Selling On Amazon vs. eBay Comparison

30 Jun, 2020

While there are plenty of third-party websites where you can sell your products these days, two of the easiest to use are eBay and Amazon. These online retailers became popular because they offer so many products at affordable prices, and they allow sellers to get started very quickly.

However, listing and managing your product on any website can get time-consuming, so many retailers only want to focus on selling their product on one. So, the question is, which one is going to give you the most benefit, selling on eBay, or selling on Amazon? Nowadays, we have IO Scout Listing Optimization tool, to optimize and managing your product listing. IO Scout tools really save your time and increase sales.

If you need to know which platform is the best for selling your products, where are here to help. We are going to take you through the key differences between Amazon and eBay so that you know which one is going to be the best choice for your business. Let’s get started on taking your business to the next level!

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Company Goodwill

The term “goodwill” refers to the amount of trust and respect consumers have with a brand. This is important as a seller because you are going to want to work with a company that buyers are going to come back to time and time again. You also don’t want to dedicate a lot of time to set up a shop on a website only to have that company enrage the public - causing your sales to plummet. 

Both companies, eBay and Amazon , are very well-established and trustworthy brands. You aren’t going to have to worry about either of them disappearing overnight. They both got started in the mid-’90s, but eBay was started with their current business model. Amazon’s evolved over time into what it is today.

Even though eBay has been selling all categories of products for many more years that Amazon, which originally started as a book dealer, Amazon tends to engender more goodwill than its main competitor in the seller marketplace. One of Amazon’s main leadership principles is “customer obsession,” which has served it well over the years.

Buyers love Amazon. That much is a fact. Their current stock prices amidst an economic downturn caused by COVID-19 confirms this fact.

One of the big advantages that Amazon has in terms of attracting buyers is that they have made online returns more simple than ever. All you have to do is choose which item you want to return, and take it to your local UPS store where they will scan a code, box, and ship it for you. Amazon guarantees that their buyers can get a full refund if they do not like the product upon receipt.

eBay, on the other hand, has taken a much different approach to returns. It can be very complicated to process returns and refunds on eBay, and many sellers even choose to not offer returns - which isn’t an option on Amazon’s website. For this reason, many buyers choose never to return to eBay after a bad experience, even though the problem may have been with a singular buyer and not with the company as a whole. 

While you may be thinking you would prefer eBay for this reason, as no one wants to process returns all the time, you should rethink that position. In fact, not offering quick and easy returns can hurt the “delight” phase of your marketing funnel and ultimately destroy your business.

When you do not process returns, buyers are going to believe that they can’t trust the product that they are buying from you. In fact, particularly for more expensive products, buyers want to also know that you are going to offer a warranty for any manufacturing defects. When you offer refunds and warranties - it proves that you as a seller truly believe in the product that you are selling. 

Conversely, Amazon is making sure that customers are loyal to their brand, and thereby yours. They want to make sure that a customer never feels as if there is a risk ordering from their website. When a customer has issues that are quickly and easily resolved by Amazon, they are more likely to come back time and again.

When you choose to sell on the Amazon marketplace, you are reaping the benefits of the goodwill that they have built around the world. Likewise, when you list on eBay, customers and potential customers may project bad experiences that they’ve had with other eBay sellers onto you unfairly, which is going to lose you money in the long run.

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How They Ship And Fulfill Orders?

eBay only offers one fulfillment solution to its sellers, which is that you are going to have to manage inventory, pack, and ship your items by yourself whenever new orders come in.

When you instead choose to sell on Amazon, you can fulfill order yourself or you can choose to have Amazon to fulfill orders for you. While this may be hard to do in the beginning - the second option is truly what you should aim for and is a good way to take your business sales to the next level. This is called Amazon FBA.

Amazon takes a lot of work off of your plate by warehousing, packing, and shipping your products for you, as well as processing the returns and refunds so that you don’t have to. This allows you to focus on your business and grow your product range and output.

