Ecommerce underwent a rapid transformation in 2020 due to the pandemic. Consumers started to shift their shopping habits, and more people began purchasing online.
Now that online shopping has become a norm, entrepreneurs realize how lucrative selling products online can be. And in the wake of this new “online selling” revolution, two major eCommerce platforms rose to prominence.
Amazon vs eBay became an obvious choice for many aspiring entrepreneurs.
Although Amazon and eBay aren’t the only options available to sellers, there is no question that they are the most popular. Amazon is known as the largest online retail platform. On the other hand, eBay is said to be the largest wholesaler platform.
If you want to start an online business and know which one between AMZN and eBay is the best platform for you, read this article to find out.
Amazon vs eBay: Factors To Consider For Professional Sellers
Nowadays, eCommerce sellers have multiple platforms where they can take their products. Some famous platforms are Walmart, Shopify, Amazon, eBay, and Alibaba. All these platforms provide great opportunities for sellers to make money by selling products.
Among all the popular online selling platforms, there is no doubt that AMZN and eBay are two of the most popular. If you have been researching the best online platforms to use, it is highly likely that these two are on top of your list.
But what are the factors that make eBay better compared to Amazon, and vice-versa? What are the pros and cons of selling on each platform? Regarding customer services, which one offers better attention to detail? Which one has a more loyal customer base?
Selling on Amazon and eBay has different advantages and disadvantages. To understand which platform works best for your needs, let us discuss some of the variables that separate the two.
Amazon and eBay were the first e-commerce websites that became popular before online shopping became the norm. And both platforms promised a more convenient shopping experience to customers.
While each has its way of dealing with customers, both are customer-centric and offer a wide selection of products at a fair price. Still, customer service and consumer trust are very different between the two.
Amazon, because of its easy refund and return policies, has been able to win customers’ trust more compared to eBay.
Amazon’s vision statement is “to be earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavor to offer its customers the lowest possible prices.”
It is evident from this statement that Amazon is concerned with maintaining a high level of customer trust. Amazon has proven this statement repeatedly through its excellent customer service over the years.
One of the significant reasons for Amazon’s success is its return policy. Amazon charges a full refund to customers who are not satisfied with the product packaging, delivery, or quality. No questions asked. Amazon Prime subscribers are even given a “same-day delivery” option, which is a game-changer for customers.
eBay, on the other hand, has a less-than-favorable refund and return policy. Many of the products that eBay offers are marked as “non-refundable” by the sellers. Because of this, there is no question that Amazon has a better refund and return policy.
source: jungle scout
If you decide to choose based on the fulfillment services provided by both of these online giants, AMZN is no doubt the ideal choice. Unlike AMZN, which offers FBA (fulfillment by Amazon), eBay only provides one opportunity for its sellers. Sellers must pack and ship the products by themselves with no help or assistance from eBay.
Amazon has two fulfillment options.
- Fulfillment by Merchant – this is one of the most common fulfillment services on all shopping platforms. Sellers pack, prepare, and ship the products to their customers without assistance from the selling platform.
- Fulfillment by Amazon (Amazon FBA) – This is an exclusive service offered by AMZN. Sellers who use this service can outsource the order fulfillment to Amazon. In other words, Amazon will be responsible for storing, packing, and shipping the orders to their customers. However, this service is not free. There are final value fees added to the cost of using this fulfillment method.
FBA provides great relief for sellers because they no longer have to worry about prompt delivery and order packaging. This service allows sellers to invest their free time in other important parts of their business.
In addition, FBA is also a cost-effective fulfillment option for sellers on a budget. There is no need to worry about expensive storage, shipping, and handling fees. AMZN will take care of all these, although additional charges are incurred on your selling fees.
In contrast, sellers on eBay do not have this option available to them. Sellers who want to spend less time worrying about fulfillment will definitely choose AMZN because of this.
Generally, eBay seller fees aren’t as expensive or lucrative compared to other platforms. Here’s a breakdown of the selling costs on the two platforms:
Selling Fees on eBay.
There are two types of selling fees on eBay. The fee structure on eBay is quite simple and easy to understand. Let’s discuss these fees individually:
- Insertion fees: It is the fees charged to any seller if they cross the free product listing threshold limit. According to eBay, sellers are given 250 free listings per month, and beyond that, a nominal amount is charged per listing. These fees are known as insertion fees.
- Final Value Fees: The final value fee is the fee that you have to pay once your products are listed on eBay. It is paid based on the product’s final sales price. It also includes the fees related to the handling and shipping of the products.
- Payment Processing Fees: Payment processing is related to the type of payment that eBay sellers accept from their customers. Payment processing fees depend on whether sellers accept “managed payments” on their listings or not.
This fee is included in the Final value fees if you use eBay’s managed payment methods. If you are using PayPal to process your customers’ payments, you will have to pay $0.30 in addition to 2.9% of the total selling price. This fee also includes the sales tax.
