, though to actually sell through your own website will be much cheaper as you'll avoid the big fees charged by marketplaces like Etsy, Not On The High Street and eBay. On that topic, it's also worth noting that Not On The High Street takes a while to review your application to sell on their platform.

If you don't want a bespoke theme, getting set up on Shopify is also quick, but you'll be the one in charge of marketing your store.

3. Offer discount codes and shipping

Image from Etsy.com

One of the best ways to keep customers visiting your online shop time after time is to offer a loyalty incentive. A great thing about Etsy is that it makes it very easy for you to implement various discount codes and shared shipping costs for the same customers. It's an excellent marketing tool that you can use to potentially drive customers back to your shop and gain more repeat orders.

Shopify also allows your to create discount codes, which can be limited to a certain number of uses and usable between a designated period of time.

4. Low cost to get set up

It really does not cost you much to get set up selling on Etsy, especially when you consider the alternatives available to sellers of unique items: Not On The High Street, or a bespoke website for your products. Not On The High Street charges £199 + VAT as their joining fee (around £240), and takes a 25% commission on all sales you make, while having a website designed will cost even more. Etsy, on the other hand, lets you set up your shop for free. However, Etsy does charge $0.20 to list an item and takes 3.5% commission.

Cons

1. Expansion has damaged its support service

Screenshot from Etsy's forum

Etsy used to offer live chat to all of their sellers, but unfortunately the fast-expanding nature of the platform meant that they were forced to put a stop to this service in 2011, after not being able to cope with the demands of their sellers. A lot of people on Etsy's forum have expressed a lot of anger and upset over this, claiming that the live chat feature was their lifeline when they first started their online shop and now their problems aren't dealt with as efficiently as they once were. You can see this in the screenshot above. It seems that Etsy was not prepared for its increase in users and has thus had to dilute its existing resources to make them stretch.

2. Oversaturated

An issue that is universally deplored by all those that sell on Etsy is that there is far too much competition. This is worrying enough in itself, before you learn that it's estimated that there are more sellers on Etsy than there are buyers. The number of sellers is also rising all the time. With so many of your competitors selling on the same platform as you, it may be hard for you to stand out and make many sales on Etsy. On the other hand, this could be a good test of your brand and product.

You can overcome this by putting more time and money into marketing, and generally sharpening and honing the elements of your marketing mix, which is discussed in more detail in our Etsy review.

3. They take some of your profit

Image from Etsy.com

Etsy's fees are $0.20 to list each item, which is only listed for four months. They also charge 3.5% of the product's price price when it sells. When you consider the previous point, that it's already hard to find customers because of the saturated nature of the platform, it's frustrating that when you do start making sales Etsy also profits off of your success.

This obviously has to be mentioned in the 'cons' section of this article, but at the same time, you're going to find costs anywhere you decide to sell your products online, so this isn't necessarily a flaw that is unique to Etsy, and shouldn't be viewed as a reason to not use them. They have to make their profit somehow, and they are allowing you to access their wide customer portfolio. Etsy is a much lower cost option that having your own bespoke website built.

4. Not that customisable

Selling on Etsy is not nearly as personalised as having your own beskpoke e-commerce shop. The platform does offer some customisation tools, but they aren't extensive. You can add a banner to your shop and write up shop policies, but your URL will end in '.etsy.com', which can make your business seem less professional. Etsy does not offer HTML customisation, so the customisation of your shopfront is always going to be limited.

Shopify, on the other hand, gives you access to HTML, CSS and Liquid, so your website can always be customised to match your brand. If you want your shop front to be completely bespoke to your business's brand, you will need a website designed for you. Etsy is a marketplace aimed at many different kinds of sellers, and doesn't offer the level of customisation that you may be looking for.

Shopify

We've already written a detailed review of Shopify as a platform, which you can read here.

If you're looking to build your own online retail business, there are few platforms that have more ticks next to them than Shopify. After building websites for several years, Shopify has struck us as by far one of the best platforms we've ever encountered, that's why we use it for all our projects.

Founded in 2004, Shopify was initially based on software its founders had created for the online snowboard store they had wanted to create. They did create the store, Snowdevil, but by 2008 Shopify was generating profit so the founders closed down Snowdevil to focus more of their attention on growing Shopify.

Over 120,000 stores currently use the platform, and that number is growing all the time. Now that they have a solid service for e-commerce entrepreneurs, Shopify has started tackling offline retail with their point-of-sale (POS) system, which includes both an iPad and iPhone app, as well as compatible hardware such as a barcode scanner, receipt printer and cash drawer.

Shopify is a hosted solution, which means that as part of your fee Shopify will host your shop on their servers and you don't have access to the back-end code. For most retailers that won't be a problem as you can still massively customise your shop via configuration, 'apps' or by customising your theme.

Here are the main pros and cons of opening a store using Shopify:

Pros

1. Your own beautiful custom website

Shopify has a selection of 'themes' on its Theme Store, which can be easily installed onto your website to give it a beautiful look with high functionality. By just choosing a theme and changing the customisation options provided you can get a more unique look compared with an Etsy store. Any Etsy shopfront always looks like an Etsy shopfront, whereas Shopify gives you enough control to make your store completely unique. In this sense, Shopify is a white-label system.

If you wish to customise these themes beyond the simple changing of a logo and colour palette, then you can make more comprehensive changes to the templates if you have a good understanding of CSS, HTML and Liquid. Liquid is Shopify's proprietary language for creating themes for their platform.  This allows you to completely manipulate the theme, creating a custom look and feel that is unique to your brand.

