Saturday, May 25, 2024

Amazon VS. eBay: A comprehensive comparison 2024

Despite their short one-year launch period, Amazon and eBay have grown to become two of the largest e-commerce companies. Which platform, though, ought to receive more of your attention as a business owner?

In this article you will learn:

  1. Which is larger, eBay or Amazon?
  2. Sales in the marketplace (in billions)
  3. Amazon or eBay: Which offers less competition for sellers?
  4. Amazon or eBay: Which makes shipping items easier?
  5. Amazon or eBay: Which is easier to manage?
  6. Amazon or eBay: Which has cheaper selling fees?
  7. Which Pays Out Faster, Amazon or eBay?
  8. Amazon or eBay: Which Has Cheaper Advertising Fees?
  9. Amazon or eBay: Which Is Better for Branding?
  10. Amazon Or eBay: Which Is Better For Sellers?
  11. Amazon or eBay: Which Offers Better Product Categories for Sellers?

Which is larger, eBay or Amazon?

The scale of Amazon’s marketplaces is much greater than that of eBay’s. eBay has 182 million users globally as of 2021, compared to over 200 million Prime members on Amazon.com.

It should come as no surprise that Amazon has substantially higher total revenue than eBay. For instance, eBay exceeded expectations in revenue during the third quarter of 2021 while Amazon failed to meet expectations. Nevertheless, during that time, eBay’s GMV was $19.5 billion, compared to Amazon’s $110.8 billion in revenue.

Since 2014, eBay’s annual revenue has remained essentially unchanged, whereas Amazon’s has almost tripled during this same period. Consequently, you should anticipate that Amazon will outsell eBay by a factor of ten.

Sales in the marketplace (in billions)

When I launched my boating brand, more than half of our sales came from eBay. eBay, however, accounted for far less than 30% of our sales when I sold the brand in 2016. In 2018, two years later, eBay accounted for far less than 10% of the overall sales of my new brand.

2019 saw eBay perform better than other websites, such as Walmart. But Walmart upped its game after the pandemic’s e-commerce boom, surpassing eBay to take the second place.

Amazon or eBay: Which Offers Less Competition for Sellers?

When it comes to disclosing information about their sellers, eBay and Amazon both exercise discretion.

On 2019 Amazon announced that it had 200,000 sellers making over $50,000 and 50,000 sellers making over $500,000. The company revealed in 2021 that 27,000 sellers in the US alone crossed the $500 million revenue threshold, and that the number of sellers surpassing $1 million in sales increased by almost 15%.

Because it has more serious and larger sellers than eBay, Amazon is a more competitive marketplace. More importantly, it’s less expensive because there is a lot less competition for advertising on eBay, as we’ll discuss in a moment.

Amazon or eBay: Which Makes Shipping Items Easier?

That being said, one of the most significant distinctions between eBay and Amazon may be the existence of Amazon’s Fulfilled by Amazon program, or FBA.

Sellers ship their goods to Amazon through Amazon FBA, and Amazon takes care of all fulfillment and shipping. This eliminates a ton of labor.

Shipping charges, both inbound and outbound, are the sellers’ responsibility. A seller in Seattle may occasionally ship their stock all the way to Florida. Sometimes, this is as costly and impractical as it sounds. However, because of Amazon’s deeply reduced shipping costs, the majority of sellers actually pay less overall.

You will also be accountable for the costly storage fees associated with Amazon FBA (up to $200 per month to store a pallet from October to December). Every year, there are fluctuations in these fees, with some changes being more substantial than others.

The possibility of creating sales tax nexus for sellers in numerous states, requiring them to collect and remit sales tax in those states, is a significant drawback of Amazon FBA.

Amazon or eBay: Which Is Easier to Manage?

eBay’s management style is a holdover from its previous heyday, when it dominated the secondhand goods market. eBay’s decentralized product management system is incredibly confusing. For the same exact Instapot, thousands of listings may exist.

Since eBay permits the use of HTML and CSS in listings, sellers are continuously competing with one another for the most advanced and attractive listings.

Unlike eBay, Amazon’s product management system is incredibly user-friendly. Every unique UPC (the bar codes you see on products) has only one listing. To make listings much simpler, Amazon essentially only permits photos and plain text product descriptions.

Amazon or eBay: Which has cheaper selling fees?

You have to select between the Individual and Professional seller plans before you can list anything on Amazon. Individual sellers pay $0.99 for each unit sold, while Professional sellers pay $39.99 per month regardless of how many units they sell.

