Selling on Amazon vs. Your Own Online Store

Amazon vs. your own store: two different businesses, not two channels for the same one

Selling on Amazon and running your own online store aren't really the same activity with different storefronts — they're different businesses with different economics, different risks, and different long-term value. Most sellers eventually use both, but understanding what each one actually gives you (and takes away) matters before you decide where to put your effort first.

What Amazon gives you

The single biggest thing Amazon offers is traffic you didn't have to build. Shoppers are already there, already have payment methods saved, and already trust the checkout process. For a new product with no existing audience, that's a massive head start compared to building a store from zero and driving traffic to it yourself.

Amazon also handles a lot of operational complexity if you use Fulfillment by Amazon (FBA) — storage, packing, shipping, and customer service for returns all get outsourced to Amazon's infrastructure. For a small operation without warehouse space or fulfillment staff, that's a real advantage.

The cost of that convenience is significant. Amazon takes referral fees (typically a percentage of the sale price that varies by category) plus FBA fulfillment fees if you use their warehouse network, and those add up to a meaningful cut of revenue before you've paid for the product itself. You're also competing directly against other sellers of similar or identical products on the same page, sometimes including Amazon's own private-label products in your category. Price competition on Amazon is intense, and it's common to see margins compressed to the point where profitability depends entirely on volume.

Perhaps the biggest structural cost is that you don't own the customer relationship. Amazon controls the customer data, the communication, and the post-purchase relationship. You can't easily email past buyers about a new product, build a loyalty program, or retarget them with ads the way you can when someone buys directly from your own site. Every sale is essentially a one-time transaction from Amazon's system, not a relationship you're building.

What your own store gives you

Running your own store — on Shopify, WooCommerce, or a custom build — means you keep the customer relationship. You get their email address, you can market to them again, you can build a brand rather than just move product. Over time, repeat purchases and referrals from an owned audience tend to be far more profitable than one-off Amazon sales, because you're not paying a platform fee on the second, third, and fourth purchase from the same customer.

You also control pricing, presentation, and the full customer experience — no fighting for the buy box, no risk of a competitor hijacking your product listing, and no algorithm deciding whether your product gets shown. Margins are generally healthier since you're not paying Amazon's referral and fulfillment fees, even after accounting for payment processing costs (see our Stripe vs. Square vs. PayPal comparison for a sense of what that actually costs).

The cost of independence is that you have to generate your own traffic. Nobody is browsing your store the way they browse Amazon's category pages. That means SEO, paid ads, social media, and email marketing all become your responsibility, and none of them are free or instant. A new store with a great product but no marketing plan behind it can sit with zero sales for months, which is a very different risk profile than listing on a marketplace where buyers already exist.

The realistic answer: most sellers need both

Very few successful e-commerce businesses pick one exclusively. A common pattern is using Amazon as a discovery and volume channel while building your own store as the place where you capture emails, build a brand, and grow the higher-margin, repeat-customer side of the business. Amazon can even be a customer acquisition tool if you're deliberate about it — packaging inserts that point new buyers to your own site or loyalty program, for instance, within Amazon's policy limits.

The mistake to avoid is treating Amazon as your only channel long-term. If Amazon ever suspends your account, changes its fee structure, or a competitor undercuts your listing, a business with no owned traffic or customer list has no fallback. A business that has built even a modest direct-to-consumer presence alongside Amazon has somewhere to land.

Which to prioritize first

If you're launching a genuinely new product with no existing audience, Amazon can get you sales and reviews faster than building a store from scratch and driving cold traffic to it. If you already have some audience — social following, email list, local reputation — your own store will likely convert that audience more profitably than sending them to a marketplace listing where they might buy a competitor's product instead.

FAQ

Can I sell on Amazon and have my own store at the same time?

Yes, and it's the most common approach for serious sellers — many businesses use Amazon for reach and volume while building their own store for margin and customer relationships. There's no exclusivity requirement from Amazon that prevents this.

What percentage of a sale does Amazon actually take?

Amazon's referral fees vary by product category and FBA fulfillment fees vary by product size and weight, so there's no single fixed percentage — check Amazon's current seller fee schedule for your specific category rather than relying on a general estimate.

Is it cheaper to sell on my own store than on Amazon?

Per-sale, generally yes, since you avoid Amazon's referral and fulfillment fees, though you take on the cost of driving your own traffic through ads, SEO, or marketing that Amazon doesn't require.

Do I need FBA to sell on Amazon?

No, you can fulfill orders yourself (Fulfilled by Merchant), which avoids FBA storage and fulfillment fees but means you handle shipping, storage, and returns yourself, and you may lose eligibility for Amazon Prime badging on your listings.

Which is better for building a long-term brand?

Your own store is generally better for brand-building since you control the design, messaging, and customer relationship, while Amazon listings are constrained to Amazon's format and don't let you build the kind of direct connection an owned store can.