If you want to set up an online store to sell handmade items, for instance, it’s important to weigh up your options for doing so. Here, we compare e-commerce platform Shopify against marketplace Etsy.
Main features
The key difference between Shopify and Etsy is that Shopify is an e-commerce platform, while Etsy is a marketplace.
In other words, Shopify enables you to build and manage your own online store under your own brand, where you sell only your own products. Etsy, by contrast, requires you to set up a seller account and then list your products to be sold alongside millions of others, giving you access to an existing pool of customers.
Etsy handles most of the infrastructure for you, including payment processing and security. This makes it pretty easy to get up and running, but the downside is competition can be intense and you will be tied to Etsy’s platform rules and branding.
Shopify, on the other hand, lets you customise your online store, allowing you to take control of the design and marketing. However, it’s also up to you to drive customers to the site. Shopify offers a range of payment options and allows you to manage and track inventory and orders from the dashboard.
Setup speed
Etsy’s setup process is pretty fast, and you can usually create an account and list products within a few hours, particularly if you have product descriptions and photos ready to upload.
The process is a little different with Shopify, although it’s still pretty efficient. You can typically get a basic storefront ready within a few days, with basic branding and a few live products. However, if you want a fully functional, customised store with a greater selection of products and better branding, this will typically take 1 to 4 weeks.
Pricing and fees
Shopify has a monthly subscription model, so you’ll need to pay a fee each month to keep your online store up and running. The Basic plan is the cheapest option and starts at £25 a month, or £19 a month if you pay annually. There are 3 other plans but these are aimed at more complex businesses and cost a lot more.
Shopify Payments also charges a fee for processing each payment, while if you use a third-party provider, additional platform fees can apply.
Etsy charges a number of different fees, including:
Listing fee of 15p per item
Transaction fee of 6.5%, charged whenever you sell an item
Payment processing fee of 4% plus 20p
Offsite ads fee of 15% if you make a sale from an advert
Currency conversion fee of 2.5%
Selling internationally
Shopify offers Shopify Markets which makes it easy to sell to multiple markets from one store, allowing for customised pricing, languages and product availability. In addition, Shopify Payments enables multi-currency checkout so customers can pay in their local currency while you receive funds in your designated payout currency.
As Etsy is a global marketplace, you can also sell your items internationally. Simply create your profiles and select which countries you want to ship to, then set custom rates for each region. Etsy’s calculated shipping feature automatically pulls exact postage rates based on the buyer’s location and package weight.
Overall
Choosing between Shopify and Etsy will ultimately depend on whether you want to run your own online shop, with your own branding and designs, but drum up your own customers, or whether you’d prefer to sell your items through an established marketplace with built-in traffic, alongside thousands of other sellers, in exchange for less control over branding.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Defaqto. In other cases, Finder has sourced data directly from providers.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time.
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