If you want to become an online seller, there’s definitely no shortage of choices in terms of where you can sell products. But today, we’re going to focus on two of the leading online marketplaces, it’s Amazon vs eBay.
These two sites have been around much longer than the rest, so it’s only natural for you to consider using both.
In this review, I will be focusing on key areas that potential sellers should look at before deciding on either marketplace.
Amazon vs eBay: The Basics
Here are some of the basics to get us started.
- Monthly Users: 2.01 billion in February 2020 (Statista)
- Total Sellers: 8.5 million (Marketplace Pulse)
- Market Share: 44% (Finance.Yahoo.com)
- Monthly Fee: $39.99
- Business Model: Fixed-price
- Monthly Users: Estimated 109.4 million (Statista)
- Total Sellers: 25 million (oberlo)
- Market Share: 5% (Finance.Yahoo.com)
- Monthly Fee: 10% per sale
- Business Model: Auction style & Fixed Price
Over the past decade Amazon has grown and grown in popularity. Amazon’s market share is a whopping 44% compared to eBay’s 5%. I still believe that there is an opportunity on both platforms, we are going to need to dive in further.
Amazon vs eBay: Where to Start Selling
As a seller myself, I decided to compare some of the aspects that I could consider when deciding between these two platforms.
Business Model
While Amazon lists products at a fixed price, most eBay sellers list their products auction style.
The buyer with the highest bid wins when the time runs outs.
As you can imagine, an auction-style business model is a little less reliable, it means you can’t always predict what’s going to happen to your bottom line every month.
Selling your products at a fixed price, on the other hand, gives you a better idea of potential profits.
How you market your products naturally plays a role but overall, if it’s reliability you’re after, Amazon is a better bet.
It should be said that you can of course list items on eBay at a fixed price, it’s just not as common.
Fees
Those all-important fees – how do these two platforms weigh up? If you want to run a successful eCommerce business, you need to know what it’s going to cost you every month.
Fees eat into your profits, so it’s important to know what you’re getting yourself into.
eBay takes 10% of the final fee for most items but this can differ based on the product you’re selling. Sellers can list up to 50 items at no cost, thereafter, it’s $0.35 per listing.
Amazon charges $39.99 per month for a professional selling plan. There is no cost per listing but there are additional fees for each sale. How you choose to fulfill your orders also makes a difference.
Amazon will charge you a referral fee for every product sold on the site, this depends on the product type and category it is within.
You will find a detailed breakdown of what it costs to sell on Amazon here.
Seller Tools
Both Amazon and eBay offer a selection of tools to sellers within the platform.
Amazon sellers can access business reports, sales, and traffic insights, and listing promotion tools.
Probably one of the best tools that Amazon offers is FBA, which is Fulfillment by Amazon. This gives sellers the opportunity to hand the picking, packing, shipping, and customer service over to Amazon instead of handling it themselves – big time saver!
To be honest i think that the Amazon’s prime shipping service is what has put them streaks ahead of eBay in terms of market share.
eBay also has a decent selection of tools that help sellers create, manage, and promote listings but you’ll need to handle any inventory management and customer service yourself.
There are also a number of third-party seller tools that are linked to both platforms, so regardless of the marketplace you choose, you will have access to the right tools.
Although we have sold a fair few products through eBay the majority of our experience has been on Amazon. With eBay we’ve never invested in any paid seller tools, although with Amazon there are a few we couldn’t be without.
Sales Opportunities
Amazon has A LOT more users and a much larger market share.
On Amazon you’ll also be competing with far less sellers than you would on eBay. That doesn’t mean that it isn’t competitive, if you want to compete on Amazon you have to find the right product opportunities (The video below shows one method we use).
In the same breath, many of eBay’s sellers are people selling off items from their garages.
As an Amazon seller, you’re going to need a sound strategy if you want to compete against other successful sellers.
In terms of customers, there are also some differences. eBay customers are definitely more price-conscious (in my opinion), whereas Amazon customers tend to value quality more than they do price.
The types of products you’re looking to sell will tell you which of these platforms is a better fit for you.
There’s also Amazon Prime… The fact that customers are willing to pay for a membership says a lot about the service they are offered.
The Customer Experience
Consumers love the convenience of being able to shop online, but nowadays shopping online is old news…
The customer experience is the most important part of the equation.
In my eyes Amazon offer a wildly better consumer experience, want a refund? Just ask…
Want your item delivered tomorrow? No problem…
Currently eBay can’t compete with Amazon’s level of customer obsession.
Both Amazon and eBay have been around since the 90s, so they’re both established – that’s not where the issue is
Consumers pay attention to a lot more than you realize. A brand’s vision and values do play a role. A consumer report by Jungle Scout showed that over 70% of consumers said Amazon was a good brand for buyers.
The ability to return goods without much fuss is important to consumers. Amazon is very well known for their hassle-free refund/returns policy. eBay, on the other hand, is known to be a little ‘stickier’ about refunds and returns.
In my eyes it’s simple, the less friction there is for a customer the better and Amazon have understood this from the beginning.
Naturally, as a business owner, you don’t want to lose too much money via refunds. However, customers are less willing to trust a seller that doesn’t offer returns at all.
In the long term it’s all about building your brand, in our Amazon business we offer refunds and replacement products for ANY customers that aren’t happy.
Yes maybe in the short term some consumers will take advantage but in the long term we are building trust with our best customers.
By selling on Amazon you can benefit from the strength of their brand…
Shoppers know and trust Amazon.
Most shoppers won’t know if they are buying from you (A third party seller) or from Amazon directly, that is the beauty of it.
