If you want to engage in cross-border e-commerce, then you need to consider whether to open a store on a large platform or create a shopping website yourself. Most small and medium sellers either sign up for an online store on Amazon or use Shopify to build a website. What are the pros and cons of the two?
Advantages of Amazon
1. The Amazon platform has a relatively large market share. In the ranking of the top ten retail e-commerce companies in the United States in 2021, Amazon ranks first, with a market share of 40.4%. The second is Walmart, which has been relatively popular from last year until now, ranking second, but it only accounts for 7.1%. Followed by eBay, which accounted for 4.3%. The fourth is Apple, which accounts for 3.7%. The fifth place is Best Buy, which accounts for only 2.2%. Then we can see from this data that Amazon basically accounts for 40% of the online sales in the United States. That's more than other platforms like eBay and Walmart combined.
2. Nearly half of Amazon's sales are contributed by third-party sellers. Most of these third-party sellers are small and medium-sized seller accounts like ours.
3. After the product is on the shelves, selling on Amazon is relatively simple, we just need to create a good listing. Compared with doing an independent platform like Shopify, the requirements for sellers are more difficult. For example, as an independent website seller, you need the ability to decorate your website, purchase a domain name, and build your own traffic channels.
4. The Amazon platform has its own shopping traffic. Amazon has nearly 300 million active users, and nearly two-thirds of Americans shop on Amazon.
5. The conversion rate of Amazon is relatively high, and the trust level of Amazon buyers is very high. Based on this concept of customer first, the conversion rate of the Amazon platform is about 10%, which is much higher than the conversion rate of this third-party platform of about 1%.
Disadvantages of Amazon
1. To some extent, its competition is fierce. If the current Amazon has no real data verification in the product selection process, and if the products are not scientifically differentiated, the road to operation will be extremely difficult.
2. The platform can easily close your account. Some sellers did have their stores closed because of their non-compliant operation. There are also some unreasonable bugs in the platform, the system may automatically determine that your account is in violation, so we need a very long appeal process, and there is a possibility that it will not pass.
3. There are many bugs in the system. The Amazon platform is really too large. Sometimes there will be bugs in some functions related to our sellers, such as the loss of goods on the platform, the calculation of FBA fees, etc.
4. The cost of FBA fees is relatively high. Although we can enjoy a lot of convenience by using Amazon's FBA service, such as providing customers with a good customer experience, we don't have to worry about delivery. But if you cannot reasonably calculate your product cost and set the selling price correctly, it is very likely that you will not get the expected profit in the end.
Advantages of Shopify
1. It is relatively convenient to build a website. Basically, spending about 40 minutes, we can build a Shopify shopping website.
2. There are some products that we cannot sell on the Amazon platform, but these products can be sold on Shopify.
3. Shopify has relative autonomy. Compared with Amazon, Shopify will only shut down your website under special circumstances.
4. Can accumulate customer information. When a buyer completes the purchase of a product on our Shopify platform, the seller can obtain his email address and phone number, which facilitates our subsequent remarketing to customers.
5. This traffic source for Shopify is diverse. We can get traffic from social media platforms, such as Instagram, YouTube, or TikTok, and we can also do website SEO to get more natural traffic. Then we can also use Facebook ads and Google ads to track the actual effect of ads more conveniently. These are relatively not so easy on the Amazon platform. The effect of off-site drainage is still good, that is, to obtain traffic on channels such as INS, YouTube, or TikTok, multiple accounts need to be registered, and IPs from various countries will be used. It is recommended to use YiLu Proxy
, covering more than 200 countries and regions, among which static IP is very suitable for registering accounts on these websites, because a stable IP address can guarantee the security of the account.
Disadvantages of Shopify
1. The difficulty of obtaining traffic is high, which is also one of its biggest problems. Just like the Amazon platform we just talked about, it has penetrated into the lives of Americans. The Amazon platform is the first choice for everyone to shop online. And through Shopify's self-built website, we need to have the ability to obtain traffic independently, and we must also optimize the relevant settings in the station to promote consumers' trust in you, and finally complete the conversion process.
2. Logistics is difficult. It is not like Amazon's FBA service model. The platform has helped us sellers solve the delivery problem. As a Shopify seller, if you really want consumers to have a better logistics experience, it is best to find a suitable third-party logistics company in the destination country to complete the delivery.
In fact, whether it is Amazon or Shopify, for sellers, the core capability is to provide suitable products to consumers, and products are the foundation. The choice of platform and operation technology are all to make this product reach the people in need. If you have a high-quality product, both platforms can actually run. If your operational ability is relatively not that strong, it is recommended to open a store on Amazon first, and then use Shopify.