The Internet offers several options to start selling online. However, none of these are as big or as easy as Amazon or eBay. Amazon is much bigger but eBay has managed to survive throughout these years. And many people find it hard to decide between selling on Amazon vs. eBay.
Each one has its plus and minus points and each of them caters to different kinds of needs. Also, remember that eBay is not a substitute for Amazon. Amazon has more than a 50% share of eCommerce market. So, you cannot choose any other platform over Amazon if you are serious about selling online. However, eBay or other platforms have their advantages.
Amazon is a bigger marketplace than eBay. Around 100,000 sellers join Amazon every year. This makes Amazon a very competitive platform. Major brands and retailers are also setting up stores on Amazon and Amazon has made some competitive label private brands as well.
Because of the heavy presence of big fish in the retail world, small retailers find it hard to succeed on the platform. It has become even harder for these retailers now given they are required to pay a minimum of $1500 to deal with certain restricted brands.
However, there is still space for private label brands to enter the competition. Amazon is now offering EBC and A+ content as well as brand pages to provide the sellers with more branding opportunities.
As for eBay, it caters to 25 million sellers, including several established brands. However, many of the top ten sellers on eBay are not recognized widely. As for the established brands, they are not confined to eBay and have a presence on other channels.
This feature allows small sellers to develop a brand, build a storefront, and market to customers without getting toppled by the high competition. According to many sellers, their brand name is more distinguishable on eBay than on Amazon. There is a general misconception about eBay that it deals with used stuff only. But the facts disagree, as 81 percent of products put up for sale on eBay are brand new.
eBay is a better marketplace for smaller or new sellers, as the competition is not high, and there is a huge customer base still. Amazon is suitable for sellers that afford to partake in a competing environment. Moreover, Amazon is a safer marketplace because of the presence of major, well-reputed sellers.
Sellers usually prefer a marketplace that has an international presence and holds a varied customer base. Amazon hosts 12 websites domains in Europe, Australia, Asia, and North America. Moreover, it has customers in more than 180 countries with 33 percent of sales outside its home ground, i.e., the US.
As for eBay, it has 25 website domains in Europe, Australia, North and South America, New Zealand, and Asia. 57 percent of its sales are outside the US.
As evident from the statistics, eBay has more international exposure. Hence, it is more suitable for sellers who are looking to expand internationally and have a diverse, large customer base. Amazon is for those sellers who are interested in strengthening their US customer base.
Amazon holds a base of 300 million users while 30 million of these users visit the platform every month. The two main qualities of the customers here are value-focused and price loyal. Price loyalty means that they are mindful of the price while making a purchase.
A large chunk of Amazon users checks the prices against other retailers and retails before purchasing an item. If this factor is accounted for, the Amazon users are not blindly loyal. However, if membership is considered, these users are very loyal. This loyalty cannot be undermined, as 44 percent of the US households hold Amazon Prime. The willingness of these people to spend money to spend more money shows that they are value-focused along with being frugal.
Meanwhile, eBay has 167 million users, of which half are on Amazon too. eBay’s customers are also value-focused but are likely to pay less owing to the platform’s auction mode. On eBay, competitive pricing is the unique feature and the major determinant of customer behavior. eBay users are also interested in the quality of the products as well as fast service and quality service, not involving hassle.
On eBay, the level of customer service and the seller’s name is more decisive than the brand name of the platform. On Amazon, sellers are required to meet the high standards buyers have perceived for the Amazon brand. If they do not fulfill the buyers’ expectations, they can face suspension. So, eBay is a safer and easier option for sellers who do not want to get into intricacies.
There are 38 product categories on Amazon, ranging from wine to automotive part. As per 360pi, 688,690 unique brands trade on Amazon. Its top five categories include:
- Cell phones and accessories, containing 82,039,731 products.
- Electronics, having 31,604,887 products.
- Home and kitchen with 64,274,875 products.
- Clothing, shoes, and jewelry, having 33,422,437 products.
- Sports and outdoors, having 23,997,293 products
It needs mentioning here that Amazon does not offer all categories to sellers. Only 20 are open without approval while the remaining categories require a subscription to a Professional Selling Plan and permission from Amazon.
On the other hand, eBay has more than 1 billion product listings in over 20,000 product categories. These categories are diverse, including ‘baby gear’ to ‘incunabula’. eBay’s recent data states that its most in-demand products include:
- Fashion: sneakers, suits, handbags, backpacks, wedding dresses, dresses, fragrances, designer shoes.
- Electronics: cameras, game consoles, and laptops.
- Collectibles: lego sets, dolls, RC cars, action figures, stamp collections, Playmobil sets, trading cards, coins and bullion, and toy airplanes.
You can check the product categories of both platforms and see where your product would fit.
Amazon Fees vs. eBay Fees
eBay charges 10 percent Final Value Fee (FVF) while Amazon’s FVF is 15 percent. eBay also charges Paypal fee, which is 2.9 percent of the sale price plus a flat rate of $0.30. However, eBay’s fee is still less than Amazon’s, and its sellers get to keep an average of 5.13 percent more profits than profit selling the item on Amazon.
Hence, it is cheaper to sell on eBay than on Amazon. However, you should know that on eBay, you are on your own regarding shipping, storage, distribution, and packaging of the product. Whereas Amazon offers all these services to facilitate the seller and obviously, it charges for providing these services.
If you want to avoid the hassle of storage, shipping, etc., Amazon is a better option for you. Also, you should know that even if you are not opting for Amazon’s seller services, you will still be paying more fees. But the option will be available to use these services in the future.
eBay requires its users to use bank transfer or Paypal for making payments. Along with the hassle of signing up for a PayPal account, there is also a fee of $0.45 plus 2.9 percent of the sales values. However, eBay allows the buyers to pay the sellers directly while it sends its fee invoice once a month. A holding period of 21 days exists for new sellers, which leads to immediate transfer afterward.
This way, eBay offers a better process, ensuring immediate payment to the sellers. As for Amazon, it plays the role of an intermediary. It collects the money from buyers, deducts the fees, and then transfers the remaining funds to sellers after a holding period.
Amazon’s approach is more buyer-centric. That is why it has a holding period so that refunds and returns can be processed smoothly. Individual sellers may have to wait for seven days while the holding period for professional sellers is 14 days.
Roundup: eBay or Amazon?
eBay is a better selling platform if
- You are looking for a cheap marketplace in regards to fees.
- You can manage the shipping, storage, packaging, and distribution.
- You intend to develop a strong brand.
- You want a varied, international customer base.
- You deal with products like collectibles, used, or brand name items that Amazon has restricted.
Amazon is better for you if:
- You are not fussed about paying extra money in fees and want to avoid the intricacies of shipping and handling.
- You are more focused on the US-based customer base.
- Generating sales is more important for you than brand identity.
- You deal with new items mostly and have no intention to sell items from the restricted list.
- You have no problem with Amazon’s potential emasculation of your e-commerce business.