Amazon vs. eBay - 11 Key Points of Comparison Between Selling on eBay and Amazon
By: Skip McGrath
I have been selling on Amazon since 2006 as a merchant fulfilled seller and in 2010 we moved into FBA. Since moving to FBA, our sales have grown almost 800% and we have been very profitable. (FBA means Fulfillment By Amazon Ė You send your goods into Amazon in bulk and they handle the shipping, returns and customer service).
I get a lot of questions asking me what are the differences between selling Ė and making money, on eBay versus selling on Amazon. We now make a lot more money on Amazon than we do on eBay, but we still sell in both venues.
Many eBay sellers have wondered if itís really worth selling on Amazon. Some feel there are too many rules and it wouldnít be worth the effort. Iíve chosen a eleven points of comparison that may help sellers make a decision.
#1 - Fees
Amazonís commission and FBA fees work out slightly higher than eBayís. If you use FBA Ė Fulfillment by Amazon, then the fees are higher still. But, we sell so much more on Amazon that we make more money overall.
#2 - Format (Auction vs. Fixed-price)
eBay Auctions are the best way to get market value for used, vintage and collectibles. eBay is better if you are selling unique items and want the best prices. But Amazon is the king of new products. The one exception is CDs, DVDs and used books which sell quite well on Amazon.
Amazon is the fixed-price king, but eBay has moved strongly in that direction by downplaying auctions and encouraging fixed-price listings. The advantage is in the buyers. The Amazon buyer is more affluent, an impulse shopper and pays a higher average price for products.
Advantage: Auctions: eBay
#3 - Fulfillment by Amazon (FBA)
A few years ago, eBay experimented with the idea of a warehouse that eBay sellers could send their goods to, and the warehouse would drop ship them to the sellerís customers for them.
The first warehouses were simply contracted with eBay Ėand when that didnít work, eBay tried purchasing their own warehouses. But, that didnít workout either, so after a period of about 2 years, eBay gave up, sold the warehouses and moved on.
Amazon has had its FBA program in force since 2006. Here is how it works and some of the advantages:
#4 - Stability
Online retailers rely on the stability of their chosen platforms to operate smoothly. Changes cost time (and time is money). Sellers have developed systems that allow them to list, sell, and deliver items. When policies and rules change, or things donít work, the systems break down and profit is lost.
Amazon has had very few major changes in the past few years, compared to eBay Ėand even those are fairly minor.
Even though Amazon has some restrictions, they generally stay the same, and are enforced consistently. When changes have been made, they tend to stick and sellers can adjust.
eBay makes major changes twice yearly, including Feedback, fees, how the search engine works, digitally delivered items, search results, Detailed Seller Ratings, and more are to be expected.
eBay makes their major changes every Spring and Fall. †Sellers have been greatly affected in real and perceived ways. Some changes have been rolled out, only to be reversed causing even more consternation among sellers.
#5 - Feedback
Both eBay and Amazon have a feedback system allowing buyers and sellers to record their impression of a transaction. Both sites allow buyers to leave negative comments for sellers. Both sites only allow sellers to leave only positive comments for buyers. However, sellers rarely leave feedback comments for buyers Ėand Amazon buyers donít really expect it.
The eBay culture has given much more weight to feedback than their Amazon counterpart. Amazon buyers can see the sellerís feedback score, but tend to overlook it more often than eBay buyers.
Amazonís A-Z Guarantee may have a bearing on this by making the buyer feel more protected when purchasing an item.
Amazon does not "disadvantage" sellers, as eBay does, by moving them down in the results when shoppers perform a search. eBay does this by considering the sellerís feedback score and making them less visible to shoppers, rather than letting buyers make the choice themselves. (However, if your feedback becomes really bad on Amazon they may suspend your account.
The other factor is ease of getting feedback removed. In this regard Amazon is much more flexible than eBay.
#6 - Branding
Both eBay and Amazon restricts sellers from reaching out to buyers and marketing to them directly (off the platform).
Recent changes at eBay have virtually eliminated the ability to use eBay as a lead generating tool for off-eBay business. eBay has forbidden any outside links from any eBay pages including custom store pages, and About Me pages. This has effectively neutralized eBay as a "branding" tool.
A new technique on Amazon (and you can do it on eBay too) is private labeling. You create a product and put your own private label on it. This way you always own the buy box on Amazon. And, if you do this, you can register your brand with Amazon to protect you.
