These two titans of online shopping still reign supreme. But which marketplace is truly the best for your e-commerce strategy? Let’s take a look at the pros and cons of Amazon vs eBay which will truly
Amazon was the most-visited e-commerce site in the world in 2017, followed by eBay.
While there are a growing number of marketplaces available to new sellers, these two titans of online shopping still stand head and shoulders above the rest. But which marketplace is truly the best? Or can you choose just one? Let’s take a look at the pros and cons of Amazon vs eBay, so you can make educated choices when it comes to deciding which one to sell on and when.
Selling on Amazon: pros
Massive reach and high conversion rates
With over 300 million customer accounts, 200 million visitors a month and around 2 million sellers, there’s no question that this lucrative marketplace is full of potential for any e-commerce business with the right approach.
Seventy-two percent of consumers said they search Amazon to find product information before making a purchase and 56% use it as their starting point over Google. So listing your products on Amazon will allow you to reach millions of bargain-hungry buyers who are at the right stage in their buyer journey.
Not only does Amazon offer huge reach for online sellers, but because the company built its brand on delivering a customer-focused experience, consumers trust the marketplace like no other.
This strong loyalty is reflected in its above average conversion rates of 13 percent for non-Prime members and 74 percent among Prime members. That offers a whole lot more revenue potential than the average conversion rate of 3.32% for standard e-commerce websites.
Amazon offers “individual” and “professional” accounts. With regards to fees, sellers with either account will pay a percentage of each sale to Amazon. This ranges from 8 percent to 25 percent, depending on the item category. Professional accounts cost $39.99 per month on top of this. Individual accounts are free to operate, but require an additional flat rate of $1 per item sold, so anyone selling more than 40 products per month would benefit from a professional membership.
Access to world class fulfillment
Fulfillment by Amazon (FBA) is a popular service in which Amazon picks, packs, ships and provides customer support for orders. Plus, FBA products are eligible for free shipping on qualifying orders. This is really appealing for online sellers dealing with stores on multiple platforms.
Professional sellers can also sign up for an Amazon Business account, which provides a platform to reach business-only customers, separate to the standard consumer-facing marketplace, without incurring additional fees or charges.
Selling on Amazon: cons
Amazon is a competitive marketplace, with 537 million product listings in 2017 and growing consistently year-over-year.
More and more large brands including Bose and Nike are now selling directly on the marketplace and it also has a strong network of successful private-label brands.
The Buy Box is where 82 percent of the Amazon’s sales happen—and deciphering the mysterious algorithm that picks the winner has become one of the biggest battlegrounds in e-commerce.
Amazon doesn’t disclose exactly what a seller needs to do to win the Buy Box, but it has said its algorithm is designed to choose whoever will offer the best shopping experience, based on variables such as pricing, availability, fulfillment and customer service.
Amazon may provide immense consumer reach, but simply listing a product and waiting for it to sell is a recipe for failure on this saturated marketplace.
Amazon’s search algorithm is becoming increasingly sophisticated, not only to cater to an increasing volume of search queries, but also to ensure its results include the right products.
The bottom line is that Amazon’s stiff competition only leaves room for professional sellers who are willing to spend time and resources to get their products found and drive sales with positive reviews and a great customer experience.
Stringent performance metrics
As any online seller would know, Amazon has a lot of strict rules that must be abided by. These restrictions enable Amazon to provide the best possible experience for their buyers.
For instance, Amazon’s A-to-Z guarantee was created to handle situations where a customer either never received a product or received one that was materially different from what was ordered or expected.
Amazon also monitors the customer service performance metrics of all its sellers through an Account Health Board. This determines how well a seller is doing with regards to customer satisfaction. Order defect rate, cancellation rate, late shipment rate, valid tracking rate, customer service dissatisfaction rate are a few of the factors that sellers are evaluated against.
Turn a blind eye to any of these guidelines and your account will be at risk of suspension.
Limited brand ownership
Building a well-known brand on Amazon is achievable, but it is more difficult. Amazon reduces the amount of awareness your brand gets by making consumers feel like they are buying directly from Amazon.This is especially true for FBA sellers because items are shipped directly from Amazon’s warehouses.
Selling on eBay: pros
eBay has roughly 167 million active users as well as 25 million sellers, and while it’s well-known as an auction site, over 80 percent of eBay merchandise is new and sold at a fixed price. However, unlike Amazon, eBay doesn’t require that a product be on a listing page before being sold. This opens up the marketplace to more niche sellers, which allows for greater product variety.
On average, sellers on eBay retain 5.13% more profit than their Amazon counterparts.
