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Etsy or Shopify – which one is better?

by Michaela fong

Small Business

Etsy or Shopify – which one is better?

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Should you sell on Etsy or Shopify? Is one better than the other? And how do you know which one will be best for your business right now? Should you sell on both?

If you started your small business or are considering starting one soon, you are probably asking yourself one of the questions above. I’ve built a six-figure business on Etsy and on Shopify, and I could talk about their pros and cons all day long! Today, I am giving you my honest answer, together with guided questions that will help you decide which selling platform is best for your situation. 

Here’s a fact you should know:

While many Etsy sellers are closing their shops every day and moving to Shopify, Shopify sellers are closing their shops and moving to Etsy too. Ask 1000 small business owners which platform is better and everyone will give you different answers about their preferred selling platform and why. The thing is, what may work for one small business may not be the best choice for another. 

Etsy and Shopify are both great platforms for small business owners, but they’re completely different. If you don’t understand the nature of each platform, then it will be hard to make either platform work for your business. 

So before you make the major decision to start an Etsy or Shopify store, or switch from one platform to another, I’m here to give you a realistic perspective and explain the most important facts you need to know about both, so you can choose the platform that fits your needs. Let’s start with Etsy. 

What is Etsy?

Etsy is an online marketplace. What does that mean? It means Etsy provides a platform for small business owners to sell their products online and connect with customers specifically interested in their products. 

Think of it as the Amazon for handmade and unique products. Just like on Amazon, Etsy has its own search bar where customers type in what they’re looking for. From there, carefully selected and curated results pop up on their screen, ready for them to explore, click on, and purchase.

What is Shopify?

Shopify is an e-commerce platform. What does that mean? It means Shopify gives you the freedom to host and create a fully branded online store through your own professional website.  

You can use your own domain, choose from free or paid themes, integrate email marketing and social media, and even have a blog. It’s all about creating a personalized experience for your customers and making your online store uniquely your own.

The Differences Between Etsy & Shopify

Getting Traffic

  • Etsy:

    Get this: In 2022, Etsy invested 581 million USD on advertising and marketing. As a company, it’s in Etsy’s best interest to bring small business owners like you to their marketplace because the more you sell, the more they earn. 

    So if you don’t know how to drive traffic to your online store or you haven’t built up an audience yet, Etsy gives you the incredible advantage of making it easy to start from ground 0. 
  • Shopify:

    There is no Shopify marketplace and no such thing as a shopify.com where people can go and shop for products. 

    It’s up to you to build your online shop, website, and take care of your own online marketing. Shopify doesn’t bring you customers, so you are 100% responsible for bringing traffic to your website (which is a lot more complicated than it sounds — and I’ll talk about that in a second).

Attracting Customers

  • Etsy:

    To take advantage of Etsy’s marketplace and worldwide traffic, you need to understand how your products can get found in an Etsy search. It would be great if ideal customers came to your shop the moment you hit publish on a product listing, but unfortunately, it’s not that simple. 

    There are many sellers on Etsy with products probably very similar to yours. So getting found and standing out in Etsy’s marketplace requires a strategy. You’ll need to study the competition, choose a niche based on the competition, set competitive pricing, and learn how to follow their SEO rules with quality keywords for every listing. Not sure what SEO is or how to use Etsy keywords? Download my Free Etsy SEO Guide to get a jumpstart. 

    If you don’t take all this strategy into consideration, it’ll be nearly impossible for Etsy shoppers to find your product in an Etsy search. But once you’ve dialled in your strategy, you can drive traffic to your shop through Etsy search and without a social media strategy.
  • Shopify:

    With Shopify, you don’t have to build a product directly based on what your competitors are doing in the marketplace . When shopping on Etsy, people naturally compare products similar to yours because they see other options in their search feed. If you want to build your own brand and feel passionate about your product, Shopify gives you the freedom to go all in, without having to closely scan the competition! 

    But as a stand-alone online store, you’ll need to build an audience and learn how to market your products online to make sales. And as a side note: marketing your product doesn’t mean occasionally posting about it on Instagram or Facebook. 

    With thousands of small businesses on social media, you’ll need to have a solid marketing strategy that attracts the right followers and converts your audience into paying customers.  There are plenty of ways to promote your product online, like through Pinterest, Instagram, or growing an email list. It’s possible to gain traction through all these platforms on your own, but it will take time and a lot of upfront effort. 

Ease of use

  • Etsy:

    Etsy is entirely beginner friendly. You can open an Etsy shop and start listing your products immediately. Even if you don’t have really good technical skills, they make it super straightforward to set up. Just watch a few of their tutorials step by step and you’ll have your shop up and running in literally a few hours! 

    Sound too good to be true? Well, there are strings attached. Remember, you’re promoting products on Etsy’s public marketplace. And since they’re bringing you customers, they make the policies and rules, and you have to abide by them. Like for example, on Etsy, you can only sell handmade products, handcrafted products, vintage products, or craft supplies. If you don’t follow their rules, they have every reason to shut down your store, and they will.

