Shopify vs. Amazon: Which is Better for Dropshipping Clothing in 2023
The global apparel market was valued at 1.5 trillion USD in 2021 and it is expected to grow to 2 trillion USD by the end of 2026. This clearly shows that it has an ever-growing demand for shoes and clothing and a tremendous potential for newcomers as well as for established business owners. When it comes to the luxury apparel market, it accounts for 71.90 billion USD in 2022 and it’s projected to grow by 5.41% annually until 2027. When looking at these numbers, it is apparent that becoming a luxury apparel dropshipper is a beneficial option for every business owner regardless of their size.
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As an entrepreneur that wants to tap into the dropshipping clothing market, one of the most important decisions to make is to choose the most suitable dropshipping supplier that you can work with, in the long run, such as BrandsGateway. The next biggest decision following the choice of the supplier is about the eCommerce platform you will be using. It is recommended that you pick one that is among the biggest and most reputable worldwide, so it is likely that your decision-making process will come down to Shopify or Amazon.
While both have advantages and disadvantages alike, your decision should be in line with your business needs and its characteristics. In this article, you will be introduced to the main difference between Shopify and Amazon, alongside the pros and cons of selling on each eCommerce platform.
What are the main differences between dropshipping on Shopify vs. Amazon?
The first and biggest difference might be apparent to many, but it is important to establish before we go into details. Amazon is an online marketplace that is used by over 6.4 million sellers, out of which 1.5 million are currently active. It also has a large number of monthly visitors, who viewed the marketplace over 2.7 billion times in July 2022 alone. But it is also important to keep in mind that almost 80% of this traffic came from the United States, and China ranks second with 1.9% of the traffic coming from this country. But this amount of potential traffic comes at a hefty cost you might not be able to absorb as a clothing dropshipper.
On the other hand, Shopify is a platform that allows you to have your standalone store built from scratch and you need to figure out how to drive traffic by yourself. However, this eCommerce platform gives you the opportunity to keep more profit for yourself when using it for dropshipping. This is why over 1.7 million eCommerce businesses in 175 countries worldwide are using Shopify as their main platform for selling their merchandise as of September 2021.
Due to this main difference, it is relatively hard to compare these platforms like for like. But what you can discover with a comparison of Shopify vs. Amazon is which platform meets the needs of your business. So read further and discover the pros and cons of both Shopify and Amazon in order to be able to make a more informed decision.
Pros of a Shopify-based dropshipping store
Shopify is a powerful cloud-based CMS (Content Management System) that allows dropshippers to create their own websites without any specific technical and coding knowledge. But its simplicity does not mean that Shopify is only suitable for small businesses as it is completely scalable. This makes it a perfect solution for newbies in the dropshipping clothing business who are aiming to start but then gradually grow their businesses further.
Shopify’s simple and user-friendly features allow clothing dropshipping store owners to choose from numerous professionally made Shopify web designs and store templates that are easily customizable. This can be done by the thousands of apps that Shopify Appstore aggregates. You can basically find an app for customizing and supporting any aspects of your business, such as SEO, Shopify apps for customer support, and so on.
If you are still unsure if you can build your perfect website without any external help, you can always reach out to a turnkey dropshipping website provider, such as BrandsGateway’s partner LemonDev, who will set everything up for you. Another alternative is to install BrandsGateway’s Shopify App, which will land you a hand with everything regarding the launching of your store.
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Once your store is in your hands, you will be the sole owner of it, and you can enjoy full control of its operations. Also, this way, you can ensure that you will have the opportunity to display the brands and products that you dropship in the best possible way. In the future, this will allow you to better market yourself and not only provide value to your customers through your merchandise but also through brand recognition.
Another important benefit to mention is that all Shopify websites are mobile-friendly, which is a must in today’s world since mCommerce plays a huge role in the way consumers make purchases.
When it comes to the cost of running a Shopify dropshipping store and dropshipping high-fashion items, there are two main things to look at. Namely, the cost of the store itself and the commission Shopify charges for each transaction made. Depending on the monthly plan you will choose, you could be looking at a monthly fee of owning and running your dropshipping website from 29 USD to 299 USD. Your monthly plan will also affect the commission that is charged, which can vary between 2.9% and 2.4% per transaction.
Moreover, when working together with a leading dropshipping supplier, such as BrandsGateway, and running your own website on Shopify, there are many benefits you can enjoy as opposed to using a marketplace to sell. For example, BrandsGateway provides premium dropshipping services and offers a plugin with which you can reach a high level of dropshipping automation, when it comes to uploading new products, keeping inventory levels up-to-date, order fulfillment, and tracking your customers’ purchases. This will allow you to focus more on marketing your business and your merchandise as everything else will be taken care of by your supplier.