We also love that the FBA service saves sellers money, not just time. While the fees look higher on paper, we have found that on average FBA sellers make higher margins as they do not have to pay for the labor, materials, warehouse, etc in order just to function.

However, you may be a small outfit, deal with vintage products that are one of a kind, or deal with things that are highly breakable. In these instances, you may not think that Amazon is going to be the best choice for you, and you’re probably right. 

Differences In Fee Structure

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We mentioned that Amazon’s FBA fees are higher than eBay’s fees. While it is important to keep total margin and service value in mind when choosing a platform, it is still important to discuss the price differential so you can ensure that being a seller on Amazon makes sense to you.

eBay fees

There are a few different fees you will have to pay on eBay while you are a seller there. This is how these seller fees work for the most part:

Insertion Fees

For each listing that you make on eBay, you will be charged a fee after your first 50 listings of the month, which are free. This is the fee a seller is charged when they create a listing on the site. 

Final Value Fees

Final value fees are charged every time you sell an item. While listing fees remain stagnant no matter what the cost of the item is, depending upon the business vertical, the final value thing is going to change depending upon what you sold and how much it was.

The final value fee is calculated best on what the product sold for and how much eBay believes their marketing efforts helped you make the sale. This fee is not passed along to the consumer, who is only charged normal shipping and handling, if applicable.

Payment Processing Fees

This is going to differ depending upon if you are a “managed payments” seller on eBay. If you use their managed payments, then this fee is included in what you pay as your final value fee. If not, then you will pay 2.9% of the selling price as a fee, plus $0.30. If you are going to sell on eBay, then you should use their managed payments system in order to increase your margins.

Listing Upgrade Fees - Optional

If you want your listing to stand out or be listed above the fold, there are fees that you can pay in order to make your listing stand out more from the rest of the competition for your product on the eBay website.

You can do things like adding a bolded font, subtitles and setting minimums when it comes to bidding. This will help you make more money when selling on eBay.

A Breakdown of eBay Fees

Business > Insertion Fee (after free listings) > Final Value Fee

Most industries: $0.35 - 10% - maximum of $750

Books, DVDs, and Music: $0.35 - 12% - maximum of $750

Heavy Equipment, Commercial Printing Presses, Food Trucks, Carts, and Trailers: $20 - 2% - maximum of $300

Guitars and Basses Free: 3.5% - maximum of $300

Athletic Shoes Free: if the item is sold over $100 - 0% if item is sold over $100 - 10% - if item is sold for less than $100

While this may seem like a lot of fees, they actually aren’t very high. Many websites charge much more than this to sell products on their website. Some even charge more than this when the product isn’t even a physical product.

Amazon Fees

Amazon is one of the companies that charge more than eBay to list and sell items. Amazon does a lot more for their sellers and for their buyers, but some companies may not be able to afford these fees and still make a decent margin on their products, particularly when so many Chinese companies sell their products on the cheap on Amazon.

The fees you pay as a seller on Amazon are going to vary depending on what you are selling, how it is being shipped, and whether you are FBA or FBM. When you are selling FBM on Amazon , so you are self-managed, you will pay a set of fees called the “Selling on Amazon Fees.” These fees include fees such as the “Amazon Referral Fee” and the “Variable Closing Fee”. FBA sellers pay these fees, as well.

When you are selling FBA on Amazon , it managing a lot more things for you, including storing your product. For this reason, you would have to pay a fee called the “Fulfillment by Amazon Fee.” This fee is calculated based on the weight and dimensions of your product so that Amazon can recoup a lot of the shipping costs associated with your item. This fee covers both your monthly storage as well as the fulfillment of your product.

However, sadly, that’s not all. There are a few other fees that you’ll have to pay when you sell on Amazon, as well.

As an individual seller, you will pay a $0.99 fee every time you sell an item, per item. This means you will pay the fee three times if you sell three products in the same shipment.

If you are registered as a professional seller, you pay a monthly subscription fee of $39.99, no matter how many products you sell during that time.

