Shopify vs Etsy: Choosing The Best Platform For Your Online Store

December 14, 2021

Sean Flannigan

61b7c74dc53aea42f676b67a Shopify vs Etsy Choosing the Best Platform For Your Online Store

When starting up your ecommerce business, one of the most important decisions you make is what platform you use to sell your one-of-a-kind goods. 

After all, you’ll spend a lot of time on it and, hopefully, so will your customers.

There are so many different ecommerce platforms these days, from the niche marketplaces being popularized by Gen Z to the tried and true behemoths that have been evolving for years.

Two such behemoths are Etsy and Shopify.

While super different from each other in many respects, the merchants that call those platforms their home are very similar, to a degree.

You may be asking yourself, “Is it better to sell on Etsy or Shopify?” And, the answer is, it depends. And, it could also be, why not both? 

In this post, we’ll cover:

Without further ado, let’s learn about these two platforms and how they differ.

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What’s the difference between Etsy and Shopify?

The differences between Shopify and Etsy become clear upon shopping a store from each platform. 

One of the biggest differences is the format of these platforms—one a marketplace and one a traditional platform. 

Etsy is a bonafide marketplace with a centralized search function that serves up listings from up to four million sellers. Shoppers land on Etsy and can search for dog costumes, for instance, and they’ll find results from tons of sellers.

Shopify doesn’t act as a unified marketplace but rather a platform that sellers use to create their own separate stores. You can’t go to Shopify to search for a sweater for your cat, for instance.

There are tons of other differences—fee structure, monthly costs, store design, scalability, and more—which we’ll cover below. 

What is Shopify?

Shopify is an ecommerce platform that handles most elements of running your store, from hosting and customization to marketing and shipping. 

The platform is extremely versatile, with a vast selection of native and third-party apps and themes that will help you run your store more efficiently and set yourself apart.

It’s pretty simple to set up and start selling on Shopify, and you can sell just about anything you want(with some obvious legal exceptions). 

shopify homepage build a new store
Image: Shopify

Aside from design similarities between stores, it isn’t immediately obvious that any particular store is using Shopify. Each retailer maintains their own store and is responsible for growing traffic.

Shopify is great for businesses of all sizes but works especially well for rapidly growing businesses.

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What is Etsy?

Etsy is an ecommerce marketplace where shoppers can search for products and find results from tons of sellers.

Every store lives on the Etsy website and their search algorithm determines what listings will rank highest. With over four million active shopsand over 80 million buyers, they are more popular than ever and sellers enjoy a built-in customer base from day one.

Etsy is well known for being the marketplace of handmade and crafty products, with rules in place that limit what can be considered ‘handmade.’

etsy homepage marketplace search
Image: Etsy

An excellent choice for smaller businesses with limited product inventories, Etsy makes it easy to start selling your handcrafted wares.

Pros and cons of Shopify and Etsy

Both Etsy and Shopify have big wins in their favor, which we’ll cover in more detail below. But each also has its slight disadvantages which will affect different sellers in different ways.

Let’s take a look at high-level pros and cons for each:

pros and cons of etsy and shopify

Shopify vs Etsy: How do they measure up?

Each seller has different criteria for deciding what platform they’ll use and it depends on many individual factors—what you sell, how much you sell, the size of your team, your customization requirements, your growth plans, etc.

Here, we’ll compare these two incredible ecommerce platforms on some of the biggest considerations for sellers.

Pricing 

The first consideration many sellers will have when deciding what platform to use is what it’ll cost them to start selling.

The way that Shopify and Etsy approach pricing couldn’t be more different.

Shopify has a monthly pricing scheme split into five tiers. Plans start at $29/month and go all the way up to $2,000+/month.

For simpler stores with smaller inventories, their Basic Shopify plan will work fine. For larger and more complex stores, there are more feature-rich plans (Shopify, Advanced Shopify, and Shopify Plus).

Their cheapest plan, Shopify Lite, doesn’t include an online store, so we needn’t cover it here. 

shopify pricing plans small biz to enterprise
Image: Shopify

Etsy, on the other hand, doesn’t have a monthly pricing scheme. So, it’s free to start and maintain an Etsy shop before you sell anything.

Instead, they rely on listing fees, transaction fees, payment processing fees, and offsite ad costs. We’ll cover these more in the fees section.

They do have one subscription plan called Etsy Plus, which gives sellers credits for listings and ads, as well as a custom store URL. This plan costs just $10/month.

In this matchup, Etsy has the clear edge. But, in this instance, the comparison is very apples and oranges. 

