Selling on Amazon vs. eBay: Make Your Choice!
E-commerce sellers nowadays have a plethora of options for where they can sell their goods online! However, Amazon and eBay are two sites that have been around longer than the rest. But how do you know which one will be more beneficial to you? Let’s find out key distinctions between selling on Amazon vs. eBay.
Unlike Amazon, eBay only allows third-party sellers to sell their products. Individual sellers or companies can list their products in either an auction or a fixed-price manner, thus the good news is that you’ll never compete with eBay because they’re just a marketplace!
Along with the selling of products from their own line, Amazon does include third-party merchants, mainly private label sellers, with whom you may find yourself competing. Because there is no auction feature on this site, all products are sold at a fixed price, just like on a traditional retail site.
It’s a difficult question to answer whether selling on Amazon vs. eBay is better because each market has its own pros and cons. Without a doubt, Amazon is the world’s largest online marketplace. While sellers have access to a rising number of alternative marketplaces, these two online shopping titans remain head and shoulders above the competition. So, is Amazon better than eBay?
We will compare Amazon vs. eBay for selling in-depth, so you can arrive at a conclusion about which is better for your business. This can give you more understanding of how to sell on Amazon and eBay.
The Pros and Cons of Selling on Amazon Vs eBay
The following images summarize all the important things you have to know. For more in-depth information on finding out where to best sell your products, keep reading.
1. Sales Model
The sales model is a crucial factor when you ask yourself: “Selling on Amazon vs. eBay?” Although eBay is best known for its auction-style selling approach, you can also sell products on eBay for a set price, just like Amazon.
On Amazon, shoppers must pay a predetermined amount regardless of whether they are purchasing a brand-new or used item. eBay, in contrast, is most known for its auction-style listings, which are popular among eBay customers because they expect a good deal. Buyers can bid on products until the end date you specify. With auction-style ads, however, sellers can include a “accept the best offer” option, which allows buyers to submit an offer for an item that the seller can accept or reject. On Amazon, on the other hand, all offers have a fixed price. However, sellers can specify different conditions (new, used, etc.) and thereby establish price differences.
Selling at Amazon vs. eBay: Buy Box, Private Labels and Wholesale
While every offer on eBay has its own product detail page, on Amazon the same offers are listed on the same product page. This is the biggest difference between the two giants and leads to direct competition between sellers on the product page itself. Because of this, it’s crucial to get to know the requirements of the Buy Box (image on the left).
If you’re serious about selling on Amazon, you should consider the following business models: Amazon Wholesale or Amazon Private Label. While both models might be lucrative, their methods and procedures for researching, sourcing, and selling their individual items are drastically different. Let’s take a look at these models which will give you more understanding of selling on Amazon vs. eBay.
The first approach of Amazon selling are Private Label products and the resulting establishment of its own brand. It all starts with a seller locating a White Label product, which is often a generic item that has no branding or labeling and can be purchased in bulk from a manufacturer. Private label merchants buy unbranded items at a low cost, brand them with their own name, and resale them on Amazon for a higher price.
Wholesale is the second type of Amazon retailing. It begins with a seller locating an established product, generally a brand name product, and purchasing large quantities of these items from a manufacturer or brand owner. Wholesalers buy these branded items in bulk and resale them on Amazon for a greater profit. Amazon Wholesale places a strong emphasis on locating well-known, branded items with a significant return on investment and profit margins.
2. Consumer Trust
Another factor that we need to consider in terms of selling on Amazon vs. eBay is consumer trust. In fact, Amazon places such a premium on obtaining and keeping consumer trust that it is included in the company’s vision and values. The ease with which things can be returned is one of the reasons why Amazon is so popular among online buyers. Their A-Z Guarantee promises that customers will get a complete refund if they are unhappy with the quality of their product or the time it takes to arrive.
When it comes to returning things and securing full refunds, eBay’s procedure is even more convoluted. Furthermore, sellers can check the ‘No Returns’ box on eBay, leaving purchasers with no recourse if they are dissatisfied with the product.
