Cookies Preferences
This guide compares Etsy's marketplace approach against Shopify's owned-platform model, examining costs, marketing tools, and scalability to help you choose the right ecommerce solution for your business.
In Q1 of 2025, the eCommerce platform Etsy lost 1.4 million sellers, dropping from 7 million to 5.6 million. A favourite amongst hobbyists and side hustlers, Etsy has been a stalwart of eCommerce since its launch in 2005.
The loss of sellers was for a myriad of reasons, including Etsy cracking down on what goods can be sold on its platforms, but one close to our hearts is the growing trend for brands to migrate from generic marketplaces like Etsy or Amazon to owned platforms like Shopify.
The move presents merchants with an opportunity to own their branding and make more sales with greater control over customer data and powerful marketing tools.
If this is a move you’re looking to make, read on as we dive into how the two ecommerce platforms stack up.
Etsy is an online ecommerce marketplace that allows merchants to connect with buyers in a marketplace like format. Whilst the most common Etsy stores will list unique, handmade, or vintage items, there’s few limits to the shape an Etsy storefront can actually take. Be it a fashion brand, tech, or something entirely different - you can make an Etsy storefront regardless of what product you’re actually selling.
Etsy as a company operates by allowing sellers to create personal storefronts where they can list their products for a fee of $0.20 per item and taking a 6.25% fee on every transaction made. Outside of this there’s a 3% transaction fee and opportunities to market your brand on the platform, but otherwise it’s a low cost option for budding sellers.
Shopify is a comprehensive ecommerce platform that enables businesses and entrepreneurs to start, grow, and manage their businesses by unifying all aspects of eCommerce onto a single platform. Shopify is home to a vast range of different businesses. In fact, just as small businesses making less than 5 figures a year call Shopify home, so too do enterprise brands like Kylie Cosmetics & Gymshark.
Shopify has become well known for its versatility, its scalability, and how the company behind the platform has sought to innovate in other areas of running an eCommerce business, such as their point of sale offering and more.
Whilst Etsy and Shopify can play a similar role for small brands, the benefits of the two platforms are entirely different.
Etsy offers artisans and hobbyists a number of key benefits, which have made it the go to choice for over 8 million sellers.
One of the main benefits of selling on platforms like Amazon & Etsy is that many users begin their search for products on the platform. Etsy provides access to over 96 million active buyers who are specifically interested in the kind of products the platform sells, making it easy for customers to find products. There’s minimal need for outside marketing - although that will help your store -
The Etsy platform is built to be extremely user-friendly, allowing sellers to quickly set up their shops and start listing items with minimal technical knowledge.
With no required monthly subscription fees (although there is Etsy plus, which we aren’t touching on here), running an etsy store front is a relatively investment free way to run a business online. Listing an item only costs $0.20 (regardless of if it sells or not), but from there, Etsy sellers can start making money easily.
An anecdotal one, yes, but one still worth noting. We find that, even with an increasingly floundering customer base, that customers are trusting of Etsy as a platform. Sometimes it can be difficult to trust a website you’ve never heard of before, but customers can rely on Etsy’s customer service if they encounter problems with orders. You can also easily see reviews, how many sales the shop has had, and the shop’s location making it easier for customers to make a decision.
These benefits make Etsy a compelling platform for sellers, especially those just starting out or for those looking to reach a wider audience for their products.
Many Etsy sellers report some common frustrations with the Etsy platform, which may influence whether it’s the route you want to go down for your online store.
Whilst there’s no set monthly subscription fee, Etsy balances this out with extremely high transaction costs in comparison to other platforms.
Here’s an example.
Let’s say you make a sale worth £48 with £2 shipping costs - on no ecommerce platform would you receive the full £50, but heres how it stacks up on Etsy.
