Selling on Etsy vs. Shopify: What’s Best for Your Business?

The gig economy has opened up a world of opportunities for professionals across most industries. But you don't have to be a programmer, tutor, or consultant to make money online. If you're a small business owner or someone looking to start a side hustle, you can use platforms like Etsy, Shopify, or thredUP to sell online.

More than 256 million Americans purchased products over the internet in 2020 — and this number is expected to reach 291.2 million by 2025. About 20% of consumers buy from retail websites, while 19% use online marketplaces, according to a 2020 Wunderman Thompson report.

As an entrepreneur, you can leverage these trends and start a profitable business or expand your reach. With that in mind, make sure you understand the key differences between selling on Etsy vs. Shopify.

Each platform has distinct features, and choosing one depends on your preferences and technical know-how. You also need to consider your target audience, marketing strategy, and overall budget, among other factors.

Not sure where to start? Here's what you should know about Etsy vs. Shopify and how to choose a platform that meets your business needs.

How Does Etsy Work?

Founded in 2005, Etsy is an online marketplace that connects sellers and buyers from all over the world.

What makes it different from Amazon and other shopping platforms is its focus on handmade, vintage, or craft goods, which brings together talented artists with unique skills. Customers can choose from millions of products, including:

Handcrafted jewelry

Vintage bags

Fashion accessories

Handmade shoes

Clothing

Custom artwork

Collectibles

Party supplies

Unique home decorations

Cosmetics and skincare products

Craft supplies

Toys

Books and magazines

Vintage appliances

The Etsy marketplace appeals to independent sellers rather than popular brands and big companies. Unlike Amazon, it doesn't have a warehouse and fulfillment centers. Instead, customers buy directly from Etsy sellers.

Most sellers use artistic or editorial photos to market and sell their products on Etsy. Amazon, eBay, and other platforms, by comparison, feature professional product photos.

However, you can always use Pixecut to create better product photos for your Etsy store without hiring a pro — but more on that later.

Shopify at a Glance

When it comes to selling on Etsy vs. Shopify, these two options couldn't be more different.

The latter is an eCommerce platform that provides users with the tools they need to set up and run an online store. It's not an online marketplace, but a subscription-based software product for businesses of all sizes.

Established in 2006, Shopify enables merchants to build and launch eCommerce websites. Heinz, Lindt, Oatly, Deliveroo, Redbull, Gymshark, Allbirds, Nescafé, and other popular brands all use this platform to sell online. The same goes for A-list celebrities like Adele, Victoria Beckham, and Paul McCartney.

As of today, Shopify is the second largest content management system (CMS) after WordPress, with a 6.5% market share. Its closest competitors are Wix, Squarespace, Joomla, and Drupal.

What makes this platform stand out is its intuitive interface and ease of use. Anyone can set up a Shopify store without writing a single line of code.

Shopify sellers have access to powerful eCommerce tools and apps for web design, marketing, analytics, and store management. Plus, they can choose from over 70 professional templates in every style you can think of. Some are bold and colorful, while others feature a minimalist design.

Selling on Etsy vs. Shopify: Key Features Every Merchant Should Know About

Both Shopify and Etsy are designed to facilitate online sales. The difference between the two lies in what and how you can sell.

Feeling confused? Let's take a closer look at Etsy vs. Shopify to help you make the right choice for your online business.

Getting Started with Etsy

Flavored toothpicks? Tiny ghosts in a jar? Creepy baby doll head candles? Haunted dolls? Whatever oddities (or cool stuff!) you want to sell, you can reach millions of potential customers on Etsy.

As one of the largest online marketplaces, Etsy features all sorts of products — especially unique, handmade goods and vintage items. Getting started couldn't be easier. Simply take these steps:

1. Sign up for an Etsy account

2. Complete your profile page

3. Go to Etsy.com/sell and click Open Your Etsy Shop

4. Choose a name for your Etsy store and then select the country, currency, and language

5. Upload product photos and describe what you sell

6. Enter your payment information

7. Turn on two-factor authentication

8. Customize your storefront

9. Promote your listing and start selling

Later, you can upgrade from a standard plan to Etsy Plus, a premium subscription plan with extra features. Etsy Plus sellers receive free advertising and listing credits, plus other perks, such as special discounts on business cards.

The Standard plan doesn't include a custom domain name. When customers visit your online shop, they'll see the following in their browsers:

https://yourstore.etsy.com

https://www.etsy.com/shop/yourstore

With Etsy Plus, you can set up a custom domain name through Hover, a third-party vendor. If you choose this option, your online store's URL will look like this: https://yourstore.com.

Having your own domain name can make it easier to grow your brand and build trust, but it’s not a prerequisite for success.