- Optional Listing Upgrade Fees: A listing upgrade is an optional service that you can use if you want to stand out from other sellers in the market.
Under this service, you can upgrade your product listings to attract more buyers. You can use this service for high-quality product images, making your font bold, and adding subtitles to your product descriptions.
eBay’s listing upgrades fees can increase as you start listing your products. Estimating the costs before jumping in is the best course of action. Here is eBay’s fee calculator that can help you determine the exact amount of fees you have to pay before listing your product on eBay.
Amazon Seller Fees
The fees you incur as a seller on AMZN will depend on the services you want AMZN to perform on your behalf. Factors such as product type, size, material, fulfillment options, etc., will determine your cost of selling.
There are two selling plans that you can use on AMZ:
- Individual Selling plan
- Professional Selling plan
You can opt for an Individual Plan if you sell less than 40 units. Although signing up is free, it will cost you $0.99 per item sold. Additional selling fees also apply depending on what kind of product you are selling.
With the Professional Plan, you have to pay a monthly fee of $39.99 plus additional selling fees. If you sell more than 40 units per month, this is the best for you. You don’t have to pay $0.99 for every item sold when using this plan. There are also other added benefits like the ability to run advertisements, top placement on the product detail page, etc.
Unlike FBA Sellers that have to pay extra for fulfillment fees, FBM sellers will only have to pay referral and selling plan fees. However, you must factor in your shipping costs if you will fulfill the products by yourself.
Amazon Prime is a game-changing factor that makes Amazon superior to other online selling platforms. The perks and services offered by AMZN Prime are so valuable that many customers are willing to pay a monthly subscription for it.
One of the primary reasons why AMZN has a large and dedicated customer base is AMZN Prime. Under a Prime subscription, customers pay a monthly subscription fee. This fee gives them free shipping and faster delivery — and they also enjoy free movies and TV shows with the AMZN Prime App.
Prime members are some of Amazon’s most loyal customers. They won’t go to eBay or other online selling platforms because the perks of their membership are so much better.
Moreover, it is due to these loyal customers that events like Black Friday and Prime Day have a record number of sales.
Amazon reported 200 million paying Prime members worldwide as of the first quarter of 2021. This figure increased from 150 million to the end of the fourth quarter of 2019.
With millions of paying members around the world, third-party sellers will often choose to sell on Amazon over eBay.
Product Quality and Prices
Amazon prefers sellers with brand new items. However, not all buyers are looking to purchase new items. Some buyers prefer to buy gently used items at a lesser price. This is where eBay comes in as a viable alternative.
Since its inception, eBay has been an open marketplace for sellers. Compared to eBay, AMZN has not been the best place for wholesalers in general. Amazon mostly sells products under its brand and provides a share of its market to 3rd party sellers.
There are also many restrictions on products that can be sold on AMZN. There is actually a list of AMZN restricted products that cannot be sold on the website.
In contrast, you can sell almost everything on eBay. From brand new items to slightly-used items, eBay has a more open marketplace where sellers have more freedom to sell their goods.
The game-changer for eBay though is its ability to hold bidding and auction listings. Under the auction model. sellers can place your goods under auction and buyers can bid against each other to see who gets the item.
How does the Auction style model under eBay work?
Listing in an auction-style model works well if you want to let buyers decide what your item is worth.
Under the auction-style model, sellers have no control over the product’s pricing. In short, it is the customers who will decide the price that they are willing to pay for your products. Ultimately, this can cause you to make losses or lesser profits.
The auction-style selling has its pros and cons. If you have lots of people bidding on a product, you could pay more than what you want. However, if no one is bidding on a product and you have no competition, you might pay way less than the average price.
Sellers who do not want their auctions to fall under a certain price can add a “reserve price” before starting the listing. This means that if the lowest bid doesn’t reach the reserve price, no one will win, and the auction will be canceled.
In this regard, eBay is the better platform compared to AMZN. Since AMZN doesn’t offer any auction-type listings, eBay automatically wins this battle.
Amazon vs eBay: Conclusion
Both AMZ and eBay are great platforms for aspiring online sellers. Which one you choose depends on your business model and the budget that you have for selling fees.
The primary things to consider before deciding to sell on either of these platforms are:
- Business goals and expectations
- Business model (auction vs buy it now)
- Fulfillment options (FBA vs fulfilled by the merchant)
- Customer service
Both platforms have been around for a long time and are highly respected in their fields. However, you have to match your expectations with the opportunity that these platforms can provide you.
Define your target audience and start your business with a clear goal. Think of how you want to fulfill your orders. Ask yourself if you want an auction-style of listing.
Weigh your options and make a decision. Check if the pros outweigh the cons, Decide where you can earn a decent profit before settling for a platform because this will be your home for years to come.
Hopefully, this article was able to help you decide which one between the two biggest online selling platforms is the best for your business.
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