Fees

The cost to do business doesn’t end with the upfront monthly costs. Fees can play a big part in your decision to sell with one service over another.

The difference between Etsy and Shopify on the topic of fees is stark. 

Shopify builds most of its costs into its monthly pricing (covered above). They have no listing fees, enabling stores to add unlimited products without worrying about an extra cost.

Depending on your Shopify pricing plan, you’ll see different transaction fees if you aren’t using Shopify Payments. Those transaction fees are as follows:

  • Basic Shopify: 2%
  • Shopify: 1%
  • Advanced Shopify:0.5%
shopify payments credit card rates
Image: Shopify

If you use Shopify Payments, there are no transaction fees. You will just need to pay card processing fees based on your pricing plan:

  • Basic Shopify: 2.9% + $0.30 per transaction
  • Shopify: 2.6% + $0.30 per transaction
  • Advanced Shopify:2.4% + $0.30 per transaction

Outside of those typical fees, Shopify is a relatively fee-free platform. Of course, you must take into account your monthly subscription when considering the costs of Shopify.

The costs you’ll incur with Etsy happen entirely via fees. 

etsy costs fees on transactions listings ads
Image: Etsy

Here are the fees you’ll encounter when using Etsy:

  • A listing fee of $0.20 per item. This applies to all products listed on Etsy.com and the fee will automatically renew when items are sold or after the four-month listing period. The fee is levied whether or not the item sells.
  • A transaction fee of 5% of the total item cost. This applies to the displayed price plus shipping/wrapping charges. 
  • Payment processing fee of 3% plus $0.25 per transaction (in the US). This is applied to the gross order amount, including taxes and shipping costs. Find fees per country here
  • A 12-15% fee for orders attributed to offsite ads. Some sellers can opt out but all sellers are automatically opted in to start. Sellers that make $10k or more in a year cannot opt out.
  • For Etsy Plus sellers, the subscription is $10/month. This includes credits that can cover some of the above fees.
  • For Pattern users, you’d pay an additional $15/month. Pattern-only listings don’t incur a listing fee and don’t expire.

The implications of Etsy’s fee structure will vary based on a number of factors unique to your store. 

It will affect how you price your products, knowing that for each single item transaction, you’ll be charged $0.45 plus 8% of the sale (or even more if the sale is attributable to offsite ads). For low-priced items, these costs can add up quick and eat into your margin.

Where fees are concerned, Shopify comes out miles ahead. Obviously, the costs of these two platforms will depend on the size of your store.

Payments

It really matters what methods you have available for your customers. You need it to be easy for them to fork over that cash.

With Shopify, stores can either opt to use Shopify Payments or a third-party payment provider.

shopify payment methods
Image: Shopify

If you want to go your own way, there are over 100 payment providers you can go with. The caveat is that you’ll be charged transaction fees (see Fees section) plus processing fees from your provider.

To avoid transaction fees, Shopify Payments is already included in your account and just needs to be enabled. Shopify Payments accepts all major credit cards and digital payment methods.

Etsy gives sellers the ability to accept payments from all major credit cards, as well as digital services like PayPal, Google Pay, Apple Pay, and Klarna.

etsy payments methods to use
Image: Etsy

The biggest difference here is that the cost per transaction can be rather high with Etsy, as you saw in the last section.

With both Etsy and Shopify, shoppers can use all their usual payment methods to pay for your stuff. From a customer perspective, both are great.

The edge goes to Shopify here because their transaction fees are lower (or nonexistent). 

Shipping

Transporting your goods to your loyal customers quickly and efficiently is so important to building great customer relationships.

Shipping, like many features, is built right into Shopify. With Shopify Shipping, you can send from USPS, UPS, and DHL with shipping discounts of up to 88%. For instance, you could ship a small package (3 lbs) from Chicago to NYC for less than $10. 

In your store, you can choose to charge flat rates based on pricing or product weights, or you can use calculated shipping rates as provided by carriers or connected apps. Of course, you can also go with free shipping.

On Etsy, you can ship from USPS, FedEx, and Canada Post with shipping discounts of up to 30%. For the same package going from Chicago to NYC, you’d pay a little over $10 with Etsy Shipping.

As your packages get bigger, so does the difference in shipping costs between the two platforms. A 10 lbs package of the same dimensions would cost twice as much on Etsy as on Shopify.

shopify shipping calculator
Image: Shopify
etsy shipping calculator
Image: Etsy

While your package will land safely at its destination in both situations, you and your customers could save more on shipping costs with Shopify.

