With the pandemic changing the way most people shop online, it’s very easy for entrepreneurs to offer their products online. Whether you plan to sell on Shopify, Etsy, Walmart, or any other marketplace, accessing a wider customer base has never been easier. Having said that, the two biggest marketplaces are still Amazon and eBay.
The Selling on Amazon vs eBay comparison has been an age-long debate among new and existing sellers. Is Amazon better than eBay? Should I choose eBay over Amazon? You’ll get your answers if you read to the end.
These two platforms are not only the oldest, but they also get the largest share of the global ecommerce retail market. Thus, it only makes sense for sellers to ask which one is better between selling on Amazon vs. eBay.
There are many reasons why you would consider choosing one platform over the other, and that is understandable. However, before making a final decision to launch your ecommerce business on either marketplace, you should weigh your options well.
Ready to dive into this guide to selling on Amazon vs eBay? Let’s get right into it.
Amazon vs eBay: Based on Consumer Trust
Do Customers Trust Amazon?
When it comes to running a successful ecommerce business, gaining customers’ trust is essential. Remember, online shoppers have to make tough purchasing decisions. They buy products without seeing them physically. Amazon and eBay customers have to rely on images, descriptions, videos, and product reviews to justify their purchase. So, if you sell on a marketplace that customers trust, you’re more likely to make sales.
When it comes to customer trust, both Amazon 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 Amazon edges eBay in a head-to-head matchup. This might be a result of AMZN’s obsession with customer service—to the point that they are willing to refund some orders with no questions asked.
AMZN is well-known for its “A-to-Z guarantee” which allows customers to return items and get a full refund if they are dissatisfied. Orders can be returned based on the quality of the product, delayed shipping times, etc. But whatever the reason might be, AMZN is willing to refund orders that qualify for this guarantee. This makes shopping on the website less risky for most shoppers.
Do Customers Trust eBay?
eBay also has a significant amount of traffic. This goes to show that eBay shoppers also trust the platform to a large extent. However, unlike Amazon, eBay is not so flexible. When it comes to returning items, doing exchanges, and getting refunds, the process is much more complicated.
For example, eBay sellers can easily add a “No Return” policy to their listings. This makes returns nearly impossible. Aside from that, refunds are often processed through PayPal; a third-party payment system.
Sometimes, PayPal fees or payment processing may take days, weeks, or 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 many other things, makes customers less likely to shop on eBay.
As an eBay seller, ticking the “No Returns” policy sends the wrong signal to your customers and can have a negative impact on your overall customer rating. On the other hand, AMZN’s “A to Z guarantee” sends positive signals to your potential buyers. Knowing they can easily return what they bought for whatever reason makes them more likely to shop.
But platforms have a vast customer base and offer massive potential for entrepreneurs who are just getting into the online world. However, third party sellers who want to increase their chances of success should consider customer trust when choosing a marketplace.
When it comes to the overall customer trust rating, Amazon wins hands down. Before making a final decision on selling on Amazon vs eBay, observe how customers view each marketplace.
Availability of Different Fulfillment Methods
When you’re trying to decide whether you should set up an Amazon or eBay store, consider the fulfillment options available to you. Your choice of a marketplace should be influenced by the fulfillment methods available.
eBay Shipping and Fulfillment Options
When it comes to order fulfillment, eBay uses a do-it-yourself approach. So, sellers will have to store, pick, pack, and ship orders themselves. Of course, most eBay sellers hire logistics firms to ease the stress of order fulfillment, but eBay does not provide order fulfillment services.
eBay sellers who have multiple commitments and do not have enough time to fulfill orders, may struggle to scale their businesses. Also, as a result of the stiff fulfillment option, eBay customers are unlikely to get their orders on time.
Amazon Shipping and Fulfillment Options
Unlike eBay, Amazon offers two fulfillment options. Amazon sellers can choose to fulfill orders through FBA (Fulfillment by Amazon) or FBM (Fulfillment by Merchant).
Under the Fulfillment by Amazon model, sellers can outsource all their shipping and fulfillment needs to AMZN. Amazon will store, pack, and ship orders on behalf of sellers who use the FBA model. They will also provide 24/7 customer service and handle returns processing for sellers. All you’ll have to do is send your inventory to a designated fulfillment center, and they’ll take it from there.
In contrast, Amazon sellers who use the FBM model will have to store and ship orders themselves. Obviously, self-fulfillment via FBM would be more stressful than shipping through Amazon FBA.
