Instagram Shop, ETSY, & Shopify: What You Need To Know

July 27, 2021
5 min read

E-commerce shopping has grown in popularity and is only going to get bigger. In fact, 50% of consumers shop more on mobile phones than in-store.


Because it’s easy.

Instagram has recently decided to try their hand in the online shopping world by adding a new feature: Instagram Shop. This allows people to easily shop different brand's photos and videos across the platform.

Three people hunched over a computer

Have questions about Instagram Shop? We’ve gotchu.

This post will..

  • Introduce you to the Instagram Shop feature
  • Highlight the benefits of setting up your own Instagram shop
  • Explain what to expect from Instagram Shop in the future

Finally, we’ll highlight two popular platforms that you can use to start your own business’s e-commerce journey — Etsy and Shopify.

What is Instagram Shop?

Many businesses turned to online shopping in order to stay afloat during the Covid-19 pandemic. Instagram wanted to cater to small businesses by making a free and easy way for them to succeed online. Thus, Instagram Shop was born.

Before Instagram Shop, using the app to buy things wasn’t easy. Instagram post captions don’t support hyperlinks, so customers had to go to the website linked in a business’s Instagram bio. Then, they had to search for the product they saw on their feed in order to purchase it.

Way too many steps, if you ask us.

Two iphones side-by-side showcasing Instagram Shop

Instagram Shop has made the process easier by allowing businesses to link directly to specific products in their Instagram posts.

Now, all a user has to do is tap the tagged product and they will be taken to a page where they can view the price and description.

If they want to buy it, the consumer will be directed to the product page on the business’s website.

Users can also save products to their ‘Wishlist’, send them to friends, and view other products from the shop.

Why Should You Set Up An Instagram Shop?

Sign in window that reads "Yes, We're Open"

70% of shoppers use Instagram for product discovery, making it an important platform for small businesses to have a presence on.

You’re likely already advertising your business on Instagram, so why not make it even easier for your customers to buy your products?

With Instagram Shop, you can link your online store directly to your posts, maximizing traffic to your website. Users who discover your business on their feed can then easily be converted into valuable customers.

The Future of Instagram Shop

Currently, users can only browse through Instagram’s Shop feature. If they wish to make a purchase, they have to navigate to the business’s linked website.

However, this might be changing soon.

Last year, Instagram rolled out a feature called Instagram Checkout in the U.S. This feature allows users to make purchases directly within the Instagram app, eliminating the need for them to be redirected to a business’s website.

Screenshot of Tweet about Instagram Shop being live

While this won’t replace your established e-commerce website, the Instagram Checkout feature will be a meaningful way to convert your audience into buying customers.

Instagram Checkout might not be for everyone, though. Instagram plans on charging transaction fees from shops that choose to use Instagram Checkout. This selling fee is currently 5% per shipment or a flat fee of $0.40 USD for shipments under $8.00 USD.

Instagram Checkout is currently not available for Canadian users, but it will likely be here in the near future, if successful.

Which E-Commerce Platform Should You Use?

Etsy vs. Shopify

Haven’t started an e-commerce website for your business yet? No problem!

It’s easier than ever to open up your own online shop right now.


It might not be so easy to decide which platform to use for your e-commerce site.

Two of the largest e-commerce platforms right now are Etsy and Shopify. Both have their own advantages and disadvantages, which we will briefly explain here to help make your decision easier.

Shopify and Etsy logos side-by-side

Platform #1: Etsy

Etsy is a fantastic option for newer businesses looking to grow their customer base.

Etsy is a virtual marketplace for vendors to sell handmade or vintage goods and other supplies. Consumers can use the search feature to browse for specific items, maximizing their chances of discovering your business’s page.

Similar to Instagram Checkout, Etsy charges three basic selling fees:

  • $0.25 CAD to publish a listing (a listing lasts 4 months or until the item is sold)
  • 5% transaction fee on the sale price, including delivery
  • 3–4% + $0.25 for payments accepted through Etsy Payments (Etsy Payments is not a required feature)

These fees can be worth it for growing businesses because Etsy handles much of the marketing and promotion for you. Etsy also offer optional monthly plans to run promotional ads across the website.

Person on laptop holding their credit card

Etsy Pros: In 2020, there were about 81.9 million active Etsy buyers who made at least 1 purchase in the year. That means running an Etsy shop greatly increases your chances of exposure, especially internationally.

Etsy Cons: The main disadvantage of running a shop on Etsy is the lack of creative control and brand independence. You can upload your own display picture and header, but the layout and design of your shop will have to adhere to the Etsy brand.

Platform #2: Shopify

Where Etsy is a virtual marketplace, Shopify offers your business its own independent webstore. This webstore comes along with some of the best e-commerce tools available.

Shopify Features include:

  • Shopify Payments
  • Stock management tools
  • Abandoned cart recovery
  • Discount codes, and more.
IPhone open to payment screen on Shopify

Shopify also grants a lot more freedom with your webstore in comparison to Etsy. There are no restrictions to what you can sell, you can customize your webstore’s design and layout to reflect your brand, and you can have a custom domain.

This freedom does come at a price, though. Shopify has five pricing plans:

  • Shopify Lite ($9 USD/month) is a basic plan that lets you sell products from your own website or blog
  • Basic Shopify ($29 USD/month) is recommended for new e-commerce businesses. Includes a Shopify website, two employee accounts, and the ability to use discount codes
  • Shopify ($79 USD/month) has all the features of Basic Shopify, plus three more employee accounts and the use of gift cards. This is perfect for growing businesses.
  • Advanced Shopify ($299 USD/month) is best for scaling up your sales potential with fifteen employee accounts and advanced reporting capabilities.
  • Shopify Plus (quote-based) is meant for high-volume businesses and is designed according to your business’s needs.

On top of your monthly fees, Shopify also charges transaction fees that start at 2.9% + $0.30 CAD. These fees reduce with each upgraded monthly plan.

Fortunately, you can try out Shopify for free with its 14-day trial and then pick a plan later.

Shopify Cons: The largest disadvantage in comparison to Etsy is the lack of exposure and promotion. Shopify doesn’t have a search engine tool like Etsy. Customers have to find your store organically, which means you have to be prepared to manage your own advertising and marketing initiatives.

Curly haired girl sitting on floor on laptop

The Best Choice For You

Deciding whether Etsy or Shopify is right for you will depend on your business. Both platforms offer features that can be valuable depending on your needs as a brand.

If you are just starting out as an e-commerce shop, Etsy may be a good asset in reaching more customers with its simpler features and inexpensive fees.

Meanwhile, Shopify provides powerful e-commerce tools that can help you scale your business if you already have an established audience or are able to manage all of your own marketing.

Whichever platform you choose, both can easily be linked to Instagram Shop to streamline the shopping experience of your audience.

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Spark & Pony is a creative marketing agency dedicated to making custom marketing solutions for small businesses. Follow us on Instagram for more social media tips!

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