There are also fees involved if a customer decides that they want to return the item and get a refund. Sadly, processing the refund on your behalf is not a free service for Amazon sellers. The fee for this is $5.00 or 20% of the purchase price, thankfully, they charge whichever is less, so if your item was less than $25, you aren’t going to pay the full amount.

To Prime Vs Not To Prime

Amazon offers their customer’s Amazon Prime , which eBay does not have a version of. This gives Amazon a dedicated consumer base that has already “bought in” to the service, so they are likely going to keep coming to the platform to buy what they need time and time again.

The annual or monthly fee that Amazon customers pay in order to receive free, fast delivery means that they feel like they should order on Amazon before they order anywhere else so that they do not waste that subscription money.

Amazon Prime members often go to Amazon first for anything they may need, only turning to other websites such as eBay when they do not find a product that fits their specifications and desires. The fast delivery also means that more orders come through in the weeks leading up to the Holidays, as customers feel more confident that the gifts that they have bought for their loved one’s last-minute are actually going to make it in time.

There are over 112 million Amazon Prime subscribers in the US, so it is easy to see that this large and loyal customer base is worth taking advantage of when you are a seller.

Price and Quality

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Amazon is not just a marketplace for third-party sellers, it is its own retailer, as well. Because of this, Amazon has introduced a lot more regulation into the marketplace, whereas eBay mainly lets you sell anything that you want.

If you are selling vintage items or second-hand goods, eBay really shines. The auction model is perfect for these types of items that only have perceived value and no true market price, and there isn’t regulation when it comes to selling one of a kind items.

However, the auction model also means you don’t have control over what your profit is going to be. This is a risky game for some businesses, which is why they opt for “Buy It Now” pricing on eBay instead. However, the auction model tends to get more buyers interested, so it is a difficult choice.

Conversely, for high-end and popular products that don’t have brand recognition, Amazon has a loyal consumer base searching for products like yours each and every day. As long as your listing has an adequate keyword strategy, you will likely make many more sales on Amazon than eBay, and be able to keep prices low. 

Selling On eBay Vs Amazon Pros And Cons

Now that you know the main differences between Amazon and eBay, let’s go over a quick few pros and cons.

Amazon
Pros
  • Can store and fulfill your products for you
  • Has a more loyal consumer base
  • Has more access to marketing tools
  • Processes refunds and returns for you
Cons
  • Higher fees
  • Not good for unique, vintage, handmade, or second-hand items
  • More competition between sellers
  • Hard to offer better pricing than Chinese manufacturers
eBay
Pros
  • Fewer fees, particularly for certain categories of items
  • 50 free listings a month
  • Auction capability for items where price or value is not known
Cons
  • Not much of a loyal consumer base after issues with refunds and returns
  • Not as good for selling luxury items
  • Not as good for mass inventory
  • Doesn’t offer fulfillment or shipping

Which Is Better, eBay Or Amazon?

So, what’s the bottom line, eBay or Amazon, which is better? Well, that all depends on what you are trying to sell.

  1. For selling used items on Amazon vs eBay, eBay is going to be your better option
  2. For selling books on eBay vs Amazon, Amazon is actually better. Even for used books.
  3. For selling clothes on Amazon vs eBay, it is going to depend on the clothes. For bulk retail, choose Amazon, for vintage or handmade items, choose eBay, at least at first.
  4. For selling large items for local pick-up, choose eBay.
  5. For selling most used, vintage, and unique items, choose eBay.
  6. For choosing products you are having manufactured or that you purchased in bulk, choose Amazon.

FAQ

Is There An App That Compares Selling On Amazon Vs eBay?

While there is not an app, this article should help you determine which is best for you.

What Is The Difference Selling On eBay Vs Amazon?

eBay is an auction-based platform where you have to manage and fulfill your own products, whereas Amazon does it for clients who choose to do and prices are set by the seller.

Is It Ever Worth Selling On eBay Vs Amazon?

It is worth selling on eBay if you are a smaller outfit or doing this for some extra money and don’t plan on making it your full-time job.