With the pandemic changing the way how most people shop online, it’s very easy for e-commerce sellers to offer their products online. Whether you plan to sell on Shopify, Etsy, Walmart, or any other marketplace, access to a wider customer base has never been easier. Having said that, the two biggest marketplaces are still Amazon and eBay. Selling on Amazon vs. eBay has always been a great debate when it comes to third-party seller marketplaces.
These two platforms are not only the oldest but also the biggest in traffic. Thus, it only makes sense to ask which one is better between selling on Amazon vs. eBay. According to Webtrailer, Amazon is the number one best-performing e-commerce website, followed closely by eBay. If you dream of being a successful third-party seller, deciding between selling on Amazon vs. eBay is a priority.
There are many reasons to choose one platform over the other, which is why we wrote this article. Here, we will discuss the pros and cons of selling in each marketplace. We’ll also decide which is the better bet for selling on Amazon vs. eBay.
Ready to dive into this guide to selling on Amazon vs eBay? Then let’s start.
Table of Contents
Trust Is an Important Factor
When it comes to online selling, getting the customer’s trust is essential. Remember, people are purchasing from you without actually seeing the product physically. They only rely on images, descriptions, videos, and product reviews to justify making their purchase.
If your trust rating is so low, it will be tough for you to make sales in any online marketplace. People would have a hard time justifying their purchase if they can’t trust that you’ll deliver on your promise.
When it comes to trust ratings, both AMZ and eBay rank high among all the other marketplaces. Both websites were established during the mid-90s internet boom, giving them a considerable headstart compared to others.
However, when compared to each other, there is no doubt that AMZ edges eBay in a head-to-head matchup. This might be a result of AMZ’s obsession with customer service – to the point that they are willing to refund some orders with no questions asked.
AMZ is well-known for its “A-to-Z guarantee” which means customers can get a full refund if they are dissatisfied. It can be due to the quality of the product, delayed shipping times, etc. But whatever reason it might be, AMZ is willing to refund any qualified order that falls under this guarantee. This makes shopping on the website less troublesome for most consumers.
In contrast to AMZ, the policy practiced by eBay is much more different. When it comes to returning items, doing exchanges, and getting refunds, the process is much more complicated.
For example, some sellers can easily add a “No Return” policy on their listings, which makes returns nearly impossible. Aside from that, refunds are often processed through a third-party payment system also known as Paypal.
The processing in Paypal can take days, weeks, and sometimes even months to push through. They sometimes even ask for proof of purchase, such as screenshots, to make sure that you are indeed worthy of being compensated. This, along with so many things, makes returns and refunds on eBay worse compared to AMZ.
As a seller, ticking the “No Returns” policy on eBay sends the wrong signal to your customers. It can easily lead to a negative impact on your overall customer service. On the other hand, AMZ’s “A to Z guarantee” sends a lot of positive signals to your potential buyers. Knowing they can easily return what they bought for whatever reason makes them more empowered.
Thus, when it comes to the overall customer trust rating of the platform, AMZ wins hands down. Selling on Amazon vs eBay can be decided simply by looking at how customers view each respective website.
Availability of Different Fulfillment Methods
Selling on Amazon vs. eBay is also affected by the fulfillment methods available on each platform. When selling on the eBay platform, there is only one fulfillment method available. And it is the “do it yourself” fulfillment method. When a customer makes an order, you pick, pack, and ship all the orders yourself. You can hire a third-party fulfillment service to make your life easier. But the eBay platform doesn’t provide it on its own as a unique service.
Conversely, AMZ has a much more flexible fulfillment option available to its third-party sellers. First of all, AMZ also offers a self-fulfillment method called FBM (fulfillment by merchant). Under the FBM fulfillment model, the sellers are the ones who manage and fulfill all of their customer’s orders. It is pretty much the same as eBay’s default fulfillment service.
But what’s unique about AMZ is the FBA fulfillment method that it offers alongside FBM. Under this model, third-party sellers can utilize and leverage AMZ’s logistic network and delivery service.