Don't worry if this all sounds like jargon – if you don't have a grasp of web design you can employ a Shopify Expert to customise themes for you. Even if you have some understanding of code, sometimes it's still worth hiring someone else to do it so you can better focus your time on starting your business. 

2. Superior customer service

Shopify offers 24/7 support on phone, email and live chat to all of its users. The best part? It's included in the monthly fee.

Shopify's 24/7 support is a massive benefit to any e-tailer, meaning you can get round the clock support wherever your are in the world. Ultimately, you will be trying to sell 24/7, so it is comforting to know that any problems that arise when you are selling are dealt with promptly. Having email, live chat and phone options available around the clock will give Shopify the upper hand over Etsy if support is important to you.

3. The Shopify App Store

This is one of the most useful elements of Shopify, and a feature that Etsy is nowhere near to competing with. Shopify has an App store full of Shopify-made and third party apps that you can get, either for free, a one-off charge or a monthly fee, to add functionality to your store. We have written a list of the best Shopify apps which you can read here. From that list, here are some of the most popular apps we've encountered while working with Shopify:

  • Beetailer - Easily sell your products on your Facebook page with a Pinterest like User Interface.
  • Loyalty Lion - Delight customers by rewarding purchases, referrals, visits and signups.
  • Wishlist + Reminder - Add a customer wishlist to your website.
  • Mailchimp - Send out targeted email campaigns to customers signed up to your mailing list
  • KISSmetrics - Analyse your shop's analytics to make better business decisions
  • Yotpo reviews - Add customer reviews to your product pages. Yotpo automatically follows up with customers to ask for a review and you can customise the email.

You can view the Shopify app store here to see customer reviews and ratings for each app.

4. Range of payment gateways

Etsy only offers two payment gateway options: PayPal and its own gateway called Direct Checkout. Shopify offers many more to its merchants, the list for just the UK includes around 20 of the most popular payment gateways. These include: Authorize.net, Braintree, PayPal, Paymill, SagePay, RealEx, Stripe and RBS Worldpay. Worldpay and SagePay also offer an 'offsite' checkout that is not hosted on Shopify, therefore they can also offer 3D secure.

5. Seamless compatibility with POS system

Using Shopify POS, you can seamlessly integrate everything between your online and offline shops. If, for example, your last red coat is bought in your shop, it will also show as out of stock on your online shop. This saves you a lot of time, stress, and customer complaints.

Shopify has released a variety of hardware for brick-and-mortars, including a card reader, barcode scanner, receipt printer and cash drawer. In terms of software, Shopify has an official iPad app to accept payments from Visa, Mastercard, and American Express, as well as the ability to update your inventory in real time. In this, the iPad acts as your store's central computer system.

There is a bit of a catch, though. The ability to take card payments via the app is only available is not yet available in the UK. But worry not, there is a way around this. You can still use the other hardware components, you'll just need a third party chip-and-pin card machine to take card payments. Then you can simply mark the order as paid as part of the checkout flow within the app. There's a lot more information about using Shopify PoS in the UK here.

Do note that this is something that Shopify is aware of the UK demand for their POS system and is planning to add functionality for UK stores in the future.

Cons

1. Monthly fees

Basic:

  • $29 (£17.49)/month.
  • Easily set up a store.
  • Includes discount codes.
  • 2% transaction fee.

Professional

Unlimited

  • $179 (£107.98)/month.
  • Advanced reports.
  • Real-time carrier shipping.
  • 0.5% transaction fee.

Plus

Compare with these with the rates for Etsy mentioned above. Work out an estimate of how many orders you expect over the year and work out what the charges will be on each platform. This will help with your decision.

2. Poor multi-currency support

While you can display product prices in a variety of currencies using exchange rates provided by xe.com, some businesses might want to specify rates themselves, which Shopify does not allow you to do. In the ever-growing realm of internationalisation in e-commerce, this could be a problem to some e-tailers.

Additionally, despite the visitor browsing in their own currency, the final payment must be taken in the store's default/base currency. It's a good idea to warn customers of this at the cart stage, so that customers aren't suprised when the payment is taken in another currency.

There is a way to get around this, but it can be stressful. Some retailers set up multiple Shopify stores, each with a different currency. If you opted to do this, you could then use Brightpearl to keep your inventory in sync between stores. Some retailers may find this approach frustrating and would prefer shopping cart software that can integrate with payment gateways that support seperate accounts per currency. On the other hand, some retailers will prefer the control of having different Shopify stores for different regions.

3. Dependence on third party apps

As previously mentioned, to add more functionality to Shopify you often need to use apps. The vast majority of these are built and supported by third parties and so have inconsistent levels of quality and cost. Once you start installing a few apps your implementation can be a bit messy. You may also find that you don't have access to adjust the look and feel of some apps as you would like to.

4. Create your own traffic

Unlike Etsy, having your own unique site will mean that you will not have an influx of instant traffic to your shop. As a result, you will have to put a lot more time and money into marketing your business and optimising your site for search engines. You may also need to advertise your business using a system like Google AdWords to maximise your exposure to potential customers that you are targeting.

To help with this we have written a guide on how to promote your new online store.

Conclusion

There are no doubts here: Shopify offers its users a much more bespoke shop, while Etsy can promise you the allure of instant traffic with much less effort on your part. We think setting up an Etsy store is a great way of trialling a new business idea and building a following, then once you feel confident in your product range you can have a bespoke store built that conveys your brand better whilst costing you less per transaction.

About the author

Ediz is one of our marketing experts, helping e-commerce businesses improve their online presence. He has worked as a copywriter for a wide range of small businesses throughout the UK and has an excellent understanding of how to market to different audiences.

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