Order Fulfillment
Your chosen fulfillment strategy will have a huge impact on your day to day work life.
If you go with eBay, be prepared to be more hands-on, meaning you will need to pack and ship orders yourself.
Amazon gives sellers a DIY option (FBM) as well as the option to hand fulfillment over to them (FBA). There are fees involved but most sellers will tell you that those fees are worth it.
Amazon gives you the option to spend more time growing your business with FBA you don’t have to take on staff to assist with fulfillment, they do it all for you.
For us this made A LOT of sense, when we started our Amazon business we were all working in full time 9 – 5 jobs.
If you go with the Fulfillment by Amazon (FBA) option, Amazon takes care of the product stroage, picking, packing and shipping.
What’s more, they will even handle returns and refunds, which can be a major time-consuming process!
As an FBA seller, you will also benefit from Amazon Prime. This is a paid subscription that buyers can sign up for that includes sales and delivery perks.
Amazon Prime members are loyal and will automatically buy from Amazon instead of eBay.
For us this made Amazon a no brainer, we needed a business model that handled the fulfillment side of our business.
Payment Speed
As a business owner, how quickly money will appear in your bank account should be a key consideration.
When someone buys from you on eBay, you get paid right away…
Amazon only pays sellers once the buyer pays and the item has shipped.
There is also a two-week holding period for all funds, so you will need to have a buffer for the first month or two until you have a steady flow of income.
Advertising Costs
If you want your listings to appear in prominent positions right away, you’re going to need to budget for paid advertising…
The alternative to this is of course organic rankings, our paid and organic ranking strategy goes hand in hand.
When it comes to paid advertising how much should you budget for in terms of advertising and which platform offers the most benefits.
Amazon offers several paid advertising options, this is referred to as Amazon Pay Per Click Advertising (PPC).
With PPC you have three main options:
- Sponsored Product Ads (Auto or Manual Targetting)
- Sponsored Brand Ads
- Sponsored Display Ads
If you are looking for a useful guide to Amazon PPC, read this.
All advertising works on a pay-per-click basis, so you need to decide how much you want to spend.
Your cost per click will completely depend on the product and the keyword, the more competition… the higher the cost.
eBay’s promoted listings also work on a pay-per-click basis but they work slightly differently.
This article explains all you need to know about paid advertising on eBay.
While advertising is a useful way to get more sales, i’d recommend that you take the time optimize your listings. Unless you have huge profit margins the long term aim should be organic sales.
Product Categories
In terms of product categories, Amazon dominates across the board.
You can sell almost anything on Amazon.
While eBay does have a number of product categories, I have found that they are still best know for electronics, used items and motors.
If you want to go down the used route, eBay is your best bet…
Looking to sell new items? Amazon will generally produce better results for you.
Seller Limitations
Lastly, let’s look at some of the restrictions that these marketplaces impose on sellers.
If you’re a new seller on eBay, you will have a monthly limit of 10 items or $500 in sales.
You’ll have to build trust with their consumers before you’re cleared for larger volumes.
This is how eBay protects customers from illegitimate sellers.
I’d also recommend looking at their list of prohibited and restricted items before you sign up.
Amazon’s restrictions are quite extensive – they want to ensure that compliant, safe products are long through their platform.
Their strict rules are in place to protect the end user, this all revolves around their customer obsession mantra.
Amazon can pull your listing at any time, as a private label seller you’d be responsible for the safety of your products.
All sellers much hold public liability insurance, this is part of Amazons terms of service.
I also wouldn’t recommend making any false claims about the benefits of your products, you won’t trick Amazon for long.
Here is a list of products that are restricted on the Amazon marketplace.
Amazon vs eBay: A Look at Some Alternatives
Amazon and eBay are definitely two of the most well-known online marketplaces, but there a couple alternatives too.
My favorite alternative? Probably Etsy! It offers a huge opportunity for anyone with the right kind of products.
- Etsy. If you’re looking to sell unique, vintage or handcrafted goods, Etsy is a great marketplace to be. However, sellers do need to meet some specific criteria and follow Etsy’s rules to be able to sell. Etsy is an ideal platform if you’re more of a small-scale merchant. If you haven’t got your own audience Etsy is a great alternative to Shopify.
- Rakuten. Consider Rakuten the Asian Amazon. It’s pretty easy to get set up, but their fees are known to be relatively high and the sales numbers, most say are unimpressive.
- AliExpress. This is another sizeable online marketplace that specialises in a wide variety of products. It’s popular amongst sellers who want to adopt the dropshipping business model. You can read my full review on this here.
- uBid. I can’t honestly say I’ve heard a lot of positive reviews about uBid. The platform also uses an auction-style model but based on reviews from customers, not many people trust the platform.
Amazon vs eBay – Which Is Right For You?
Now that you have a clearer idea of the key differences between the two platforms, you should be able to decide which model suits you better.
For me personally when it comes to Amazon vs ebay i’d go with Amazon all day long…
But this isn’t about me, it’s about you!
I actually know one particular seller that looks to be having huge success leveraging both Amazon and eBay.
From what i can see it suits him because he has his own warehouse and fulfillment team!
This means that he has the capacity to pick, pack and send out both Amazon & eBay orders. With Amazon he also takes advantage of the FBA program, some of his products are stored inside Amazon but not all of them!
I’ve always had admiration for the diversity of his business model!
Anyway, hopefully you’ve found this article useful!
You might also want to read through my top 7 methods for making money on Amazon.
Tags: Amazon, ebay
