Etsy vs Shopify- Which is better for your small business in 2022?

So, you’ve decided start an online e-commerce business, and you’re not sure whether you should use Shopify or Etsy.

You might be wondering what the differences are between these two platforms, and what the pros and cons of each are.

In this post, we’ll cover the main differences between Etsy and Shopify, and why you might want to use one over the other for your small business.

What are some key differences between Etsy and Shopify?

While Etsy and Shopify can help you achieve a similar goal of starting your small business, they go about it in very different ways. Before we dive into the details, let’s take a look at some key differences between Etsy and Shopify.

	Etsy	Shopify
📝 Description	Etsy is a global, online marketplace with a focus on handmade, craft, and vintage goods.	Shopify is an all-in-one e-commerce platform that allows businesses of all types to run online stores.
💰 Pricing	Etsy charges per listing and per sale according to the following: A 20 cent listing fee for each item in your shop, a 5% transaction fee for each sale, and a 3% + 25 cent payment processing fee	Shopify uses a monthly subscription model, which will run you anywhere from $9/month to $279/month. Most small businesses will find the $29/month package suffices.
✅ Key benefits	✔️ Join an existing marketplace with millions of buyers. ✔️ Very easy and low cost to get started. ✔️ Great for craft businesses.	✔️ Customize your shop from head to toe and use a custom domain name. ✔️ Email marketing integration to build your email list. ✔️ Built for businesses to scale.
❌ Drawbacks	✖️ Limited customization options ✖️ High transaction fees and cost per item	✖️ No free plans available ✖️ You’ll have to find ways to drive traffic to your shop on your own

Etsy vs Shopify Pricing and Fees

Shopify uses a monthly subscription model, whereas Etsy will cost you per listing.

Which one comes out to be cheaper? Usually, Etsy.

There are very few upfront costs with Etsy, so you can get your shop up and running for a very small amount of money.

Shopify Plan Comparison:

While Shopify offers a 14 day free-trial to get started, you’ll then have to select a monthly plan that ranges from $9 per month for Shopify Lite, to $299+ for Shopify Advanced.

• Shopify Lite ($9/month): Shopify’s most basic plan offering which does not include a custom website, but allows you to place Shopify “Buy Buttons” on your pre-existing website.
• Shopify Basic ($29/month): Shopify’s entry level plan for new e-commerce businesses, which includes an online store and transaction fees of 2.9% + 30¢ USD.
• Shopify Regular ($79/month): Includes everything that shopify basic includes with additional staff accounts, USPS Priority Mail Cubic® pricing, and a lower transaction fee of 2.6% + 30¢ USD.
• Shopify Advanced ($279/month): Includes everything that Shopify Regular includes with additional staff accounts, inventory locations, advanced reporting, duties and import taxes, and a lower transaction fee of 2.4% + 30¢ USD
• Shopify Plus: Enterprise solutions for large businesses

Etsy fees

For Etsy, you won’t have to pay anything until you list your first item in your shop.

For each item you list, you’ll page a 20 cent fee. While this fee is small, it can add up. Each time you sell an item, you’ll have to pay 20 more cents to re-list it.

When you sell an item on Etsy, you’ll be subject to two more fees:

• a 5% transaction fee
• a 3% + 25 cent payment processing fee

While the price per listing and sale are much more with Etsy, you’ll save money with no monthly fees.

Etsy does have a premium version, Etsy Plus. With Etsy Plus, you’ll pay $10/month for the following:

• 15 free listing credits per month ($3.00 value)
• Email alerts to customers when items go back in stock
• $5 ad credit per month
• Additional shop customization settings
• Exclusive discounts and perks

🌟 Winner:
Etsy. For a small business, lower startup fees and the lack of a monthly subscription makes a huge difference. If you’re looking for the cheapest way to start your small business, go with Etsy.

Shop Customization

Shopify and Etsy are extremely different when it comes to the customization options for your shop.

With Etsy, you’ll have access to a few out of the box ways you can customize your shop including:

• adding a shop banner
• adding a shop announcements
• creating categories of listings
• adding a shop description and story

These are great ways to get started with shop customization, but your options are fairly limited outside of this. Most Etsy shops look relatively the same.

When it comes to Shopify, your options for shop customization are endless.

You’ll have access to a robust drag and drop website builder, which you can use to customize your shop from the ground up. Many Shopify stores you wouldn’t even know were built using Shopify.

You’ll also have access to Shopify’s theme store where you can buy an out-of-the-box theme for your Shopify store that you can then customize further.

A Shopify store will stand on its own as a unique store that reflects your brand’s uniqueness.

🌟 Winner:
Shopify is the clear winner in this area. If customizing your shop to reflect your brand with a certain aesthetic is a priority for you, you’ll have better luck with Shopify.

Etsy vs Shopify for Attracting New Customers

Etsy is a marketplace that already has millions of customers.

In fact, in 2021, 96.3 million people purchased something through Etsy.

Shopify, on the other hand, allows you to create a store that lives on your own website.

Unless you prioritize gaining customer through SEO, ads, or social media, you might have a difficult time building a customer base.

With Etsy, existing Etsy users can find your products and your store through searching and browsing on Etsy. And because many shoppers are likely to already have an Etsy account, they’re also more likely to make a purchase.