Getting Started with Shopify

Unlike Etsy, Shopify doesn't provide an online marketplace where you can list and sell your products. Instead, it offers the tools you need to build an eCommerce site from scratch, get paid, and reach customers.

Think of it as an all-in-one business solution. With Shopify, you can set up and configure your website, start a dropshipping business, manage offline and online sales, and track the customer journey. Plus, you'll have access to data analytics, reports, and search engine optimization (SEO) tools.

There are two ways to get started with Shopify:

Use an online business marketplace to buy an existing Shopify store

Build an eCommerce website from the ground up

The fastest way to get your business up and running is to buy an existing store via Shopify Exchange, an online marketplace featuring over 10,000 eCommerce sites in every category you could think of.

Each listing includes relevant information, such as the average monthly revenue, monthly sales, website traffic, branding assets, suppliers, and more. Some users also sell their inventory and can put you in contact with suppliers and other vendors so you can get started right away.

Another option is to leverage Shopify's eCommerce tools and build your online store from the group up. This process requires some technical knowledge, but it's pretty straightforward.

Here's what you need to do:

1. Create a free account, or Shopify ID

2. Set up two-factor authentication

3. Click Create a Store

4. Choose a name for your online shop

5. Enter relevant information, such as your business address and billing details

6. Set up your domain name, payment gateways, and shipping options

7. Select a website template and customize it based on your needs

8. Create and organize your product listings

9. Start selling on Shopify

New users have access to a 14-day free trial. After that, they must choose a subscription plan. Shopify offers three membership options, plus premium themes, add-ons, and eCommerce tools.

Depending on your preferences, you can either set up your domain name via Shopify or use an existing one. All plans include web hosting, so you won't have to pay extra for it.

What Can You Sell on Etsy vs. Shopify?

As mentioned earlier, one of the main differences between Etsy and Shopify lies in what you can sell.

Etsy is a specialized marketplace with a strong focus on handmade and vintage items. As you would expect, it has certain rules on what may be sold in each of these categories.

For example, you cannot sell handcrafted items that have been made or designed by someone else. Likewise, you cannot resell handmade goods. Sellers must create the products themselves in order to sell them on Etsy.

The platform also prohibits the sale of alcohol, medications, hazardous materials, and other products, such as:

Hate items

Native American crafts

Pornographic materials

Live animals

Hate items

Medical devices

You can sell beer brewing kits or boozy chocolates, but not beer or other alcoholic beverages. Similarly, you may sell kitchen knives, toy guns, or letter openers, but not real weapons.

Shopify, on the other hand, allows most types of products that comply with the law. As far as restrictions go, you may not sell certain types of firearms or firearm parts and goods or services that promote violence, bullying, or other illegal practices.

With Shopify, you have a lot more freedom in regards to what you can sell, but this also adds an extra layer of responsibility. You'll need to research the laws in your state, check international shipping restrictions, and inform buyers about the risks associated with certain goods.

Etsy vs. Shopify: Ease of Use

When it comes to selling on Etsy vs. Shopify, both platforms are easy-to-use and allow for a hassle-free experience.

However, Etsy might be a better choice for new sellers, especially those with limited technical expertise. With this option, you won't have to worry about setting up a website, optimizing it for the search engines, or adding new features.

Your only job is to choose a name for your store and create product listings. Sure, you can (and should) go one step further and optimize your listings, but you won't have to optimize an entire website to make sure it shows up in search results.

Shopify, by comparison, requires some basic knowledge of web design and SEO, as well as familiarity with content management systems. You can't just set up your website and expect to get sales. As a Shopify seller, it's your responsibility to attract and engage customers, promote your listings, and optimize your pages for the search engines.

About 91.5% of all web traffic comes from Google. If your website isn't optimized for online searchers, you'll get little or no traffic.

Etsy already has an established customer base. Even if your listings are not properly optimized, buyers may still find them when browsing the platform.

To increase your chances of success, set up an attractive storefront and include high-quality images that reflect your brand. Use Pixelcut to customize or remove the background from an image, add special effects, and make your product photos stand out.

Shipping Options

As discussed earlier, Etsy sellers ship their products directly to customers. So, if you're located in the U.S. and you get an order from Poland, you must choose the most cost-effective delivery option and handle the shipping. Depending on where you live, you may be able to purchase shipping labels on Etsy.

Shopify sellers can deliver directly to customers, too, but they may also use Shopify Shipping to streamline the whole thing.

With this option, you may connect your Shopify account to USPS, DHL, DPD, or other shipping carriers to fulfill orders faster and cheaper. Like with Etsy, vendors can print shipping labels directly from their accounts.

Alternatively, you can start a dropshipping business via Shopify. In this case, you won't need to maintain an inventory of products and handle deliveries.

