If you want to learn the difference between selling on Amazon and selling on eBay, this blog post is for you.
From user demographics to fee structures and shipping logistics, we put Amazon and eBay head-to-head to determine which platform could give your business the edge.
Dive in and find out which marketplace aligns with your business goals.
Amazon and eBay at a Glance
When considering a partnership or platform for your business, knowing the history of the companies involved can give you context and insights to help your decision-making process.
Here's a brief history of Amazon and eBay, two of the most influential players in the ecommerce space.
Amazon: The Rise of a Retail Giant
Amazon began as a simple idea from Jeff Bezos: to create an online bookstore that could offer more titles than a physical store. In 1994, Bezos left his job on Wall Street and started Amazon in his garage in Bellevue, Washington. The company was originally named Cadabra, Inc., but was soon renamed Amazon after the largest river by volume, reflecting Bezos's vision for its size and reach.
Amazon's growth was steady and strategic. It went public in 1997, with shares initially priced at $18. By the end of 2001, Amazon reported its first profit, earning $0.01 per share on revenues exceeding $1 billion.
Over the years, Amazon expanded its offerings well beyond books and has grown into a global force with over 1.5 million employees and a significant market capitalization.
eBay: Connecting Buyers and Sellers Worldwide
eBay's story started in 1995 when Pierre Omidyar created AuctionWeb, a site dedicated to bringing together honest buyers and sellers in an open marketplace. The first item sold was a broken laser pointer, which set the tone for a platform that would become known for its wide range of unique and everyday items.
The company quickly grew, and by 1997, it had rebranded as eBay and went public. The initial stock price of $18 jumped to $53.50 on the first day, highlighting the market's confidence in its potential. eBay has since evolved into a global marketplace with a diverse set of offerings and a commitment to creating a safe and trustworthy environment for its users.
As of the latest data, eBay's share price and market cap reflect its established position in the ecommerce industry.
User Base and Traffic: A Comparative Snapshot
The size and dynamics of a platform's user base are critical indicators of its reach and influence in the ecommerce landscape.
Here's how Amazon and eBay stack up in terms of users and traffic.
Amazon: A Broad Reach
Amazon boasts a substantial user base, with Techreport highlighting that the platform has attracted over 310 million users and houses 2.5 million sellers. A significant portion of these users, 60%, are male, predominantly within the 25 to 34 age bracket. This demographic insight is crucial for sellers targeting their products and marketing efforts.
In terms of revenue, North America is Amazon's stronghold, contributing 62% to its earnings with a staggering $514 billion. The year 2022 alone saw revenues of $315.88 billion from this region, underscoring Amazon's dominance in the North American market.
eBay: Global Engagement
eBay, on the other hand, has a global buyer base of 132 million active users, as reported by the Statista Research Department. This figure represents a slight decrease of 4.3% from the previous year's 138 million. Despite this dip, the platform's engagement remains robust, with more than 10 million app downloads recorded in 2022.
The United States leads as eBay's largest market, followed closely by the United Kingdom and Germany. The app's popularity is evident, with over 2 million downloads in the U.S. alone during the same period.
Selling Fees: Amazon Charges Less Fees Than eBay
For online sellers, understanding the fee structure of a platform can significantly impact your profit margins. Let's break down the selling fees for Amazon and eBay to see which might offer the better deal for your business.
Amazon: A Tiered Fee Structure
Amazon offers two main types of seller accounts: Individual and Professional. Individual sellers pay $0.99 per item sold, while Professional sellers opt for a monthly subscription fee of $39.99, which doesn't include per-item fees. Additionally, Amazon charges referral fees, typically around 10% of the sale price, varying by category.
For media items, Amazon has a closing fee of $1.80 per item, covering books, DVDs, music, and certain electronics. High-volume sellers also face a listing fee of $0.001 per SKU after the first 1.5 million free SKUs, which supports the system costs of maintaining a vast catalog.
The final value fee on Amazon is a combination of a percentage of the item's price, capped at 13.25%, plus a fixed fee of $0.30 per order.
eBay: A Diverse Fee Range
eBay's fee structure is more varied, with monthly store subscriptions ranging from $7.95 to $349.95, depending on the level of service chosen. Referral fees on eBay also vary, falling between 6-9% based on the item's category.
Closing fees on eBay are a percentage of the total amount of the sale (TAOS), typically 12.9%, capped at a TAOS of $7,500, plus a fixed fee of $0.30 per order. Unlike Amazon, eBay offers up to 250 free listings per month, after which a fee of $0.35 is charged for each additional listing.
When comparing the two, Amazon's fee structure may seem more straightforward and potentially more cost-effective, especially for sellers who list a large number of SKUs or sell primarily in categories with lower referral fees.
Shipping and Fulfillment
In the realm of online selling, shipping and fulfillment are not just operational details—they're pivotal to customer satisfaction and, ultimately, to the success of your business.
Amazon: The FBA Advantage
Fulfillment by Amazon (FBA) is a service that, for a fee starting at $4 plus storage costs, takes the burden of shipping and fulfillment off the shoulders of sellers. While this fee might initially seem steep, it's important to weigh it against the convenience and potential sales boost provided by FBA. Self-fulfillment is an option for those looking to avoid these fees, but it comes with its own set of challenges.