Ease of use

There is so much talk about user experience for shoppers, but having a great experience is also super important for merchants. 

Both Etsy and Shopify have continually improved their platforms to make them as easy to use as possible for sellers. 

Shopify is, at heart, a store builder. To that end, they’ve created a robust onboarding process for new sellers, guiding you through the setup of everything from payments and shipping to inventory and marketing.

shopify steps to start your store
Image: Shopify

It is chock full of features, so it’s hard to call the process simple. But, given the breadth of their offering, getting everything set up for selling is extremely easy.

Etsy, on the other hand, is a simpler platform. It is super easy to get started because so much less is required for your store to be ready for showtime.

You just add your products, your account info, your shipping details, and your brand logo, then you can start selling. You don’t even need to worry about building an audience since it’s already waiting for you.

etsy getting started with building store
Image: Etsy

For getting started, Etsy is obviously the easier choice. That said, your Etsy store is generally a simpler affair with fewer features and customization options.

Design and customization

Your brand identity is so dependent on creating unique experiences for your customers. The flexibility to customize your store to fit your brand aesthetic is key in an ecommerce platform.

How else can you immediately stand out from your competitors?

Shopify excels on the design front, with so many pre-built themes available to fit your brand style. You can do a fair amount of theme customization within Shopify to reflect your brand aesthetic.

shopify theme editor customize sections
Shopify’s theme editor on the Dawn theme

With the addition of powerful page building apps (like Shogun Page Builder), you can customize Shopify store pages to the smallest detail and create powerful landing pages that help you convert shoppers to customers more reliably. 

Other apps help you run your store more efficiently, automating conversion optimization and marketing functions that allow you to focus on doing business.

Etsy allows for little customization and all stores have an identical layout. The extent of your ability to show your brand identity is by uploading your brand logo and cover photo. 

The good thing is that Etsy shoppers expect little in the way of brand differentiation. They are simply looking for the products.

The downside is that brands on Etsy are easily forgotten in the sea of similar shops.

In an effort to give merchants a more customizable storefront, Etsy has launched Pattern. 

etsy pattern store customization
Pattern by Etsy is their answer to building your own store

This add-on service allows sellers to build a customized storefront separate from the main marketplace with its own domain. 

Even still, Pattern’s design capabilities pale in comparison to Shopify. 

Shopify easily beats out Etsy in this category. 

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Access to customers

The one part of an ecommerce business that you can’t do without is customers. Getting more customers and keeping them is a huge topic on our blog, rightfully so.

On Shopify, your store is your store and your traffic is your responsibility. Once you’ve set up your store, you have to figure out how to get people to visit it.

Shopify will give you the tools for marketing your store but it won’t give you the traffic.

The bright side is that once you do get that traffic coming in (through your own hard work), you own your customer base and can remarket to them as you like.

Etsy, as a marketplace, comes with a built-in audience. You set up your store, optimize your listings for Etsy’s search engine, and wait for traffic to pour in.

etsy mens sweaters search results
Image: Etsy

While getting immediate traffic to your store is alluring, note that it isn’t your traffic but Etsy’s traffic. You’ll have access to that traffic in the same way that all your closest competitors do. You’ll be fighting it out in the search results.

For immediate customer access, Etsy surely wins. In the long run, the traffic for an Etsy store will likely remain steady whereas the traffic to a Shopify store can grow equal to the marketing efforts of the seller.

Scalability

Being able to effectively grow your business is something you can think about early on. As you start setting up your store, you want to consider whether your platform will grow with you.

If it isn’t capable of growing with your vision, it’ll take more time and energy to switch later on.

Shopify is a platform built for scaling businesses. Their pricing plans act as a ladder, giving merchants more powerful features as they step to accommodate their aspirations.

The things that make Shopify so great for scaling stores are:

  • Unlimited products. You can add a massive catalog of products without incurring any extra costs. This would be made more difficult with listing fees on each product.
  • Less direct competition. Your store is an island and the traffic you get is singularly focused on your brand. No direct competition on the platform to dilute your ability to set your own pricing.
  • Your store is your own. On Shopify, your store is an asset. You can build your own audience and market to them on your terms. Plus, once you’ve built your empire, you can sell it for cold hard cash.
  • Selling tools at the tips of your fingers. With thousands of Shopify apps out there to help make  your operations more efficient, you can focus on growing your store without missing the important things.
  • Design flexibility. Growing your brand means becoming a household name. On Shopify, you can easily create a unique store experience that reflects your brand and sticks in their minds.

There’s no doubt that Etsy is a great place for small brands to get started quickly. But, as you scale, the platform will have a hard time keeping up.