This is usually how Amazon FBA works. First, third-party sellers send all of their inventory to their designated AMZ fulfillment center. Then, when a customer purchases an order from the seller’s store, AMZ employees pick up and pack the order. After ensuring the package is secure, AMZ sends the order to the customers using their courier and delivery networks. Through this method, sellers can eliminate the hassle of fulfilling customers’ orders.
This can help them focus on other more important tasks such as marketing and improving their products. Subscribing on FBA also opens up more opportunities for third-party sellers. Some of these are being able to sell on Prime Customers and being able to win the coveted Buy Box. Both of these can help boost sales and increase conversion rates, which is a great advantage for sellers.
Regarding fulfillment methods, AMZ still has an advantage over eBay because of its unique FBA offering. This FBA offering changes the dynamics of selling on AMZ, which is why more sellers, huge brands, prefer selling on AMZ. When selling on Amazon vs. eBay, the better fulfillment options affect sellers’ decisions.
Cost of Selling on Amazon vs eBay
When it comes to selling fees, there are also different payments incurred when selling on each platform. To help you decide which between selling on Amazon vs. eBay is better for your business, listed below are some of each respective site’s fees:
eBay Fees
The fees incurred on eBay are generally lower compared to that of AMZ. Below are some of these fees:
Insertion Fee
These are the fees that are charged whenever a seller creates a listing on the website. Generally, eBay offers 50 free insertion fee listings every month. This is a great boost for beginners who just want to test waters before diving head-first in the platform.
Final value fee
eBay takes a chunk out of your earnings whenever you make a sale. This fee is percentage-based and based on the product’s final sale price. Shipping and handling are already included in the calculation of the final value fee, but sales tax isn’t included in the calculations yet.
Optional Listing upgrades
There might be times when a normal listing won’t suffice. If you want to add optional listing upgrades to make your listings stand out, this requires additional fees too. These fees include adding subtitles, setting a minimum reserve price on biddings, adding highlighted bold fonts, and so on.
If you plan to sell on the platform, you can use this eBay fee calculator to check how much the costs would add up before actually listing your products. This can save you a lot of time and money that otherwise would be wasted.
Amazon Fees
If you plan to use AMZ as your platform of choice, there are also several fees that you need to be aware of. Selling on Amazon vs. eBay is almost identical when it comes to the fees involved, except for the special FBA costs incurred by sellers using the AMZ platform.
Listed below are some of the fees on AMZ:
Seller Account Fees
If you become an individual seller on AMZ, you won’t have to pay anything to get your account started. However, you need to pay AMZ a fee of $0.99 per item sold, and you only have a limit of 40 items to sell per month. On the other hand, there is also a Professional seller account that you can use if you want to unlock more features. The individual seller account costs around $39.99 per month. However, you don’t need to pay an extra $0.99 per item sold if you register as an Individual seller account.
If you are serious about how to become a seller on Amazon, selling as a Professional Seller is highly recommended. You can unlock more features such as the ability to sell restricted items, use third-party tools, use APIs, and so much more. Plus, you don’t have a limit on the amount and number of items you want to sell per month.
Referral Fees
Like eBay, AMZ also takes a small percentage or a “cut” whenever an item is sold on their platform. In short, all third-party sellers pay a percentage of their item’s total price, also known as referral fees. These fees are quite different from the ones you still have to pay when signing up as an individual seller account. You still have to pay the $0.99 percentage per item sold plus referral fees if you are not selling under a professional seller account.
The amount of referral fee that you must pay will always depend on what kind of products you are selling. On average, this amount can be anywhere from 5% up to 20%. Using a Referral Fee calculator can help you accurately predict how much would be your tentative referral fee for your products.
FBA Fulfillment Fees
If you choose to use FBA as your fulfillment option, there are several fees that you must make too. Amazon charges fees for every service that it provides. This includes picking, packing, and shipping orders to your customers. Aside from this, AMZ also covers the provision of customer service when you use FBA as your fulfillment method. This is great because you won’t have to worry about answering queries, processing returns, and issuing refunds anymore.