You could assume that’s a positive thing as a seller. However, in reality, it can be incredibly harmful to your company. In other words, setting your listing to “No Returns” sends the message to potential customers that you don’t trust what you’re offering.
Amazon vs. eBay: Who is bigger?
Anyway, if we take a look at the statistics, we can see that Amazon is the leader, which speaks volumes.
Leading e-commerce websites in the United States as of June 2021, based on the number of monthly visits:
3. Fulfillment Methods
You can’t arrive at the best decision when it comes to selling on Amazon vs. eBay without considering fulfillment methods.
When it comes to fulfillment on eBay, you just have one option: pack and ship orders yourself. While eBay expects sellers to manage every part of their business, Amazon promises to help you with a substantial amount of it.
Amazon, on the other hand, gives you the choice of fulfilling orders yourself (Fulfillment by Merchant; FBM) or having Amazon do it for you (Fulfillment by Amazon; FBA). It is a service that allows you to store your products at Amazon warehouses. When a sale is made, Amazon will choose, pack, and ship on your behalf. Amazon FBA truly differentiates Amazon.
This is a no-brainer, given that Amazon offers greater shipping support than eBay. Even if eBay began offering such a service tomorrow, it would be competing with the world’s most advanced delivery service, which is still in the early stages of development.
Let’s continue our comparison on selling at Amazon vs. eBay by focusing on advertising options on these two platforms.
4. Amazon to eBay Listing and Advertising Options
Both Amazon and eBay provide extra services to help your products stand out from the crowd. But what is the seller’s priority?
Amazon’s advertising options
Amazon Sponsored Products ensures that your products appear on the first page of search results for certain keywords. You have the option of choosing which keywords to target yourself or letting Amazon do it for you.
Because this is a pay-per-click (PPC) service, you will be charged each time your ad is clicked. As a result, it’s critical to keep track of how much you’re spending. It is, however, a more advanced service with numerous apps and tools to assist you in managing your campaigns in greater detail.
Amazon offers a variety of advertising alternatives, including Sponsored Products and other services geared at promoting companies and affiliates. This is another important aspect that can help you when it comes to choosing between selling on Amazon vs. eBay.
eBay advertising options
Promoted Listings on eBay enhance the visibility of your items in search results. Your items are boosted alongside the products of other sellers, each with its own bid, and you ‘bid’ a sum to be paid on top of your ultimate value charge, which is generally around 5-10%.
Advertisements for leading brands
Brands with large marketing budgets use eBay’s branding solutions to optimize their listings as well. It differs from promoted listings because it is more detailed and personalized.
5. Customer loyalty
Selling on Amazon vs. eBay is still a controversial question? Let’s consider Amazon Prime, which is one of the primary features that Amazon offers that eBay does not. While this may appear to be exclusively for the benefit of customers, it is one of the key reasons behind Amazon’s vast and loyal customer base.
Customers are more likely to buy from Amazon rather than letting their Prime subscription expire because they pay a monthly charge to ensure fast delivery.
It’s time to look at the difference between Amazon and eBay selling fees and listing. It must be one of the most important factors to consider!
6. Amazon’s vs. eBay’s Selling Fees
Amazon seller fees
Well, when it comes to selling on Amazon vs. eBay, fees must be taken into account. Fees vary depending on the product being sold and the fulfillment method (FBA or FBM) used by Amazon. Professional Seller status comes with a fee, as well as a referral fee per item sold. If you’re using FBA, you may think of this as an extra seller cost, though it’s a voluntary one.
The only expenses you would incur while selling FBM are the ‘Selling on Amazon fees,’ which include the ‘Amazon Referral Fee’ and the ‘Variable Closing Fee’. FBA sellers are also liable for them.
However, in addition to the ‘Selling on Amazon fees,’ FBA sellers must additionally pay a ‘Fulfillment by Amazon charge,’ which is determined depending on the weight and dimensions of the goods you want to sell. This charge is made up of ‘Monthly Storage’ and ‘Fulfillment’ fees.
On Amazon, a Professional Seller subscription costs $39.99 per month. You can get up to 100,000 free listings with this, and you can get even more if you keep generating consistent sales.