You'll pay a transaction fee of 6.25% of the item total (£3) and 6.5% of the postage total (£0.13), a processing fee which is 4% + £0.20 of total order (£2.12), a Regulatory Operating fee of 0.32% (£0.15), plus a listing fee per item of £0.20, if you have auto-renewal on. VAT is then paid on all the listing, processing, transaction and operating fees at 20%, which is an additional £1.08. So if we add all those together, you will pay a total of £6.48 which is around 15% of your total order (including the postage), and receive £43.52 from the order.
Depending on how much it cost to create the item, this may not be the level of profit you hoped for.
Whilst we just spoke about the benefit of product discovery on Etsy, the one drawback many sellers encounter is that, whilst the opportunity is there - the reality is there are too many sellers vying for the attention of customers. Just type in anything into Etsy search and you get thousands upon thousands of results. So sometimes it may feel like being a needle in a haystack. And from a customer's perspective, they may not have the time to look through that many products before finding yours.
Although an entirely different platform, Shopify has a similar stack of benefits to Etsy.
Many Etsy sellers may have already dipped their toe into using Shopify with Shopify’s point of sale system. The point of sale system allows merchants to take their online business into the real world be it at a pop up or market stall. Indeed, this is representative of Shopify’s wider methodology - to be an all-in-one platform for website building, multichannel selling, payment processing, and store management.
Shopify offers powerful, detailed insights, and reporting tools to track store performance and make data-driven decisions. This, in addition to Shopify’s built in marketing tools and automations, means that merchants have all the tools they need to grow with their business. From setting up email campaigns to making your site SEO friendly.
Etsy may edge Shopify out in this department, but Shopify is still one of the most easy to use eCommerce platforms for merchants who are new to selling their products on their own platform.
The thought of setting up a website may strike fear in the hearts of the inexperienced, but Shopify is much easier of a platform to set up than sites like wordpress, where many may have been overwhelmed by the technical know-how that’s needed.
These benefits make Shopify a versatile and powerful solution for businesses of all sizes looking to establish and grow their online presence in the competitive eCommerce landscape. But there are some drawbacks to consider too.
Like Etsy, Shopify has a number of drawbacks that may dissuade customers from using the platform.
If you’re looking to take your business full time, this might not be much of an issue to you, but if making fun products and selling them online is just something you enjoy doing to supplement your income or as a hobby, than the level of marketing that’s required to get enough footfall through your Shopify site to make sales, might put you off.
Unlike Etsy, which acts as a marketplace for product discovery, Shopify does not have a centralised product discovery list. Customers will have to find your brand through external means - usually social media or Google search. For dedicated eCommerce brands this is a non negotiable time investment, but for smaller brands, it might not be what you signed up for.
If we’re looking at raw numbers, Shopify costs more than Etsy. In fact, it’s not even close.
Even as Shopify offers a free trial in your first month, once a merchant has an account up and running they are going to be charged at least £19 a month, if they’re on Shopify’s lowest cost plan.
Whilst Shopify may not charge to list products, unless an Etsy merchant is looking to list 100+ products in a month, they won’t have to pay anywhere near the upright fees that Shopify charges.
On the flip side though, Shopify takes a significantly smaller percentage of any sale than Etsy does. Where Etsy sellers can lose around 15% of any order in fees, Shopify only takes a 2% fee on its least expensive plan (and this can be as small as 0.5% on its most expensive plans). Adding in payment processing and more still mean merchants take home at least 95% of every sale made
Meaning that if the same £100 product was sold by two identical merchants, but one ran their business on Etsy and the other on Shopify, the Etsy merchant would make roughly £85, and the Shopify merchant would make roughly £95. A discrepancy that will certainly be felt with higher price point items.
This is a bit more of a more nuanced conversation. As Etsy and Shopify offer different marketing approaches and tools, each catering to their unique business models and target audiences.
Etsy categories can frequently be found amongst Google’s top search results, with Etsy even including products in Google Ads free of charge for merchants (although they will lose an additional 15% of an order if a sale is made), allowing for buyers to discover a seller’s products with ease. Beyond this Etsy allows for search optimisation within itself as a platform, further allowing for product discovery.