The amount of fulfillment fees you must pay for your products is determined by the type of product you sell. The category, size, and overall weight of your product contribute to your final fulfillment costs. To give you an idea, the base shipping fee usually starts at around $2.7 per item. This fee is applied every time you make a sale. The total rate increases depending on your product’s weight, size, and category. You can accurately determine this by double-checking this FBA fulfillment calculator chart.
You should also note that certain additional fees will be applied to some items. These items require extra handling and care, which means higher costs for you. Examples of these are items containing lithium batteries, large refrigerators, or televisions with a screen size over 42 inches.
Storage Fees
If you use FBA, you also have to pay AMZ a certain fee to store your inventory in their warehouse. Since your items will consume space in their fulfillment centers, you must also pay for them. Storage fees are divided into two types: monthly storage fees and long-term storage fees.
Monthly storage fees are those charged by AMZ every month that you use their warehouse. Depending on what month it is, these fees can increase or decrease depending on the demand for the use of space during certain peak seasons. To know how much the storage fees costs on FBA, you can refer to this inventory storage fee chart.
If your product is unsold for more than 360 days, then your product will start to incur long-term storage fees. This monthly long-term storage fee is added to your monthly inventory storage fee. This means you are paying twice for your storage space, which can drain your funds. For this reason, it is often better to sell your products quickly than have them accumulate long-term storage fees in the fulfillment centers.
When it comes to fees in selling on Amazon vs eBay, it is fairly easy to see that AMZ has a lot more fees compared to other selling platforms.
Auction Selling Model
This is a straight-up win for the eBay platform. Since AMZ only offers a BIN (buy it now) type of listing, you cannot list a product for auction or bidding. However, since AMZ tries to make sure they are price-matching the lowest prices on any marketplace, it is fair to assume that you can still consistently find low-priced items on the platform.
eBay, on the other hand, offers an auction or bidding format for its listings. Sellers can put a timer to specify when the auction ends. They can also add a minimum reserve price on their auctions to ensure they’ll get the minimum price they want on a specific item. If the bidding ends and it doesn’t reach the minimum reserve price, it is automatically void and canceled.
When it comes to auction selling on Amazon vs eBay, the latter is the winner.
Selling on Etsy vs Amazon
Amazon and eBay are the largest online marketplaces to sell on. However, Etsy, a marketplace recognized predominantly for selling handmade products, is also gaining more popularity. Although the marketplace is not as busy as eBay and Amazon, sellers interested in showcasing their creative abilities often wonder about the pros and cons of selling on Etsy vs. Amazon.
Since Amazon and eBay do not focus on handmade products, sellers who want to create handmade or vintage products prefer to sell them on Etsy. In the past, the ‘selling on Etsy vs. Amazon’ debate was inexistent among sellers who wanted to sell handmade products because Etsy was the go-to. However, since the launch of the Amazon Handmade platform in 2015, more sellers are starting to weigh their options. This is because Amazon’s share of the eCommerce marketplace is considerably larger than Etsy’s.
Amazon has over 300 million customers while Etsy has about 81.9 million customers, and that’s a wide gap. Also, AMZ’s 300 million customers are on the platform for various reasons, while Etsy’s customers go there solely for handmade goods. So, if you want a niched-down marketplace for handcrafted goods, then you should sell on Etsy.
There are many other things to consider when deciding between selling on Etsy vs. Amazon, selling fees, and order fulfillment, for instance. Also, check out the pros and cons of selling on both platforms before settling for one.
Conclusion: Should I Sell on eBay or Amazon?
Many factors can affect your decision regarding selling on Amazon vs. eBay. From the listing fees to the selling formats, and the fulfillment options, sellers must decide what works best for their business. Most big brands and sellers flock to AMZ because of its better customer service experience.
With AMZ, sellers are assured that not only their customers but also their stores are well taken care of. However, the final decision regarding selling on Amazon vs. eBay is still up to your discretion. So, if you’re wondering, “Should I sell on eBay or Amazon?”, be sure to weigh your options and do what’s best for your business.
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