When someone places an order, the dropshipping supplier receives a notification from your Shopify store. After that, he prepares and ships the order directly to your customer.

You can do the same on Etsy — although its policy doesn’t specifically mention dropshipping. Note that you’ll still need to design the products yourself.

If, say, you have some great T-shirt design ideas, reach out to a dropshipping supplier who can produce the T-shirts and use your designs.

Ecommerce and Marketing Tools

Both platforms offer a bunch of marketing and eCommerce tools, but Shopify is a lot more complex.

Etsy sellers can add tags and attributes to their listings to drive traffic. Another cool feature is Etsy Stats, an analytics tool that measures key metrics, such as total and monthly revenue, conversions, traffic sources, and the number of visitors.

Plus, you can use Etsy Ads to gain exposure on the platform. Don’t forget about social media either. Take the time to promote your Etsy listings, engage with potential buyers, and grow your following on Facebook, Pinterest, and Instagram.

These features are quite basic, but Etsy appeals to small, independent sellers who focus more on their craft and less on the technical aspects.

If you're a medium or large enterprise, go for an all-in-one eCommerce platform like Shopify. Once your store is up and running, you can use Shopify's marketing tools to grow your eCommerce business. These include but are not limited to:

Pre-build email templates and sign-up forms

Email marketing tools (e.g., abandoned cart recovery emails)

Customer segmentation tools

Marketing automation tools

Advanced analytics for real-time insights

Live chat and messaging apps

Automated messages

Automatic discounts

Access to over 1,500 marketing add-ons

Third-party integrations with Mailchimp, Amazon, eBay, Hubspot, and other platforms

Multiple payment gateways, such as PayPal, Apple Pay, and Google Pay

Access to Shopify POS, a free point-of-sale app

Step-by-step tutorials for beginners and new sellers

What's more, sellers can connect their Shopify accounts to Facebook and Instagram to streamline advertising and data analytics. Shopify also works with Google Analytics, offering a 360-degree view of the customer journey.

Etsy Seller Fees

As far as pricing goes, both Etsy and Shopify offer multiple pricing options.

Etsy vendors are subject to a $0.20 listing fee per product, plus an additional $0.20 for each variation of the item they sell. However, the latter fee is applied only when customers purchase more than one variation of the product. The platform will also charge an additional fee of $0.20 for private listings.

When you sell a product, you'll pay 6.5% of its total value in your designated currency. Additional fees may apply for shipping, advertising, and currency conversion.

Last but not least, you'll need to cover the payment processing fees. These may vary based on your location, VAT, sales tax value, and other aspects.

Established sellers can upgrade to Etsy Plus, which includes additional features and tools. The monthly price is $10, plus sales tax (for U.S. vendors).

Shopify Pricing

Shopify provides three membership plans at different price points, plus two additional options, Shopify Plus and Shopify Lite. Vendors who pay for one year upfront receive a 10% discount, while those who sign up for biennial plans pay 20% less.

Basic Shopify starts at $29 per month, but you'll also have to pay a transaction fee of at least 2% per sale

The Shopify plan starts at $79 per month, plus a flat fee of 1% or higher per transaction

Advanced Shopify is $299 per month, plus transaction fees of at least 0.5% per item sold

Another option is Shopify Plus, which appeals to high-volume merchants and global enterprises. The monthly subscription starts at $2,000.

Shopify Lite, on the other hand, is designed for physical stores or websites using a different CMS. If you opt for this service, you'll gain access to some of the platform's key features, such as its analytics and reporting tools.

For example, sellers can use Shopify Lite to add additional features, such as Buy buttons and gift cards, to a website running on WordPress or Wix.

All in all, Shopify is more expensive than Etsy, but it also offers a larger selection of tools. It's also worth mentioning that sellers pay a flat monthly fee, regardless of the number of products listed.

Shopify vs. Etsy: Pros and Cons

Now that you know more about Shopify vs. Etsy, you may wonder which one is best for your business. The answer depends on your business size and industry, marketing goals, and technical know-how, among other factors.

Etsy is similar to Amazon, but with an artistic touch. About 87% of the vendors using this platform are women, and 80% of all sellers operate a one-person business. Therefore, it's fair to say that Etsy can be a great choice for female entrepreneurs.

Shopify, by comparison, offers a whole bunch of eCommerce tools for businesses of all sizes, from startups to global brands. As of today, it powers over 3.76 million eCommerce websites, including 2.62 million online stores based in the U.S.

There's no doubt that both platforms have powerful features that can take your small business to the next level. Shopify, however, gives retailers more control over branding, customer management, user experience, and other aspects.

Not sure what to choose? Let's break down the pros and cons of Shopify vs. Etsy to help you make an informed decision.

