E-commerce outfits might look alike, but in reality, there are a lot of crucial differences in their features, tools, benefits and subtle challenges. Many e-commerce newbie sellers have made the mistake of believing that eBay and Amazon marketplaces similar and require the same kinds of strategies on both of them. In this article, we highlight these differences between eBay and Amazon.
Size and Competition
First and foremost, the size of eBay is only a tiny fraction when compared to Amazon. So, in reality, eBay offers a more personalized experience and may or may not require many marketing tactics.
In 2018, revenues generated from Amazon were about $282 billion which is profoundly higher than the $10.75 billlion revenue generated by eBay.
However, it is even quite astounding to find that eBay has a tremendous number of sellers at over 6.7 million sellers.
The glaring difference can only be witnessed by looking at the amount of money sellers made on both platforms.
Even as Amazon has a higher amount of sellers, over 200,000 sellers on Amazon are making over $50,000 sellers, and 50,000 sellers are actively making $500,000. However, eBay sellers are merely selling off bits and pieces. Therefore, eBay sellers will spend less on advertising than on Amazon since they will witness lesser competition on this platform.
Warehousing and shipping needs
Another difference between eBay and Amazon is Amazon’s unique fulfillment by Amazon program which gives sellers immense relief over their shipping. This saves a lot of time and work but as expected Amazon takes storage and shipping fees from sellers.
However, these costs are lower for the sellers than taking care of it on their own.
Amazon FBA might create a hassle-free platform, but it is tremendously expensive for sellers who just want to get some products out of their garage. Also, there is a sales tax nexus problem to deal with because sellers will have to collect and remit tax in all states where they handle business.
Management fee structure
eBay demands a flat 10% commission for every sale. However, this does not take into account the 2.9% to be made to PayPal. On the other hand, Amazon charges 15% processing fee which includes payment processing fees as well as inbound shipping and outbound shipping fees if you are using the FBA program.
If you take into account your shipping fees on eBay, you will find that Amazon’s rate is lower than eBay. According to ecomcrew, Amazons fees cost about 20% less than eBay’s fee structure.
Friendly or Not so friendly culture
Both platforms are focused on the buyer, but Amazon takes it to a whole different level. Amazon suspends with no prior notice. They will only inform the seller about this development in feedback after they have taken actions.
eBay, on the other hand, is fairer to sellers and may suppress a seller’s listings but will delay on the actual suspension. However, it is important to note that both companies are very unfair to sellers; the only difference is that Amazon is more ruthless about it.
Both marketplaces offer some level of customized support for your products, but you can’t expect the kind of unlimited branding opportunities from a website. However, the sort of products you want to sell would determine the platform. eBay is more notorious for the sales of used products whereas Amazon is all about new products.
Nevertheless, Amazon offers more options with adding product categories which means more ways to promote your brand.
Newbie sellers will find a more competitive and bigger marketplace on Amazon. But if they only want to sell a few units of products, primarily used products, then eBay would be the better option.
There is equally a problem of sales nexus tax legalities and advertising fees to deal with when using the Amazon platform. But then again, Amazon FBA is a welcome solution to shipping and storage problems. Therefore, the right selection would depend strictly on the Seller’s goals, budget, and type of products.