Amazon vs eBay: which marketplace should you sell on?

Amazon is currently the most-visited eCommerce site in the world, 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 Amazon vs eBay, so you can make an educated choice when deciding which one to sell on.

Amazon vs eBay

Selling on Amazon: pros

When Amazon was launched back in 1995, selling books was its specialty. Today it is the world’s largest eCommerce marketplace and offers more than 353 million products of all shapes and sizes. Here are some of the advantages that come with using the world’s most popular marketplace.

Massive reach and high conversion rates

Amazon has over 300 million customer accounts, 200 million visitors a month and around 2 million sellers. There’s no question that this 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.

Even when online shoppers have found a product elsewhere, 90% of them head over to Amazon to compare prices.

Amazon’s customer centric reputation has created an enormous worldwide audience.

Reasonable fees

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 service for orders.

All you have to do is ship your products to one of Amazon’s fulfillment centers and they look after the rest. This takes a lot off of a seller’s plate, allowing you to focus on marketing and sales. This is particularly useful for small companies and one-man shows.

Using FBA also comes with an Amazon Prime badge, which means your products are eligible for free two-day shipping to Amazon’s 150 million Prime members. FBA sellers are also more likely to win the Buy Box. Two big conversion drivers for Amazon sellers.

Amazon’s fulfillment service (FBA) is a highly efficient organization that can be very useful to sellers who don’t want to deal with logistics, warehousing or customer support.

However, this top-class service comes with some hefty fulfillment and storage fees. These can really add up if you’re selling heavy or large-sized products. However, it can be cost-effective for those who are selling small, lightweight products with high margins.

Related: Amazon multi-channel fulfillment: what to know and how to use it

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.

While eBay offers an alternative in eBay Business Supply, this platform is still finding its feet. For B2C companies who have inventory which would also appeal to businesses, an Amazon Business account opens up a whole new audience. As for traditional B2B retailers and wholesalers, it caters to their needs perfectly. For them, the Amazon vs eBay dilemma becomes more of an obvious choice.

Selling on Amazon: cons

While Amazon’s customer-centric culture has built it a loyal following, this doesn’t always benefit the sellers on its platform. From grueling standards to limited brand building, here are the downsides of the world’s biggest eCommerce site.

Intense competition

With the number of sellers on Amazon growing significantly year-on-year, it is an extremely competitive marketplace. In the first quarter of 2020 alone, over 200,000 new sellers joined the marketplace.

More and more large brands including Bose and Nike are now selling directly on Amazon. This makes it harder for third party sellers to compete in those categories.

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.

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

Amazon has a lot of strict rules to abide by. Though they are there to benefit its customers, sometimes factors outside a seller’s control, like review manipulation, can lead to or listing suppression or even account suspension.

Here are some of Amazon’s most important policies all sellers must follow:

  • Order Defect Rate: Sellers need to keep this below 1%. Factors like negative feedback, A-to-Z Guarantee claims and credit card chargebacks contribute to it
  • Late Shipment Rate: This needs to be kept below 4%
  • Cancellation Rate: This needs to be kept below 2.5%

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. Find out more about Amazon’s seller performance here.

Turn a blind eye to any of these  guidelines and your account will be at risk of suspension.

Read MoreeCommerce Customer Service: The Ultimate Guide

Limited brand ownership

Building a well-known brand on Amazon is achievable, but it’s more difficult than doing it through your own website.

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.

You can build a custom store front and run Sponsored Brand ads to try to build visibility for your brand. But for those who want to build their own loyal following, Amazon isn’t an ideal platform.

ebay logo

Selling on eBay: pros

eBay has roughly 167 million active users and 25 million sellers. While it’s well-known as an auction site, over 80 percent of eBay merchandise is new and sold at a fixed price.

Unlike Amazon, eBay doesn’t require a product to be hosted on a listing page before being sold. This opens up the marketplace to more niche sellers, which allows for greater product variety.

Lower fees

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 the item’s category. They 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. This compares favorably with the 15% fee 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.  

When you’re asking yourself “should I sell on Amazon vs eBay?” Do your research to see exactly what percentage you’ll be charged on each platform.

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.

Greater brand exposure

Amazon has a layout that‘s very easy for its users to browse products. But you have more opportunities to showcase your brand on eBay.

It offers more ways to develop a unique brand that people will remember. With personalized HTML coding and other design tools available to sellers. you can customize your profile and communicate your unique brand voice.

Access to seller tools

In addition, a major draw to online marketplaces are 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.

The eBay Affiliate program

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

While eBay offers sellers greater flexibility, it also comes with some significant limitations.

Smaller customer base

To begin with, eBay has 167 million customers—that’s a lot less than Amazon’s 310 million. Looking at current trends, the gap is only set to increase as Amazon continues to gain more of the eCommerce market, while eBay’s growth slows. 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

eBay was originally designed for individual sellers. This means its own customer support platform wasn’t built to manage high ticket volumes.

For example, you can’t let a support agent respond to messages from inside eBay without giving them control over your listings. For businesses with big customer support teams, this can pose a risk. Compared to other marketplaces, customer communications on eBay can be a hurdle.

This is a problem which can be overcome with eCommerce customer service software. With eDesk, you create a single location for incoming customer messages from every marketplace you sell on, including eBay. This means your support agents won’t have to log in to eBay Home or Amazon Seller Central at all.

If you use eBay’s own customer support platform, you’ll see that every customer message creates a new ticket, even from the same person. This can be an organizational nightmare for support agents! eDesk will pull every incoming message from a customer into a single thread, making life a lot easier for your support team.

eDesk customer support software

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. Buyers are often accustomed to bidding for certain prices, which can be a drawback if you’re selling items at a fixed price.

eBay is often still considered as an auction site and so many users expect to be able to bid for items rather than purchasing straight away.

Fulfillment is up to you

Delivery expectations are increasing, making it harder for smaller sellers who haven’t yet developed a reliable fulfillment process.

Unlike Amazon, where you have access to the massive FBA network, eBay doesn’t yet have a similar alternative. This means it’s 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 data, the bulk upload feature in eBay is not 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, be aware that creating bulk product listings on eBay is time-consuming. It’s important to take this into account when allocating staff workload.

However, eBay recently made its offline Turbo Lister tool defunct and is now telling sellers: ”Everything you need will soon be available in the Seller Hub”. Sounds promising!

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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