On the other hand, eBay offers 250 free listings every month and charges $0.35 for each extra listing. The following options for store subscriptions are also available:

When selling on eBay, you should be aware that there are three additional costs to take into account in addition to the subscription fees: insertion (listing) fees, final value fees, and PayPal transaction fees (if applicable).

Additional optional costs include classified advertising, advanced listing upgrades, and auction listing fees.

eBay charges 2.35% on the portion of the sale over $7,500 and 12.55% on the total amount of the sale up to $7,500 calculated per item for the majority of categories. Usually, Amazon charges a 15% commission that covers the cost of processing payments.

If you use Amazon’s FBA program, however, you will also be charged outbound shipping fees in addition to inbound shipping costs.

We gave the example of a package that was 15 x 12 x 4 inches and cost $49.99. $15.96 was spent on eBay while $13.25 was spent on Amazon. Compared to eBay, Amazon’s fees were 20% lower.

Which Pays Out Faster, Amazon or eBay?

You want to be compensated for your products once you start selling them!

eBay exceeds Amazon in this regard when it comes to payment times. You get paid by eBay as soon as a buyer buys your item.

However, you don’t get paid by Amazon until the customer has made a purchase and the item has been shipped to them. Moreover, your funds are held for a duration of roughly two weeks.

Amazon or eBay: Which Has Cheaper Advertising Fees?

Pay-to-play marketplaces are progressively taking over eBay and Amazon. This implies that, in most cases, paying to have your listings show up at the top of search results is necessary.

But compared to eBay sellers, Amazon sellers rely much more on advertising.

We questioned five high-volume sellers in 2018 and discovered that 26.7%–60.6% of their sales came from advertising.

But as time has gone on, Amazon advertising costs have skyrocketed, and now pose one of the biggest risks to your Amazon business. According to a 2021 study by the Institute for Local Self-Reliance (ILSR), Amazon actually takes roughly two-thirds of sellers’ earnings, much of which is spent on advertisements, in order to finance its purported monopoly.

Although the majority of sellers don’t use any advertising at all, eBay has expanded what it refers to as promoted listings.

This adds an additional 7.5% to your selling fees if, like most Amazon sellers, you pay roughly 30% for your Average Cost of Sale (ACoS) and receive 25% of your sales from advertising.

Amazon or eBay: Which Is Better for Branding?

However, the primary drawback of Amazon is that it completely controls the customer.

Amazon keeps all of the customer’s personal information very secret, including their email address. By severely restricting the use of HTML and CSS, they also severely limit the amount of branding of your products that you can use.

eBay does not want you to drive users away from the site, but you do have a lot more power. For example, you can obtain the email address of your customers and use some branding on your store and listings.

In the past, we asked customers via email after they made a purchase if they would like to receive an incredibly relevant ebook by integrating Mailchimp with eBay. We would generate over 100 emails per month using this strategy. For this segment, our email list had an average transaction value of $200 and a conversion rate of about 1%. It was really worthwhile.

Amazon Or eBay: Which Is Better For Sellers?

eBay and Amazon prioritize the needs of their customers. But Amazon is usually more brutal. Customers are, after all, the main focus of its Flywheel Strategy.

Amazon has a bad reputation for suspending customers, frequently without giving them any notice or explanation. To help sellers get their accounts unsuspended, a whole cottage industry of “specialists” in account suspension has actually emerged. Amazon suspends your account right away, freezing your money and providing you with minimal information.

Amazon or eBay: Which Offers Better Product Categories for Sellers?

When there is consumer demand and the products are not discovered or bought on the spur of the moment, Amazon dominates almost every product category.

With eBay Motors (automotive, boating, etc.) and eBay Electronics, particularly with regard to electronics parts and accessories, eBay remains competitive. It continues to rule over secondhand goods, collectibles, and other unique items as well.

In general, eBay and Amazon are not the best places to get personalized goods like engraved items. None of them can match the level of support for customization that comes with having your own website, even though they both do offer some customized support for customized products.

Overview: Benefits and Drawbacks of Selling on Amazon and eBay

In general, eBay gives you more freedom to brand your items and store, along with greater tolerance for errors and/or subpar goods. A much smaller audience and no internal fulfillment are the costs.

Do you believe that for sellers, Amazon is the ideal sales channel? Please share your opinions to us!