Shopify, on the other hand, allows for a merchant to optimise every possible touchpoint of their website for SEO, including meta titles, descriptions, and so on. But - as you can likely infer - this requires much more work from the merchant.
As a marketplace platform, Etsy presents limited customisation options to users. Simply allowing them to customise their profile picture, header banner, and product imager much like you would on a social media platform. The primary branding is focused on upholding the ecosystem’s aesthetic, which, at the very least, is premium.
Shopify allows users more extensive customisation options for marketing materials and store design, allowing for stronger brand identity. Merchants have the option to use a preexisting Shopify theme - a template built with best practice in mind - or to build a theme from scratch with custom code if they wish. Although this is yet another time investment.
Etsy Allows sellers to run ads within the Etsy marketplace, much like how you may boost a post on Instagram or Facebook. Similarly, Etsy as a platform runs ads for select products on external platforms too, in exchange for a percentage of the sellers profits. Plus, Etsy has an easy social media integration to enable the sharing of product ads directly from the Storefront.
Shopify also has its own stack of both native and third party marketing tools, allowing merchants to improve their email marketing, social media advertising, and SEO. Beyond this Shopify has tools for abandoned cart recovery, and customer segmentation, which third party tools like Klaviyo can build on further.
As mentioned before, Shopify and Etsy are both regarded as one of the easier to use platforms within their specific product niche. Etsy, a marketplace for merchants to list their products, and Shopify, an owned eCommerce platform. However running an owned eCommerce platform is typically regarded as “Harder” regardless of which platform we’re talking about.
In terms of getting set up and selling - Etsy sellers can get started with so little as 20 U.S cents and a Facebook account, whereas Shopify requires a bit more work to get started. Users will have to choose a payment plan, set up a store, list products, and make marketing optimisations before they can expect a sale to be made.
Choosing the right platform for your online store is one of the most critical decisions an eCommerce merchant can make in the building of their eCommerce business. But this is a question that applies less so to conversations comparing Etsy and Shopify than it does to conversations comparing Shopify to other eCommerce platforms, as the platforms just aren’t easy to compare
If you ask us, Shopify is certainly the more powerful of the two platforms. It allows merchants to fully scale their business, build whatever kind of website that they want, and take full ownership of every touchpoint.
Etsy was never designed to do that, and it doesn’t cater to the kind of customer that wants all of that customization as a result. Etsy provides a simple platform for hobbyists to sell their products, and is more dependent on product quality and niche fulfilment than the marketing reliance of Shopify.
Additionally, it’s not a rare scenario for brands to simultaneously run Shopify & Etsy storefronts at the same time. As before, Etsy is a very cost effective solution, and some brands may choose to make a start on Etsy to see if customers are interested in what they have to offer, before moving on to Shopify when they have proof that there’s a demand.
And many of the brands in this situation keep their Etsy store up and running after the fact.
Let’s look at a real life example
Arrow Gift Co. is an independent seller of gift cards and other gifting products. Initially establishing their business on Etsy, Arrow Gift Co. were looking to build upon their success by establishing a stronger brand presence on Shopify.
With the assistance of industry leading Shopify Plus Partner, Cake Agency (that’s us by the way) Arrow Gift Co were able to launch their new Shopify site, and saw month on month increases in sales for a consecutive six months.
Despite the success of their new Shopify store, Arrow Gift Co. were making plenty of sales through Etsy, and kept their presence going on the platform the whole time.
If you’re looking to easily sell products online with little interest beyond the product development process, then Etsy is the route for you. But if you’re looking to grow your business with powerful marketing tools, creating a truly branded experience, and building a devout follower base, then Shopify is the right place.
If you have any questions about how to build a Shopify website, we’d love to hear from you, Let’s Talk