Cons of a Shopify-based dropshipping store
As easy as this sounds, the hard part of owning a standalone Shopify dropshipping store will come when you will need to find effective ways of driving traffic to your website. This means you would have to heavily rely on your eCommerce marketing tools and ideas if you want your dropshipping store to stand out from the crowd and increase your online sales. You will also have to have a proper understanding of the best SEO practices and have content marketing ideas in order to stay competitive.
When owning a Shopify-based dropshipping store, the monthly payments that you are paying to Shopify won’t be the only thing to take into account. In order to have a working website that is credible and looks professional, you will also have to purchase a unique domain name. Also, if you want a high level of customization and additional apps to support your business and make your life easier, you will need to pay a monthly fee for the apps as well.
Pros of being a dropshipper on Amazon
When you are just starting up and you are not sure yet if you want to run a standalone store, Amazon is a great option to explore. Dropshipping on Amazon will take the weight of creating your own website off your shoulders. This can be a big advantage if you are a less tech-savvy dropshipping business owner who is not confident in setting up your own store’s website and can not afford a turnkey solution. Amazon is a straightforward platform to use and this is proven by a large number of dropshippers that are using this marketplace to dropship clothing and accessories. The only thing you will need to do is create a seller’s profile and ask your dropshipping supplier to provide you with CSV files in order to upload their products to your store.
For example, if you choose to work with BrandsGateway, you will be provided with CSV files that are updated every 3 hours. This will enable you to list products quickly and keep your stock levels up to date at all times.
Amazon will grant your store access to millions of visitors on a daily basis and expose your products to a global audience, without you having to drive your own traffic to your dropshipping store’s website. This is likely to be a big benefit for those dropshippers that are not yet familiar with the world of online marketing. Moreover, this way, your store will automatically be backed by one of the largest marketplaces’ reputations. Meaning, you can easily piggyback on Amazon, and there is no need for you to establish your own brand and credibility before being able to sell.
Amazon also offers a built-in customer service that you can utilize when dealing with unhappy customers. This help on the customer service side of the business can not only save you time but can also help you to ensure that your customers are as satisfied as possible, making it easier to turn them into loyal shoppers.
Cons of being a dropshipper on Amazon
All the benefits highlighted above make Amazon a saturated market for clothing dropshippers, which makes it harder for you as a seller to stand out. Here you do not have the option to brand your store the way you would have with a standalone website, so you may end up in a price war with your competition.
Moreover, as you do not have ownership or control over your store’s page, you are more vulnerable to external circumstances and Amazon’s changing policies. For this reason, you either must adhere to Amazon’s current rules, or you can risk your account being suspended, which might mean the end of your Amazon dropshipping career.
Although an Amazon dropshipping store does not cost as much to maintain and market as a Shopify one, it also has its drawbacks, when it comes to the amount of commission you will have to pay after each transaction. As a pro seller, which means if you are selling more than 40 units a month, you will have to pay a flat fee of 39.99 USD per month to be able to use Amazon’s platform. Also, Amazon commission fees are calculated on the total sales price (which includes shipping fees and any gift wrapping charges) and can be as low as 5% and can even shoot up to 45% depending on the product category you are selling. These charges can then quickly accumulate, and you will have to make profit calculations to see if it is still worth it for your business to use Amazon as an intermediary.
Additionally, Amazon’s rules and policies don’t allow dropshipping suppliers to offer complete automation when it comes to selling through the platform. The only option that is available for them is to send their dropshippers CSV files to bulk upload their products and update stock levels. However, this way, you will be missing out on automated order forwarding and inventory updates. In this case, you will have to complete these steps manually, which might take up a considerable amount of your time.
To sum up
It is not an easy thing to drive a straightforward conclusion when it comes to Shopify vs. Amazon. As highlighted above, they are very different platforms that require different skill sets from their users, and their pricing structure highly differs. But it is important to keep in mind that they are not mutually exclusive, and they can play as complimentary eCommerce platforms for your dropshipping business. The traffic volume you can reach on Amazon can be a great tool to drive traffic to your Shopify store. This will allow you to both reach strong sales goals and represent yourself in your own unique way. But as mentioned previously, the most important thing is for you to understand your business and set your KPIs (Key Performance Indicators) in advance, and then make the best decision for your business.
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About the Author
Fashion marketing professional turned digital marketer. My name is Lilla and I have been working in the fashion industry for 5 years. Currently working at BrandsGateway and helping with the development of the marketing strategy and on occasions writing articles for our audience. When away form the computer, I enjoy outdoors and running with my dogs.