E-commerce sellers now have many options for selling their products online. Shopify, Walmart and Etsy all provide sellers with the chance to sell their products online.
Amazon and eBay are two of the most popular platforms. You might want to sell on one of these online marketplaces, as they are the oldest and most popular.
How can you tell which one will work best for you?
Both have their merits, so let’s take a look at the differences between these marketplaces and see which one is best for you.
Are Amazon and eBay trusted by consumers?
Both Amazon and eBay have been around since mid-1990s. Amazon launched under the name Cadabra in July 1994. It changed its trade name in 1995 to Amazon. eBay followed suit in September 1995.
Amazon is a strong competitor in consumer trust. Amazon is so determined to win and maintain the trust of customers that it has included in its vision, mission, values.
This focus seems to be paying off. According to a survey conducted in the United States, 73% of consumers consider Amazon a good company.
Amazon is known for its ease of returning products. Amazon’s A-Z Guarantee guarantees that customers will receive a full refund if the product is not as described or delivered on time.
eBay’s return policy for items is more complicated than that of Amazon. They will not accept returns or give full refunds. Sellers can also tick eBay’s “No Returns” box. This leaves buyers without recourse if they are not satisfied with the product.
You may believe that selling is a good thing. It can actually be very detrimental to your business.
Setting your listing to “No Returns” sends signals to potential buyers that you don’t believe in what you are selling. What types of businesses are you willing to buy from as a customer? Do you prefer those who support you after purchase or those that take your money and run?
Amazon provides support after purchase to build brand loyalty and give buyers the security they need so they feel confident taking a chance with a product that they may not otherwise buy.
You also get the benefit of trust as a seller through their platform.
Fulfillment methods for Amazon vs. eBay
You have two options when it comes to fulfilling orders for eBay sellers: either pack and ship your own orders or hire a third party fulfillment center to do so.
Amazon offers two options. You can either fulfill your orders yourself (Fulfillment By Merchant; FBM), or you can have Amazon fulfill them for you (Fulfillment Amazon; FBA).
Amazon FBA is the real difference.
Amazon allows sellers to manage a large portion of their business, while eBay requires them to do so.
They can store, pick, pack, and ship your products for you. And don’t forget about returns and refunds! Amazon gives you the opportunity to focus on other aspects of your business.
Amazon FBA is also a time-saver.
Amazon charges more if you use their FBA program for fulfillment of your orders. However, the cost difference is significantly lower when you consider the cost of shipping, packaging, and storing your products.
It is up to you how you fulfill your products. It’s nice to have the option to make your own decisions, something that you won’t get if you sell on eBay.
How much does it cost to sell on Amazon or eBay?
The fees charged by eBay are generally lower than those charged by Amazon.
These are the fees that you’ll have to pay when selling on eBay
- Insertion fees are the charges a seller pays to create a listing. eBay states that sellers receive 50 zero (free) listings for insertion fees each month. There are also options for additional listings if you have a store.
- Final value fees: eBay charges a percentage based upon the final sale price of your product. This does not include shipping and handling.
This is the basic “Final Value” fee schedule for most items. It also includes the appropriate “Insertion fees”.
- Processing fees for eBay’s managed payments system: As eBay requires sellers to use their managed payment system, this fee is added to the ‘Final Value’ fee.
- Additional listing upgrade fees: These charges are only applicable if you wish to create a unique, distinctive listing. You can add a subtitle or bold font to your listing, as well as setting a minimum/reserved price.
The fees for listing upgrades on eBay quickly add up. You can calculate how much you will need to pay to list your product on eBay by using the fee calculator.
eBay charges $5.02 for a product with a fixed price of $22.95 in its Baby & Toddler Clothing category. We would also have to pay shipping costs if we wanted to offer free shipping.
However, eBay’s fees for selling are lower than Amazon’s overall.
Amazon charges fees based on the product sold and its fulfillment method (FBA or FBM).
Let’s look at one of our Million Dollar Case Study products (MDCS), Washable Pee Pads, to get an idea about the fees associated selling a product FBA.
Jungle Snugs currently sells for $32.99. Amazon’s FBA calculator can be used to calculate the fees for selling the pee pad FBA or FBM.
Not shipping included in the total cost of ‘Your Fulfillment’ Shipping costs will be added to your profit margin if you sell FBM.
Selling FBM means that you will only be charged the Selling on Amazon’ fees. These include the Amazon Referral Fee and the Variable Closing Fee. FBA sellers are also responsible for these fees.
FBA sellers must pay an additional fee to Amazon for the ‘Selling on Amazon’ fees. This fee is based on the product’s weight and dimensions.
This fee includes ‘Monthly storage’ and a ‘Fulfillment’ fee.
If you sell a product on Amazon at $32.99, and you are an FBA seller you will need to pay $11.55 in fees. If you sell the same product at the same price as FBM sellers, you will need to pay $4.95 before shipping costs.
These are not the only fees that you will have to pay as an Amazon seller. No matter what fulfillment method you use, all Amazon sellers must pay these fees:
- You can choose from two types of seller accounts when you sell on Amazon: professional or individual. You will need to pay $0.99 per unit if you are selling as an individual. For professional sellers, however, a $39.99 monthly subscription fee is required.
- Refund Administration Fees: Although these fees are only applicable to customers who request a refund, it is important to note that Amazon charges for reimbursements. This fee will be either $5.00 or 20% of the refund charge, whichever is lower.
For more information about Amazon’s fees, click the link below:
Amazon Prime subscription
Amazon Prime is a key feature Amazon offers that eBay does not. This may not seem to be a benefit for shoppers, much like Amazon’s return policies, but it is the main reason Amazon has such an engaged customer base.
Amazon Prime subscribers are more likely to buy from Amazon because they pay a monthly fee for speedy delivery.
Loyal Prime members also shop at Amazon before shopping elsewhere online. They spend money on Amazon during major holidays, such as Black Friday or Prime Day.
Prime users number over 112,000,000 in the U.S., and over 150,000,000 worldwide. This means that sellers can immediately access a large audience who shop on the site frequently.
What products are you allowed to sell on Amazon and eBay?
eBay was launched in 1995 and has been a platform for other businesses to do business since then. Amazon hasn’t. Amazon has not. Instead, it has transformed into a retailer and a marketplace for third party sellers.
eBay does not restrict the products that can be sold on its site, unlike Amazon. eBay sellers can sell anything, from brand-new products to used and worn items. Illegal items are not allowed.
This is where eBay really shines.
People prefer eBay to Amazon when looking for second-hand goods. Its auction model makes it easy to sell used items and allows buyers to buy them at affordable prices.
Selling used books is the only exception. Amazon is, for the most part, the best marketplace for sellers looking to sell used books. This makes sense considering that Amazon was originally an online bookstore.
However, most shoppers prefer Amazon when they are looking for a brand-new item or one in perfect condition. Amazon is used by 66% of shoppers to search for new products.
Overall, Amazon is the best option to sell high-quality products with a ready-to buy audience.
You can also make your Amazon business more profitable by doing product research and finding the right supplier.
However, depending on the business model you choose, both platforms could work. It’s up to you to decide whether you want to start a business selling new products or second-hand goods. Maybe you plan to do both!
Amazon and eBay both have clear purposes for their respective types of customers.
Amazon or eBay? You have the choice
It’s time for you to make a decision. Amazon or eBay? Or both!
No matter which platform you choose, Amazon or eBay, there has never been a better moment to start your online business.