The things that stand in the way of really scaling an Etsy store are:

  • Unlimited product capability hampered by fees. While Etsy allows for unlimited products, the listing fees deter experimentation with a large inventory that may or may not sell. Also, the products that do best on Etsy are crafty and handmade, which may not fit with your brand.
  • Major competition. Since your products are found through Etsy’s search engine, they are directly competing with every other shop selling the same product. To compete, stores must keep prices low while offering free shipping, shrinking the profit margin in a race to the bottom.
  • Lack of selling tools. Etsy has a limited set of built-in tools for marketing and growing your store. You can use third-party services but they aren’t integrated into your store like they are with Shopify.
  • Etsy owns your store. Your Etsy store is on the Etsy marketplace and you are sharing their traffic, so you never own your audience or your store. After growing an Etsy shop into something great, you can’t even sell it since it really just belongs to Etsy. 
  • Design limitations. While Etsy customers don’t expect a flashy storefront on the marketplace, all stores blend together and your brand is unable to stand out. Your store looks much like your competitors and customers mainly focus on comparing products.

As far as scalability goes, Shopify is clearly built for rapidly scaling ecommerce businesses, with functionality to easily accommodate those changes.

Etsy works great for small-scale businesses but doesn’t have the toolset for growth.

Domain

Part of your brand identity is the URL you can share with the world. You want it to be easy to remember so shoppers can simply type it in and find you.

Having your own domain is powerful. No other brand lives there. It is your brand’s digital address and it is a central asset of your business.

Shopify gives you the ability to buy a new domain right from your dashboard, with a search function built in to help you find available domains and pricing. 

You can also connect an existing domain if you already have one.

shopify domain own your url rumpl.com
Image: Rumpl

With that, you own your domain and your store is automatically hosted on it. Once your store is published, shoppers can simply type in the super memorable URL to find you.

Etsy stores are all hosted on Etsy.com, tentacles of the central marketplace. So, your URL would look something like “www.etsy.com/shop/cool-store-name”, a subdomain of the main site.

etsy url on etsy.com shopevren store
Image: SHOPEVREN

Suffice to say, an Etsy store URL is a bit more difficult to remember and type out.

Beyond that, you don’t own that URL—you are renting it.

Etsy’s answer to this problem is called Pattern. In its early form now, Pattern is an add-on subscription ($15/mo) that gives you a customizable storefront, the ability to buy a domain, and product syncing from your main Etsy store.

While it is limited in design features, it can give Etsy store owners another way to sell in their own space.

In this matchup, Shopify easily takes the win. 

Customer support

When there’s an issue with your store, you want to get help ASAP so you can keep your store running smoothly for customers.

Shopify has 24/7 customer support in the form of chat, email, and phone. Merchants can get in touch with support right away to solve their issues quickly.

They also have a robust help center that covers most common issues that sellers have. The Shopify community is full of store owners looking for help and finding it both with experts and other sellers.

Both the help center and the forums are their first line of defense. If help cannot be found there, you can find it with a live agent.

Etsy has both email and phone support, but not at all hours, and calls get scheduled by availability so you might be waiting a bit. 

Their help center covers a ton of the biggest questions new sellers will have, with powerful how-to guides for starting your store and marketing it. 

On top of that, there is a huge community of sellers that go back and forth in the forums with common issues.

Shopify’s support definitely has the edge on Etsy. Their pricing plans include this elevated store support experience.

Shopify and Etsy: Why not both?

While it may seem like merchants must choose between using Shopify or Etsy, it doesn’t have to be a ‘one or the other’ choice. Shopify and Etsy are very different ecommerce services—one a store builder and the other a full-on marketplace.

You can have multiple sales channels to capture sales from a larger sampling of shoppers.

The fact is that Etsy is a super easy option for starting a store with a built-in audience clambering to buy. You can easily test the waters with Etsy to see if your products have sufficient demand.

As you grow, you can start building your own store on Shopify and build your brand identity in the process. You can even take advantage of powerful apps to make your store completely custom.

Once you’ve built up your own audience, you can either operate both stores or put your focus on your Shopify store.

To get around any extra work that comes with managing these two sales channels, you can use a Shopify app—like the Etsy Marketplace Integration—to sync your two shops and import products simply. 

The integration, of course, comes with its own costs for stores with more than 10 products, so you’ll have to do your own math to figure out if it’s worth it.

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Sean Flannigan

Sean is one of Shogun's tireless content marketers. When he isn't creating exciting ecommerce content, he's probably biking or at the park.

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