When considering FBA, it's crucial to evaluate the risk-reward ratio. If the potential rewards—such as increased exposure through Prime eligibility and the time saved on logistics—outweigh the risks, it may be a worthwhile investment.
eBay: Flexible Shipping Partnerships
eBay, in contrast, does not offer a fulfillment service like FBA but has established strong partnerships with major carriers like the United States Postal Service, UPS, and FedEx. This network gives sellers a variety of shipping options and the ability to easily calculate shipping costs and print prepaid shipping labels from home.
While eBay may not provide the same level of fulfillment services as Amazon, the flexibility and control it offers can be advantageous for sellers who prefer to manage their shipping process directly.
Customer Reach and Marketing
Effective customer support and marketing are crucial for enhancing your business's performance. Remember, a satisfied customer is more likely to contribute to your bottom line.
Amazon: Leveraging Media for Maximum Impact
Amazon taps into the power of mainstream media, like using streaming TV ads to capture a wide audience. This approach is part of a broader marketing strategy that includes a network of publisher channels, as well as IMDb and IMDb TV for out-stream video ads—those placed outside of video content. These strategies are designed to maximize visibility both within and beyond the Amazon ecosystem.
eBay: Empowering Sellers With Tools
eBay's approach to supporting sellers is through practical tools like Seller Hub and eBaymag. Seller Hub offers a suite of resources that provide robust functionality at no extra cost, allowing sellers to manage listings and monitor the health of their business. eBaymag, another free tool, helps sellers list their products on eBay's international sites, offering automatic translation to cater to a global customer base.
Comparing Visibility and Support
When it comes to visibility, Amazon's extensive marketing channels offer a broad reach that can be highly beneficial for sellers looking to capture a wide audience. eBay's tools, while different in nature, are designed to empower sellers with the ability to manage and expand their business globally. Each platform offers unique advantages in customer reach and marketing; the choice depends on the seller's specific needs and goals.
Customer Service and Returns: Prioritizing the Consumer Experience
In the competitive world of ecommerce, customer service and efficient return policies are not just amenities—they're essential to maintaining customer loyalty and trust.
Amazon: The Customer-Centric Approach
Amazon's founder, Jeff Bezos, has famously prioritized customer satisfaction, symbolically including an empty chair at executive meetings to represent the customer's presence. This philosophy extends to Amazon's customer service ethos, where the focus is on swiftly addressing issues and communicating the steps being taken to resolve them. Amazon's commitment to clear communication has resulted in 72% of customer complaints on social media being responded to within an hour—a testament to their dedication to customer relations.
eBay: The Resolution Center
eBay handles disputes through its Resolution Center, where buyers and sellers are encouraged to communicate directly to resolve issues. The platform offers various options for resolution, including returns, refunds, partial refunds, item exchanges, or cancellations. While eBay provides a structured process for dispute resolution, it can take upwards of 90 days to resolve issues. However, if a dispute is settled in the seller's favor, they are not responsible for refund charges, including dispute fees.
Comparing Support Efficiency
Amazon's approach to customer service is designed for speed and efficiency, aiming to resolve issues promptly. eBay's process, while comprehensive, may require more time to reach a resolution. Sellers should consider these aspects when choosing a platform, as the level of support can significantly impact customer satisfaction and repeat business.
Pros and Cons: Weighing Your Options Between Amazon and eBay
Here's a straightforward look at what Amazon and eBay have to offer, as well as the challenges sellers might face.
Amazon Pros
- Amazon's vast user base includes over 240 million shoppers globally.
- Customers on Amazon are often there with the intent to purchase specific products.
- Even without paid advertising, Amazon's traffic is robust.
- There's no need for additional shop software when selling on Amazon.
- Fulfillment by Amazon (FBA) offers competitive shipping rates and access to Amazon's affiliate programs.
Amazon Cons
- Amazon's selling fees range between 7% and 20%, varying by product category.
- Shipping costs are often included in the price, which can lead to a pricing war among sellers.
- The competition on Amazon can be intense, potentially limiting visibility for your products.
eBay Pros
- eBay's auction format can drive prices up based on buyer demand.
- The platform is known for its strong search engine optimization (SEO) and generally lower fees.
- With 132 million active buyers, eBay's marketplace is vibrant and diverse.
- Sellers on eBay benefit from protections specific to the platform.
eBay Cons
- Sellers may incur fees on eBay even if their items don't sell.
- Your sales success can be heavily influenced by your reputation on the platform.
- Managing inventory on eBay can be complex due to the high level of competition.
- The platform is known to attract bargain hunters, which can affect pricing strategies.
- Tax structures and changes to eBay's policies can occur, impacting sellers without warning.
Both Amazon and eBay offer unique advantages and pose distinct challenges. Your choice will depend on your business model, product type, and personal preferences for managing online sales.
Conclusion: Making the Right Choice for Your Business
Deciding between Amazon and eBay involves more than just comparing fees; it's about understanding which platform aligns with your business goals and practices.
Here's a straightforward approach to making that choice:
- Analyze your monthly sales, average order prices, and seasonal trends to accurately forecast potential fees.
- Opt for logistics support and tools that enhance your operations, not just the basic offerings.
- Monitor your profit margins closely to ensure that after all fees are paid, your business remains profitable.
- Regularly reassess your strategy as your business evolves to ensure you're still on the most cost-effective platform.
Understanding each platform's pricing structure is key. This knowledge allows you to make informed financial decisions that will benefit your business in the long run. Both Amazon and eBay continuously strive to provide value and keep costs reasonable to attract and retain sellers.
Now, with all factors considered, it's time to decide: Which marketplace is the best fit for you—Amazon or eBay?