When deciding whether Etsy’s existing customer base will be useful to your business, you’ll also want to consider what type of product your business sells. Etsy specializes in handmade, craft, or niche goods, so you might have better luck with Etsy if that’s what you sell.

🌟 Winner:
Etsy. With millions of pre-existing users, small businesses that start on Etsy may have the upper-hand when it comes to finding the right customers.

Learning Curve

The good news is that both Shopify and Etsy are incredibly beginner friendly. Whichever platform you decide to use for your small business, a guided onboarding process will walk you through setup with plenty of video tutorials.

With Etsy, your setup is fairly simple. You’ll add a shop banner, description, and then add individual product listings. Because you’re just adding products, and leaving everything else for Etsy to handle, you’ll save a lot of time. You won’t have to worry about the user experience and design of your shop, because Etsy already has an elegant and simple experience than users will love.

Shopify’s setup will be a bit more robust and time consuming. After all, you have to create an entire website from scratch. That said, there are tons of pre-existing templates and tutorials you can use to setup your Shopify store, so it’s really less intimidating than it sounds.

🌟 Winner:
Etsy. This is a close one, but you’ll be off to the races much quicker with Etsy’s lightweight and simple setup process.

Marketing your shop

Did you know that email is one of the best ways to connect with your customers? A good email marketing strategy can help you convert new customers, and turn one-time purchasers into loyal customers. When it comes to Email marketing, Shopify has a major advantage.

Shopify helps you to build an email list with various email marketing integrations, like offering an abandoned cart discount. You’ll also have access to your customers’ email addresses once they make a purchase.

Etsy does not offer these capabilities. Instead, you’ll communicate with customers and offer discounts through Etsy’s in-app chat.

Considering the impact of a loyal customer base on your businesses’ long term success, this is an important fact to consider.

🌟 Winner:
Shopify. If you’re thinking about building a long-term, repeat customer base, Shopify’s email marketing tools could be for you.

Pricing your products

Whether you start your business on Etsy or Shopify may have an impact on how much you can successfully sell your product for.

Consider this… When your products are listed on Etsy, customers will be evaluating them alongside potentially thousands of other similar products, all at different price points. It’ll be a lot easier for your customer to choose the best-priced product, and a lot more important for you to price your product competitively.

Over time, this direct competition is the reason why many Etsy products sell for dirt cheap.

While it’s always important to develop a pricing strategy no matter the platform, with Shopify, you’re much more free to set a price for your listing that you feel accurately reflects their value.

🌟 Winner:
Shopify. Without the pressure of selling your product for the lowest price possible, you’ll be able to set the price for your products based on their fair value

Selling in person

For many small businesses, farmers markets, flea markets, and other in person events are a great source of revenue.

If this sounds like you, it might be important to start your business on a platform that offers point-of-sale capabilities. Shopify’s POS features allow it to be used as a payment processor for in-person sales. You can connect both your in store and online business to keep track of your inventory, payments and customers.

If you choose to go with Etsy, you’ll have to integrate your Etsy shop with a Square account to take advantage of POS features.

🌟 Winner:
Shopify. If selling in person is important to you, you may want to take advantage of Shopify’s robust POS capabilities.

How much money can you make on Etsy vs Shopify?

The good news is, whatever platform you decide, your business can be successful.

Let’s take a look at a couple successful examples from both:

• CaitlynMinimalist makes over $30,000 a month selling jewelry on Etsy. Thats $360,000 a year!
• For Shopify, on the other hand, some of the largest brands you know are built on Shopify. Did you know Kylie Cosmetics is powered by Shopify? Yes, million and billion dollar businesses use Shopify.

🌟 Winner:
It’s a draw. When it comes to scale, it’s clear that the earning potential may be higher on Shopify. But for most small businesses, you can probably achieve financial success on either platform.

Using Shopify and Etsy together

When starting a small business, people often think they have to decide between Etsy and Shopify. The truth is, you don’t have to choose!

There are no rules against selling your products on both Shopify and Etsy. While it may be more economical to start with a single platform, don’t feel locked in to whatever you decide.

Many businesses run both Etsy stores and Shopify stores on their own website. That way, you get the best of both worlds. Over time, you may choose to keep one over the other, or keep running both simultaneously.

Deciding between Etsy and Shopify

As you can see, there’s a ton of factors to consider when deciding whether Etsy or Shopify is right for you. If you’re looking for some guidance, let’s take a look at some leading reasons someone might choose one or the other.

Reasons someone might choose Etsy

Etsy might be right for you if…
✅ You’re starting a brand new business and want something low cost
✅ You plan on selling handmade, craft, or vintage goods
✅ You are looking for something easy to start up
✅ You don’t yet know how you’ll build a customer base

Reasons someone might choose Shopify

Shopify might be right for you it:
✅ You want full and complete customization of your online store
✅ You plan to sell in person as well as online
✅ You already have a customer base, or a plan for marketing your shop
✅ You want to scale your shop to a large e-commerce business over time

Is Etsy or Shopify better for my business?

The fact of the matter is that it depends. It depends on your unique needs for your small business and your priorities.

I hope this comparison between Etsy and Shopify helped clear some things up for you in your decision of whether to use Shopify or Etsy.