    Something else to keep in mind: unfortunately, it’s a nightmare to get in touch with somebody on Etsy. It’s not entirely impossible. It just requires a lot of patience and messaging them several times until you hear something back, which isn’t ideal. I’ve heard so many Etsy sellers get frustrated because they couldn’t get a hold of customer service when a problem came up with their store. It’s happened to me a gazillion times at this point, but I’m hopeful they’ll get better with it soon. 

    Overall with Etsy, I’d say it’s easy to get started, but their customer support isn’t the greatest.
  • Shopify:

    When it comes to Shopify, it’s often quite overwhelming to set up for beginners. There are a lot more settings to configure and different themes to choose from. Plus, there are tons of different apps you’ll need to integrate with your shop. You may even need to hire someone to help you get everything going. 

    So if your technical skills aren’t great like mine, and you get overwhelmed by different computer programs, Etsy is a lot easier to start with. 

    The good thing about Shopify is that, again, you have complete control over your store. Shopify’s customer service is a lot more accessible and there isn’t a huge list of rules or policies you have to follow closely, either. 

Costs & Fees:

  • Etsy:

    There are rumours going around that Etsy is more expensive to sell on than Shopify, but that isn’t always true. It really depends on the product you’re selling, how many products you sell, and how you price your products.

    Earlier we talked about Etsy’s rules and policies. Well, there is no monthly subscription for Etsy. But in terms of cost, their biggest policy is a $0.20 USD fee per listing, regardless of whether or not your listed items sell. And on top of that, you have to pay Etsy a 6.5% transaction fee with every product sold, plus the amount you charge for shipping and gift wrapping. 

    This is the biggest perk of selling on Etsy: pay your fees, they’ll bring you customers. The downside? If your store isn’t selling enough products or you don’t price products accordingly, those fees can eat up your profits. 
  • Shopify:

    With Shopify, you pay a monthly subscription fee of either $29/month, $79/month, or $299/month depending on the size of your store and the plan you need. To get your shop fully functioning, you’ll likely need to hire help, with some additional apps you have to pay for as well. Not to mention, you still need to drive traffic to your website, which means you may have to pay for ads upfront. 

    To be completely honest with you, when I was running a Shopify store and an Etsy store full-time, the expenses I paid for both stores were about the same. Of course, pricing is an important part of your decision, but I encourage you to not worry so much about pricing, and focus more on comparing the features of both Etsy and Shopify as a whole with your small business goals. 

    And with that, let’s summarize the pros and cons of each platform so you can take everything into consideration when choosing a platform that best fit your needs: 

Etsy Pros & Cons

Pros:

  • It’s beginner-friendly 
  • It doesn’t require advanced technical skills
  • It’s quick and easy to set up 
  • Etsy spends tons of money to bring millions of customers to their marketplace so you don’t have to attract customers on your own
  • You can drive traffic to your shop without social media marketing by learning how to optimize for keywords 
  • Its built-in analytics help you understand which keywords drive traffic to your shop 
  • There are no upfront costs, only a $0.20 fee to publish every listing

Cons:

  • You can only sell handmade products, vintage products, or craft supplies  
  • You have to follow Etsy’s rules (policies like paying the 6.5% transaction fee + $0.20 listing fee) whether you like them or not
  • Etsy can shut down your store without warning when you go against their policies (even if you were unaware of it) 
  • Due to direct competition in the marketplace, other sellers can undercut your prices or copy best-selling designs 
  • There’s limited brand customization — you have to use Etsy’s aesthetics which makes it hard to build a recognizable small business brand 
  • You don’t own your customers — they belong to Etsy and often customers don’t even remember your shop
  • Customer service is hard to reach when you need them 

Shopify Pros & Cons

Pros:

  • There aren’t strict Shopify policies — for the most part, you make your own rules
  • You can buy and use your own custom domain name
  • You can have a professional and custom-branded online store without knowing how to code
  • You can purchase a Shopify template and create custom branding to make your online store look branded and professional
  • You can easily engage in social media marketing and email marketing
  • You can sell any kind of product, not just vintage products or craft supplies
  • Other competitors aren’t displayed on your website 
  • You can personalize your customer’s shopping experience 
  • You don’t pay transaction fees for every sale — you only have to pay for your monthly Shopify plan and for any other paid apps you choose to integrate 

Cons:

  • It’s overwhelming to set up for beginners who don’t have strong technical skills
  • Launching your Shopify site doesn’t mean you’ll automatically get customers — you’re 100% responsible for bringing customers to your shop
  • To drive traffic to your shop, you’ll need to learn online marketing which can be a steep learning curve for small business owners with no marketing background
  • You may have to pay to customize your site or pay for ads to drive traffic to your shop
  • It’s likely you’ll need to hire someone to help set up your Shopify store 
  • There are upfront set-up costs (like a monthly subscription — $29/month, $79/month, or $299/month —  hiring help, paid ads, etc.) 

Now that you know how both platforms operate, you can see that one platform is NOT better than the other. But one may be more suitable for your business than the other based on your skill set, preferences, and goals. So without further due, let’s dive into the specific questions you need to ask yourself before you decide to open your Etsy/Shopify store or switch from one platform to another.