By outsourcing fulfillment to AMZN, Amazon FBA sellers will have more time to focus on scaling their businesses by marketing and improving their products. Amazon FBA sellers also enjoy some other perks. These perks include being able to sell to Prime customers and increased chances of winning the coveted Buy Box. Both of these can help boost sales and increase conversion rates, which is a great advantage for sellers.
In our opinion, AMZN has a competitive advantage over eBay because of its unique FBA offering. By offering the option of outsourcing, AMZN has made more room for busy entrepreneurs who want to run side hustles to join the platform.
If you have multiple commitments and do want to waste time on order fulfillment, or you would like to cut down on shipping costs, Amazon FBA would be a better option.
If you still decide to run an eBay store, you should consider using the Amazon FBA multichannel fulfillment option. In a bid to reduce shipping fees, many eBay sellers use the service to ship orders to customers across the world.
The Cost of Selling on Amazon vs eBay
Neither of these marketplaces is free, so you will incur selling fees regardless of the platform you choose. eBay selling fees are relatively lower than Amazon fees. And if you decide to sell through FBA, you will have to pay more seller fees.
To help you make an informed decision on selling on Amazon vs. eBay, we have outlined the seller fees on each platform below.
Insertion fees are deducted every month when sellers create listings on the platform. Listing products on eBay is free for the most part. But if you list more than 250 products per month, a $0.35 insertion fee per listing will be deducted from your eBay account. This is a great boost for beginners who just want to test the waters before building their own brand on the platform.
Final value fee
Final value fees are a commission that sellers have to pay after each sale. In other words, eBay takes a chunk out of your earnings or, better put, they deduct a commission from your eBay account whenever you make a sale. Final value fees are percentage-based and based on the product’s final sale price. For most categories, the final value fee is 12.9% of the sale price or less, plus $0.30 per order.
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. You’ll have to pay for adding subtitles, setting a minimum reserve price on bidding, adding highlighted bold fonts, and so on.
If you plan to sell on eBay, 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 would otherwise be wasted.
Selling Plan Fees
The first step to setting up an Amazon business is to create a seller account. To do this, you will have to choose a seller plan. Amazon offers two selling plans: an individual selling plan and a professional selling plan. Regardless of the plan you choose, you will not have to pay any upfront costs. However, you will have to pay selling fees once you start to make sales. Selling fees are just like subscription fees.
An individual seller account allows you to sell a maximum of 40 items, and it costs only $0.99 per sale. On the other hand, the professional seller account allows you to sell more than 40 items every month. Professional sellers will have to pay a fixed price of $39.99 per month.
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 selling plan fees. You’ll have to pay your selling plan fees plus referral fees.
Referral fees vary by category, and the percentage you’ll have to pay will depend on what kind of products you are selling. On average, this amount can be anywhere from 8% up to 45%. However, for most categories, the referral fee can be anywhere from 8 –15%.
Amazon updates their referral costs every year. So, you should stay updated on the new prices.
FBA Fulfillment Fees
If you choose to use the Fulfillment by Amazon option, you will have to pay for the fulfillment services. Amazon fulfillment fees are usually 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 cost increases depending on your product’s weight, size, and category.
You should also note that the cost of fulfillment is higher for heavy and bulky 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 of over 42 inches.
Like referral costs, fulfillment fees are updated annually. So, to get a good idea of how much you need to start your business, you should use the current fulfillment costs.
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 have an idea of your inventory storage costs, you can refer to this inventory storage fee chart.
If your product is unsold for more than 360 days, it will start to incur long-term storage fees. In this case, you will have to pay both the regular monthly fee in addition to the long-term 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 the costs for selling on Amazon vs eBay, it is fairly easy to see that AMZN has a lot more fees compared to other selling platforms.
Auction Selling Model
This is a straight-up win for the eBay platform. Since AMZN uses a BIN (buy-it-now) shopping approach, you cannot list a product for auction or bidding. However, since AMZN 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, uses an auction or bidding style for its listings. Sellers can set a timer to specify when the auction ends. They can also add a minimum reserve price to 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.
So, Amazon vs eBay based on auction selling, eBay is the winner.
Selling on Etsy vs Amazon
Etsy is known predominantly for selling handmade products. Although not as popular as Amazon and eBay, the platform is also gaining more popularity. Since Etsy is not as busy as eBay and Amazon, sellers interested in showcasing their creative abilities often compare 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, AMZN’s 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. For instance, selling fees, and order fulfillment methods. 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 fulfillment options, sellers must decide what works best for their business. Most big brands flock to AMZN because of its better customer service.
However, the final decision regarding selling on Amazon vs. eBay is still based on 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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