Selling on eBay and Amazon - 9 Points of Comparison
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 –You send your goods into Amazon in bulk and they handle the shipping, returns and customer service).
Amazon vs eBay - Nine Key Comparison Points
Many eBay sellers have wondered if it’s really worth selling on Amazon. Some feel there are too many rules and it wouldn’t be worth the effort. I’ve chosen a dozen points of comparison that may help sellers make a decision.
Amazon’s commission and FBA fees work out substantially higher than eBay’s, but we sell so much more on Amazon that we make more money overall.
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 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, and pays a higher average price for products.
Advantage: Auctions: eBay
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 rules change, or things don’t work, the systems break down and profit is lost.
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.
Advantage (especially for sellers): Amazon
Amazon restricts sellers from reaching out to buyers and marketing to them. eBay used to allow this but no longer does.
Recent changes at eBay have virtually eliminated the ability to use eBay as a lead generating tool for off-eBay business. eBay has all but 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
Marketplace sellers are responsible for the sales tax on any items sold on Amazon.com, and if necessary, they generally add this cost into the price of their items.
Both Amazon and eBay provides a mechanism to collect the taxes in addition to the sale price. This way the taxes don’t eat into the seller’s profits. But, although both sites will collect and pay the taxes to you, you are still responsible for filing and paying the taxes
Average Sale Price
Amazon buyers are affluent, and willing to spend more on similar items and are less bargain-hunter mentality. eBay buyers tend to look for bargains, and are willing to wait through an auction to save a buck or two.
Amazon sellers must use Amazon Payments to accept payment. That’s 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. (But they do take the credit card risk which PayPal does not)
eBay sellers can accept PayPal, and credit cards.
The big advantage of PayPal is I get my money faster
There are two ways to sell on Amazon – Merchant Fulfilled (you ship the item to the customer) 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 item’s category. This does not always cover the full shipping amount, but usually does. The amount 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. Since the shipping credit is fixed, it can be figured in when setting your price.
There is no question eBay is best for some items, while Amazon is best for others. But the overlap is incredibly large. The vast majority of items that sell on Amazon will also sell on eBay, and vice versa.
So which platform is best for you? Either way, I’d like to share with you what I’ve learned.
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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