#7 - Taxes
Marketplace sellers are responsible for the sales tax on any items sold on both eBay and Amazon. eBay makes the collection of sales tax more voluntary than Amazon. When you set up sales tax on each site, they (both) add the sales tax to the price of the items, collect it from the seller and disburse it to you.
Neither of them, however, will file and pay the sales tax for you.
Because both Amazon and eBay provide a mechanism to collect the taxes in addition to the sale price. This way the taxes are paid by the buyer and donít eat into the sellerís profits. †But, although both sites will collect and pay the taxes to you, you are still responsible for filing and paying the taxes.
#8 - Average Sale Price
Amazon buyers tend to be more affluent, and willing to spend more on similar items, and have less of the bargain-hunter mentality.
eBay buyers tend to look for bargains, and are willing to wait through an auction to save a few bucks.
As a seller, Iíll pick the buyer that is willing to spend more. I have actually used eBay to source products at rock-bottom prices, that sold for good profit on Amazon. Amazon buyers often donít even look on eBay, and they ultimately pay more.
#9 - Payment Methods
Amazon sellers must use Amazon Payments to accept payment. Thatís it. Amazon collects the payment, and deposits it into your bank account twice per month. They collect and deposit the funds with no fees added. And, they take the credit card risk which PayPal does not.
eBay sellers can accept PayPal, and credit cards if they have their own merchant account.
Amazon sellers do not have to send invoices, payment reminders, or track unpaid items. If Amazon cannot collect the payment, you donít have a sale, you donít have to ship, and your item is still listed on their site.
eBayís system is simply more work, more time, and ultimately costs more to manage as a seller.
The big advantage of PayPal is I get my money faster
Advantage: Slightly Amazon
#10 - Shipping Cost
There are two ways to sell on Amazon Ė Merchant Fulfilled (you ship the item to the customer, same as eBay) or FBA (You ship your items to Amazon and they handle the shipping and customer service).
If you Merchant fulfill, Amazon gives sellers a "shipping credit", based on an itemís category, size and weight.
The credit does not always cover the full shipping amount, but usually does. (The other thing Amazon does is pass their low negotiated rates onto sellers to save you money on shipping).
The shipping credit is fixed by Amazon. You cannot ask for more from the customer, and even if the shipping credit does not cover your shipping costs, you must ship the item at that price. The buyer pays the shipping (up to the maximum of the shipping credit). Sellers on Amazon cannot raise the shipping amount, but they also have the ability to cut shipping prices right down to free.
Which is better? I like to have control over my shipping. But if a seller is careful, itís pretty easy to figure in the shipping credit on Amazon and not lose money.
Even if there is a loss, itís minimal. (And on some items I actually make a little money on the Amazon shipping credit so it tends to even out over time)
I have found items I wanted on eBay, only to leave because of the outrageous shipping charges. ($1.99 item + $10.99 shipping for a cell phone cover). I go straight to Amazon, because I know shipping is standard and I wonít feel ripped off. How many other buyers do the same? Iíll take those buyersÖ
#11 - Market Share
A few years ago eBay dominated the online shopping market. That has changed.
Amazon now dominates online selling Ėand has consistently been voted the most trusted shopping site on the Internet. This means simply that you will sell far more on Amazon, than you will on eBay.
There is no question eBay is best for some items, while Amazon is best for others. In general, eBay is best for used and vintage items.
But the overlap is incredibly large. The vast majority of items that sell on Amazon will also sell on eBay, and vice versa., except Amazon outsells most of those items.
The important thing to remember is the shoppers are different. While you and I may shop on several sites, many Amazon shoppers are very loyal to Amazon and wonít even visit eBay. Some eBayers feel it would be a sin to shop on Amazon. By selling on both sites, you are potentially getting millions of additional eyeballs on your products.
If you are avoiding Amazon because you think there are too many rules Ė take a look at eBayís User Agreement. eBay is moving closer to Amazonís model, in many ways. Like it or not, this is the wave of the future. Will you be ahead of the game, or will you be playing catch-up?
As for me Ė I sell on both sites. eBay may only represent 15% of my profits, but I am not ready to give that 15% up. There are several third party services that make it easy to list both on eBay and Amazon. So why not?
So which platform is best for you? Either way, Iíd like to share with you what Iíve learned.
PLEASE NOTE: Do not buy both books because there is a lot of duplication in them. If you want to sell on eBay and Amazon both, please use the Contact Us form to ask which one you should select and what other books we recommend.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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