The referral fees charged by Amazon vary greatly by category. Consider a 15% markup with a $0.30 minimum per item as a starting point. You’ll also be charged a $1.80 closing fee for media products.
Now let’s take a look at eBay’s seller fees to make a clear distinction between selling on Amazon vs. eBay.
eBay’s seller fees
On eBay, there are two types of selling fees. First, there are insertion costs, which apply when your goods are listed. Then there are final value fees, which apply when the goods are sold. You’ll very certainly be charged a PayPal processing fee, which isn’t paid to eBay but is still a part of the transaction.
eBay charges $0.35 per listing and category for insertion fees. Setting up an eBay Store entitles you to a monthly listing allowance. Basic Store is $28 per month and includes 250 free listings, with packages ranging from $28 per month to $350 per month for Anchor Store.
The eBay final value fee is a percentage of the product’s cost. The exact rate varies depending on the product category, but it’s usually about 10%.
If you process your customers’ payments using PayPal, however, you will be charged $0.30 in addition to 2.9 percent of the overall selling price. Sales tax is included in this.
So, having considered Amazon vs. eBay seller fees, you now have more understanding of what is better for you. So, what will you choose when asked: “Selling on Amazon vs. eBay”?
7. Alternatives to Amazon and eBay
It’s true that Amazon and eBay may be the biggest fish out there in the e-commerce world. But they are by far not the only ones. Depending on what you are planning to sell and what area you are planning to expand in, there are many different platforms that can service your needs equally efficiently.
Etsy is like Amazon and eBay for artisans, focusing very strongly on handmade products. You can find anything from art, photography, toys, bath & beauty products, food, jewelry, food, quilts, the list goes on and on. Just like in our ‘selling on Amazon vs eBay’ standoff, Etsy is a global platform and it grows rapidly, as marketplacepulse.com showed recently in Year in Review 2021: “Etsy was up 69% – one of the few companies that experienced a measurable step change”.
The big difference to the two platforms is that Etsy offers its customers products with more “character” if you so will. Customers browsing Etsy are usually looking for something beautiful and unique rather than cheap and practical.
The well-known U.S. discounter also has an e-commerce platform that offers sellers the opportunity of establishing another revenue channel. It is especially attractive to sellers because the setup is simple and free of charge. There is also no maintenance fee and the range of items you can sell on Walmart is similar to the range the two market leaders have.
Apart from offering streaming, data and banking services, Rakuten is also one of the most successful e-commerce platforms worldwide. With most of their customers based in Japan, Rakuten is especially attractive for sellers looking to expand on the Asian market. The Japanese platform is different from Amazon insofar as it does not “interfere” as much with the seller’s business. There is no FBA option and no own line of products à la AmazonBasics competing directly with the customers. Rakuten is only a shopping platform and payment gateway, nothing more.
Bonanza is a nice alternative one can not overlook in our comparison ‘selling on Amazon vs. eBay.’ The range of products you can sell on Bonanza is very wide. Are you looking to sell the very unlikely combination of a handmade necklace, a new pair of running shoes and/or a TV? Look no further than Bonanza. As a seller platform, Bonanza shines with low fees, great customer support, easy to print and pre-sized shipping labels, built-in marketing options and easy access as well as integration.
Final Thoughts on Selling on Amazon vs. eBay
So, what is better, Amazon or eBay? It’s time to make a decision now that you know the distinctions between the two platforms and, hopefully, a better grasp of how they can benefit your business. When choosing Amazon or eBay to sell, pay attention to the factors which were mentioned in the article. Good luck with your choice!
Frequently Asked Questions
As you can see there are lots of aspects to consider when choosing the best platform for selling, but we would opt for Amazon since it seems more lucrative for sellers.
Fees vary depending on the product being sold and the fulfillment method. So, it is difficult to answer whether selling on Amazon vs. eBay is cheaper.
Image credits in order of appearance: ©Claudio Divizia – stock.adobe.com / © Petr Ciz– stock.adobe.com / © Андрей Яланский – stock.adobe.com / © Ana Baraulia – stock.adobe.com/ © hakinmhan – stock.adobe.com