The fees for listing and selling on eBay vary depending on item category, and include a flat fee of $0.30 per listing and a final value fee (a percentage of each sale) which is 10% for most product categories, compared with 15% on Amazon. eBay is cheaper than Amazon–but for smaller sellers in particular, a significant advantage is that eBay allows 50 zero insertion fee listings per month.
Perception of reviews as more trustworthy
Amazon has come under scrutiny for its once liberal attitude toward how sellers generated reviews, leading to more stringent regulations in recent months. However, due to the number of incentivized reviews that remain on the platform from old practices, buyers are still cautious about trusting all reviews as genuine.
eBay does not allow customers to leave feedback on a product unless they have bought it. By comparison, anyone with an Amazon account can write a review there, regardless of whether or not they purchased that particular product through the site (verified purchases are marked as such).
Greater brand exposure
Although Amazon has a universal layout for all sellers that could be considered easier for customers to browse, sellers have more opportunities to showcase their brand on eBay.
It offers more in the way of developing a unique brand that people will remember, with personalized HTML coding and other design tools available to sellers. This gives sellers a lot more room to improve their profile and win over competitors in visual ways.
Access to seller tools
In addition, a major draw to an online marketplace can be the seller tools offered. EBay offers shop analytics and seller success resources to enable sellers to grow their business, neither of which are offered by Amazon. While you have to pay for these additional services, it still gives online merchants the option to take a proactive approach to increasing their eBay sales.
In addition, eBay has a shipping calculator that helps determine how much it will cost to deliver an order, giving smaller sellers greater visibility and control of their margins. This is a feature that other smaller marketplaces like Bonanza have also started to implement to help sellers reach their full potential.
Are you an eBay seller with your own blog or website? You should consider signing up to the marketplace’s affiliate program. eBay affiliates are provided with resources to monetize their websites, social pages and other online properties by driving high-quality traffic to eBay. So not only can you get paid twice for selling to visitors who came from your own website, you can also get paid for money spent on other sellers' products.
EBay also offers seasonal discounts to encourage sellers to publish brand new items during holiday seasons, which means more sales during holiday seasons.
Selling on eBay: cons
Smaller customer base
To begin with, eBay has 167 million customers—that’s a lot less than Amazon’s reported 310 million. And with a smaller customer base comes an immense responsibility to build up your brand’s credibility.
As e-commerce expert Graham Charlton explains, shoppers tend to be loyal to eBay, not to specific brands selling on eBay.
Basic messaging system
Another issue: as eBay was originally designed with individual sellers in mind, its customer support network isn’t equipped to manage ticket volume like other marketplaces.For example, you cannot let a support agent respond to your messages from inside eBay without also giving them control over your listings. For businesses with big customer support teams, you can’t be switching this control all the time. Online sellers could end up switching to other marketplaces if they feel the communication to customers is a hurdle.
Customer price sensitivity
Despite eBay’s efforts to rid itself of its roots as an online auction site, consumers still expect to bag a bargain and are accustomed to bidding for certain prices. This can be a drawback for online sellers when trying to keep the pricing competitive but also make a profit.
Fulfilment is up to you
Delivery expectations are increasing, which makes it hard for smaller sellers who haven’t yet developed a reliable fulfillment process to keep up with demand as sales grow. Unlike Amazon, where you have access to the massive FBA network, eBay doesn’t yet have a similar alternative so it is up to the seller to make sure their products are shipped and delivered on time. That said, it is possible to use FBA for eBay fulfilment.
Slower bulk upload feature
Unlike Amazon’s flat file product listing process where it’s easy to specify every last detail of structured data, the bulk upload feature in eBay is not quite as comprehensive. For instance, if you use individually designed HTML templates for your product descriptions, it’s more difficult to bulk upload your listings exactly as you would like to them to appear on the product page.
If you have a lot of products, or add new products to your catalog regularly, creating detailed product listings in bulk on eBay is more time-consuming, so it’s important to take this into account when allocating staff workload.
Amazon vs eBay: the bottom line
At the end of the day, to say that eBay or Amazon is inherently better than the other would be inaccurate. Different businesses have different needs and it’s clear that both sites attract very different customer types.
The important thing is to carefully consider those needs and identify which marketplace best meets them. In the end, if you can cater to both audiences, a strategy that includes Amazon and eBay may well be the best option in terms of revenue.
However you choose to move forward, remember that it’s important to analyze your own needs in order to make selling on marketplaces a strategic part of your online business. Whether you choose to sell on one channel or on multiple, it’s worth first ensuring you have the right structures and software in place to future-proof your growth.
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