Etsy Pros and Cons

With its user-friendly interface, Etsy is ideal for artists, side-hustlers, and entrepreneurs looking to start small or simply test the waters. Compared to Shopify, it's more intuitive and requires less technical expertise.

After you sign up, you can create and customize your storefront with just a few clicks. Plus, you can build your own website with Etsy Pattern when you're ready to grow your business. This service isn't as scalable as Shopify, but it gives more flexibility than a standard Etsy store.

Traditional Etsy stores, however, are quite limited in terms of design and branding options. Sellers have little control of their stores and the user experience as a whole. What's more, Etsy doesn't provide any tools for email marketing and SEO.

On the positive side, Etsy has millions of customers and gets steady traffic, which can result in more exposure for your store.

Simply put, it gives you access to a pre-built audience, reducing the need for an elaborate marketing strategy.

Shopify Pros and Cons

Just like Etsy, Shopify provides everything you need to set up your own online store and reach customers worldwide. You’ll get access to hundreds of themes and multichannel marketing tools, plus third-party integrations and add-ons via the Shopify App Store.

By far, the biggest advantage of using Shopify is that you'll have full control over your online shop.

You decide what and how you want to sell, what your storefront will look like, and how customers can pay. For example, you can only accept credit card payments or provide additional options, like PayPal and Stripe.

The platform also offers powerful eCommerce tools for email marketing, SEO, fraud analysis, and much more. Sellers can set up automated emails, assign inventory to their retail stores, segment their audience, and issue gift cards — all from a centralized dashboard.

But that's not all.

With Shopify, you can automatically convert currencies for each market, collect import taxes at checkout, and set up different payment methods for customers in different countries or regions. You'll also get discounted shipping rates from UPS, USPS, and other carriers.

Shopify offers greater functionality than Etsy, but it requires more work. Since you have full control over your website, you'll have to learn about SEO, digital marketing, and paid advertising. On top of that, you could end up spending thousands of dollars on apps you don't really need.

This service appeals to beginners and advanced sellers alike. However, it can get expensive and time-consuming if you're new to eCommerce. As your business grows, you may need to hire a developer, SEO experts, and marketing pros to help you out.

With either platform, there are steps you can take to gain exposure for your store. Small things, such as using appropriate visuals and optimizing your listings, can make all the difference.

Drive More Customers and Sales

Both Etsy and Shopify rely on visual content to attract traffic and drive sales. No matter what platform you choose, it's essential to use crisp, sharp photos in your listings.

A 2018 survey revealed that more than 80% of smartphone users rely on product images when shopping online. Surprisingly, only 36% make a purchase decision based on product videos, reports eMarketer.

Another study cited by eMarketer found that 60% of American consumers want to see three or four images before buying a product. Another 13% prefer to see at least five photos.

Given these aspects, it makes sense to leverage visual content to promote your eCommerce business.

Etsy appeals to side-hustlers and small business owners, but you still need quality photos to make your store stand out from the crowd. Ideally, use an intuitive photo editing tool like Pixelcut to adjust your images. Here are some tips to help you out:

Use Pixelcut to instantly remove the background in your photos and let your products shine

Choose a similar first photo for each item in your store for a more cohesive look

Adjust your photos to follow the platform's general vibe

Take close-up shots of jewelry, handcrafted items, and small objects

Get creative with your props

Crop your photos to make sure the product is centered in the image

Take photos from multiple angles, such as from above and below

Use Pixelcut to resize product photos to Etsy's standards (Listing images should be at least 2,000 pixels wide, while shop icons should be around 500 x 500 pixels)

Highlight the details of your product with Pixelcut

Add special effects, such as reflections, single or multicolor filters, and low key lighting

Shopify offers greater flexibility, but it also has a more commercial feel. Therefore, it's best to use professional photos to make your products pop.

The downside is that professional photography can be expensive. As a small business owner, you may not afford to spend thousands of dollars on professional shots — and that's where Pixelcut can help.

With our image editing tool, anyone can produce high-quality product photos in seconds. Use Pixelcut to erase or edit the background, add custom fonts, and make whatever adjustments are needed.

Selling on Etsy vs. Shopify: Make the Right Choice for Your Business

There's no right or wrong decision when it comes to selling on Etsy vs. Shopify. Both platforms are suitable for beginners and can help you build a successful business from the ground up.

If you're not sure where to start, set up an Etsy store and see how it goes. As your business grows, you can move to Shopify or use both platforms.

Most importantly, think long-term.

If you only have a few items to sell, it doesn't make sense to build a website from scratch. In this case, Etsy is more than enough. But if you plan to build a brand or expand your product line, then Shopify is the way to go. Alternatively, you can use Etsy Pattern to set up an eCommerce website.

So, are you ready to bring your vision to life? Meanwhile, join Pixelcut to see how easy it is to create professional images for your eCommerce business!

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