Etsy vs Shopify – Which is Right for You

So you’re looking to start selling your handmade products online and wondering where you should set up shop. Or maybe you already have an online shop but are thinking of expanding and diversifying by adding another sales channel. Chances are you’ve heard of Etsy and Shopify, but you may not be fully aware of what they are and how they work. Let’s go over each platform and help you decide which is best for your small business.

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What is Etsy?

Etsy is a global online marketplace for sellers of handmade or vintage goods. What exactly does this mean?

• Global means that it exists around the world. You’re not limited to just your own city or country; you can sell to customers from countries worldwide. Etsy has over 100 million people worldwide that buy and sell on their marketplace.
• Online of course means that everything takes place over the internet. Your shop is hosted online and customers browse and buy over their computer/mobile phones.
• Marketplace means that it’s a collection of sellers all in one location. Like a farmer’s market with each stand having it’s own shop.

So, Etsy is a collection of shops selling products online across the world.

What is Shopify?

Shopify is different than Etsy. It’s not a marketplace with a group of other sellers all in one place. It’s an e-commerce platform that gives you a place to have your own website and shop online.

• e-commerce is the buying & selling of goods over the internet.
• An e-commerce platform is software that makes buying & selling online possible. It’s more than just an informational website with a bunch of writing. It has a search function so customer’s can find your products, a cart feature to let them manage the items in their order, and a payment feature for accepting the money for the sale.

To be clear, Etsy is also an e-commerce platform since it allows you to create an online shop. But Etsy is a group of sellers in one place with a set of rules to follow, whereas Shopify lets you create a stand-alone online shop.

Comparing Etsy & Shopify

Etsy – the Farmer’s Market

Think of it this way – Etsy is like a farmer’s market. The market organizer is responsible for running the market which could involve marketing to bring in customers, finding relevant businesses to sell at the market, providing booths for each vendor, organizing fun events for the guests, and so on. Because the organizer has to do a lot of the work, they will charge you money for selling at their event. Each business participating in the market would receive their own booth, which they can decorate and customize to some extent. They wouldn’t have to do any other work in finding a location for the market, building their own booth from scratch, etc. Their main focus will be to try and attract customers to their booth.

Benefits of Etsy

• It is an already established online marketplace. Many people have heard of Etsy and may go there to shop. Because of this, there are huge numbers of customers available to you.
• Due to its structured set up, there is less work required of you to get your shop up and running and maintained. You don’t have to design a full shop from scratch; just add your information and photos to Etsy’s shop template.
• Etsy works mainly on a commission basis, which means that they take a cut of each sale you make. Because of this, the start-up costs are very low (or even FREE if you use my link to sign up and create your own Etsy shop!). You will pay as you make sales, rather than a bunch of money upfront.

Drawbacks to Etsy

• While there are tonnes of customers, there are also tonnes of shops. You have to work to stand out and help customers find you.
• Because Etsy takes a portion of each sale, you’ll be paying fees constantly rather than just initially. As your shop grows and you bring in more sales, your fees will continue to rise at the same rate.
• Etsy has structured shop and listing set-ups so that it’s easy for customers to shop across multiple stores. This means you have less flexibility in customizing how your shop looks and adding or changing some of the features. (For example, maybe you would like to have 3 different sets of variations on a product, but Etsy only allows 2.)
• You are bound by Etsy’s rules. If you don’t follow them, they can shut down your shop. You also get little control over things like removing reviews or choosing whether to refund a customer.

Shopify – the Roadside Produce Stand

Shopify, on the other hand, is more like a roadside produce stand. It’s a single business selling at a single location. There is no event organizer doing most of the leg-work, which means you are responsible for finding a location, buying or building your stand, advertising and bringing in customers, etc. It will cost more money upfront to get everything set up and you need to work extra hard at bringing in customers. But there is less competition in the immediate vicinity. If someone finds you, they’re more likely to buy your product rather than walking to the next booth and buying it from your competitor instead.

Benefits of Shopify

• Set fees per month, rather than per sale. This can make it easier to budget and for shops with higher sales, it means a lower fee/sale than on Etsy.
• More flexibility – design and build your own website using pre-built themes with room for customization and apps that offer even more custom features.
• More autonomy – you have the ability to set your own rules and policies, without the risk of having your shop closed. You can also sell almost any products; you’re not limited to only handmade or vintage items.

Drawbacks to Shopify

• Higher start up costs – Newer shops or those with fewer sales may end up paying higher fees/per sale than on Etsy, at least until their sales volumes increase
• It requires more work and time to set up your shop, as you’re building more of the website yourself.
• It’s harder to get customers to find you. You will have to do more work and/or spend more money to advertise your shop so that customers know you exist.
• You may run into extra fees that you weren’t expecting. If you’re not familiar with coding, you may need to use apps to add features to your website. While some apps are free or offer free versions, you may need to pay for some of them to work the way you need.

Etsy or Shopify – Which is Right for Me?

There is no rule set in stone than one of these options is better than the other. It will depend a lot on you, your business, and your plans for your business. In general, my advice is as follows.

If your shop is new or small, start with Etsy (as long as your products are either handmade or vintage. If you’re a re-seller of non-handmade or vintage products, you can’t sell those items on Etsy.) The start up cost and effort is lower and it can be easier to start getting sales.

If your shop has higher sales volumes or an established following on social media, Shopify may be a better fit. You’ll have to bring in more of your own customers, but if you’re already sending a lot of traffic to your shop or just running all of your sales through DMs, you have customers ready. You just need a better place to send them that won’t cost you as much time or money. With higher sales, your fees will likely end up being less than what you’d pay through Etsy.

But, my biggest recommendation for every shop is to do both if you’re able. Don’t try to start both at once, that will just be overwhelming. But once you have successfully opened your Etsy shop and are getting sales, go ahead and get started building your own website with Shopify as well. Or vice versa.

Having multiple shop locations will give you access to more customers and more security in case you run into trouble with one of them. Send your social media followers to your Shopify site, while snagging sales on Etsy from their customer base.

Helpful Links

Here are a few links which can help you get started selling online:

• Learn all about Etsy fees in this blog post. Plus grab my free Etsy fee calculator!
• Sign up for a new Etsy shop here and get your first 40 listings for free!
• If you’re opening a Shopify store, I highly recommend getting a custom domain name (plus email!). Learn how in this blog post. I used Google Domains and Google Workspace to get a custom business email address on a platform I know and love, plus access to all of Google’s great tools (Google Sheets, Google Drive, etc.)