Which platform is the best for you?

01 – Question to consider: What are you selling? 

As I mentioned before, on Etsy, you can only sell handmade items, craft supplies, and vintage products. Here’s what that means specifically based on Etsy’s policies:

  • Handmade Items“Handmade items are items that are made and/or designed by you, the seller. You must: 
  • Physically make or create the original designs for your items
  • Include each person involved in making your items or running your business in the about section of your shop
  • Disclose a production partner in relevant listing if you work with one
  • Use your own photographs in your listings
  • Refrain from reselling, because it’s not allowed in the Handmade category on Etsy.”
  • Craft Supplies “Craft supplies on Etsy are tools, ingredients, or materials whose primary purpose is for use in the creation of an item or special occasion. Craft supplies may be handmade, commercial, or vintage. Party supplies may also be sold as craft supplies.”
  • Vintage Items “Vintage items must be at least 20 years old. Newer, vintage-style, or collectible items aren’t allowed in this category.”

If you aren’t selling any of the above, you can’t sell on Etsy and will have to sell on Shopify or another e-commerce platform.

02 – Question to consider: How serious are you about your small business? 

A) Do you want to try to sell your products as a weekend hobby to earn extra pocket money? Are you looking for an easy solution that won’t require you to constantly make TikToks and take the joy out of your creativity? Point for Etsy!

B) Do you want to grow your business long-term? Are you willing to invest time and money in learning online marketing? Point for Shopify!

The ultimate question is: do you want to sell products part-time as a hobby or do you plan on running this business full-time? There’s no wrong answer here because the decision is yours to make based on your personal goals!

If you only plan on spending weekends on your business you probably won’t have the time to create content that drives traffic to your site. So in that case, Etsy is probably the better choice. 

On the other hand, if you hope to run a business full-time and build a brand from it in the future, Shopify would be the better option. 

03 – Question to consider: How are your technical skills?  

A) Are you looking for a quick and easy step-by-step store set-up? Do you get easily overwhelmed by technology? Again, point for Etsy! 

B) Do you have patience with technology, and are you OK with spending time to custom-create your e-commerce store? Again, point for Shopify!

When they start, most small business owners don’t realize how much technology goes into running a small business. There are plenty of ways to grow your skills and learn as you go through tutorials online, no matter which platform you choose.

04 – Question to consider: How will you get sales?  

Whether you choose Etsy or Shopify, making sales online is never passive. Even if you’re selling digital products, it’s important to learn how to make your products visible online so you can make consistent sales. 

A) If you want to make sales on Etsy, you must figure out how you’ll compete with established sellers selling similar products. You’ll also need to learn how to optimize your shop with keywords so Etsy shoppers can find your products in Etsy search.

B) To get sales on Shopify, you need a strategic traffic plan to bring customers to your shop. You will need to learn how to market your products online using free social media traffic or paid ads.

Make it simple: if you already have an audience interested in buying your products or are willing to learn online marketing, Shopify is the right choice for you. 

If you don’t have an interested audience (like a social media following or engaged email list) and don’t know much about online marketing, I’d recommend sticking to Etsy until you start building your audience.

05 – Question to consider: How important is it for you to have self-control? 

This is a tricky question to answer but an important one to ask. You must follow Etsy’s rules when you choose to sell on their platform. You may get rewarded with a better ranking if you do what they say, but you can also get punished for not following their policies (i.e. them shutting down your store). 

Yes, it’s a scary feeling, but let me remind you that this can happen also with Instagram, TikTok, Facebook, and Amazon. Ultimately, any platform that isn’t yours comes with both perks and risks. 

The question is:

A) Are you willing to take a chance, and will you follow their rules? If the answer is yes, another point for Etsy.

B) Are you absolutely terrified of not having complete control over your shop? And are you willing to do everything we mentioned above to make Shopify work for you? Then another point for Shopify.

Now, once you’ve answered all the questions, take a look at the points you gave to Etsy and Shopify and see which platform has more. 

Then, consider which points are more valuable for your unique situation. I don’t want you to get stuck, though. Choosing a platform is a big decision, but it’s also just one of many decisions you’ll make as a business owner. The sooner you decide, the faster you can move forward. 

And remember, you can always open a shop on the other platform or switch in the future if your business situation or priorities change.

I truly hope this blog post helped you to make a decision on which platform is the best for your business right now. If so, shoot me a DM on my Instagram at @‌smallbizbabescommunity; I’d love to hear which platform you chose and why!

And if you want to dive deeper into the differences between Etsy vs. Shopify, tune in and learn more in today’s podcast episode here 🎧.

Until next time,

Michaela

Do you need help getting more consistent orders on Etsy? Download my Free Etsy Success E-book to get started here.

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  1. Brianna says:

    Thank you, this helps. I have been back and fourth whether I should stay on Etsy or go on Shopify. I’m thinking of moving to Shopify because I bring in most of the traffic and I don’t like all of the fees that comes with each purchase on Etsy.

    • Michaela Fong says:

      You are welcome Brianna, so glad this was helpful for you! If you are bringing most of your traffic yourself, I think this is a great decision!

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