When it comes to selling physical products online, there’s no shortage of platforms to sell on. Although there are literally hundreds of ways to sell physical products online, we’re going to talk about the two top dogs in the industry: Amazon and eBay.
This article will finally answer the age old question, “Which is better for sellers? Amazon or eBay? I have gone to great lengths to make sure that every possible angle has been analyzed. I highly recommend that you read this entire article before you commit to one platform for the majority of you sales.
Let me preface this extremely detailed article with two important points.
1. Both Amazon and eBay are very good platforms for sellers. There is a “better” option though depending on factors such as what you’re selling, how much time you have, and how much you’re planning to sell.This isn’t going to be a traditional head to head “winner/loser” post.
2. You can sell on both platforms. Fortunately, selling on Amazon or eBay it’s not an “either or” decision. You can absolutely sell on both platforms if you’d like and I actually recommend that all sellers create accounts with Amazon and eBay, even if they plan to use one of the two much more frequently.
In this article, I’m going to compare Amazon vs. eBay with special attention to the following:
- Amazon Fees vs. eeBay Fees
- Amazon Customer Base vs. eBay Customer Base
- Amazon Competition vs. ebay Competition
- Amazon Seller Support vs. ebay Seller Support
- Amazon Product Restrictions vs. eBay Product Restrictions
I will also include some additional pros and cons for each at the end that will help you decide if Amazon or EBay is the better platform for you.
Amazon FBA Fees vs eBay Fees
This is the most common question people have about Amazon vs. eBay. We’ve all purchased on both platforms so you should be relatively familiar with what each looks like and how they function, but you’d have to do some digging to find out about the fees involved when you actually sell products on each platform. I’ve done that digging for you!
From a raw numbers standpoint, it is almost always cheaper to sell on eBay than on Amazon. However, Amazon comes with additional benefits (which I’ll share later) that make the higher fees easier to swallow.
It’s important that you don’t make your decision based entirely on the fees involved.This approach is shortsighted and can lead you to miss out on more profits in the end. Yes, saving money on fees might actually be costing you money in the long run. So pay attention to this entire article, not just this short section.
“Saving money on fees might actually be costing you money in the long run.”
When comparing the fees of Amazon vs. eBay, it’s important to note that Amazon has two separate plans but this article is going to focus only on the Amazon FBA plan. If you choose to sell on Amazon over eBay, you’ll definitely want a pro seller plan as long as you sell at least 40 items each month. You’ll also get access to the Fulfillment by Amazon program (more on that shortly) and the ability to sell in additional categories that are off limits to individual sellers. If you sell under 40 items, I recommend you just sell on eBay. eBay is a much better fit for the casual seller.
Note: The table below is extremely broad. I will go deeper into the fees as they relate to different variables shortly and will provide examples that will show you exactly how much you’d pay to sell the same item. There are a lot of factors that impact the fees but this is a mile-high overview.
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Cost to Ship to Warehouse |
Deeper Dive Into Amazon FBA Fees
Amazon fees have more variables involved than eBay fees. They are impacted by things like product size, category and how long they stay at Amazon fulfillment centers before they ship.
Amazon fulfillment fees vary based on the dimensions of the item and include the cost of:
- Picking your order
- Packaging your order
- Shipping your order
- Customer service for your order
- Handling returns for your order
None of these services are offered by eBay so it is no surprise that Amazon is almost always going to cost more in fees.
Amazon storage fees are based on the time of year (4th quarter fees are higher), the cubic feet used and the length of time your inventory is held.
Amazon discourages their sellers from sending in inventory that doesn’t sell quickly by charging very steep “longterm storage fees.” The longterm storage fee is killer so it’s important that you avoid sending in more inventory than you can turnover in 6 months.
Although these fees seem may high, keep in mind that Amazon is doing much more work for you than EBay is. The amount of time, energy and money you will save will easily offset these fees. Successful sellers are more than happy to pay these since the alternatives would typically cost much more.
Keep in mind, you do not have to list every item with the FBA program. You have the ability to list items as “Merchant Fulfilled,” which means you ship them yourself when they are ordered.
Deeper Dive Into ebay Fees
One of the beauties of eBay is the straightforward nature of their fees. There are three basic fees for any EBay sale.
1. eBay insertion fees
This is essentially the fee of listing on eBay. You can list a number of products without paying this fee depending on your seller status.
The eBay insertion fee is applicable for products in the following categories:
- Antiques
- Art
- Clothing, Shoes & Accessories
- Coins & Paper Money
- Collectibles
- Dolls & Bears
- Entertainment Memorabilia
- Health & Beauty
- Jewelry & Watches
- Pottery & Glass
- Sports Memorabilia, Fan Shop & Sports Cards
- Stamps
- Toys & Hobbies
“Good ‘Til Cancelled” listings are charged insertion fees once every 30 days.
That is the important things you should know about insertion fees but if you want to read even more about them and some additional restrictions, check out the eBay website.
2. eBay final value fees
This fee is based on the subtotal charged to the customer per item including shipping and handling (sales tax is not included).
eBay punishes sellers who don’t meet their minimum seller performance standards in the US at the time of sale by charging an additional 4% final value fee. Likewise, sellers who have an ‘Item not as described’ evaluated as “Very High” in one or more categories, the final value fees will increase by 4 percentage points for sales in those categories.
3. Optional listing upgrade fees
There are premium features that eBay sellers can add to their listings. Things like listing in multiple categories or to have your listing shown in the search results. If you choose to have eBay create shipping labels for you, there are additional fees for that as well.
Note: There is a PayPal fee of 2.9% + $0.30 on each transaction.
Ok, that was boring as hell. Please check Amazon and eBay directly for the most up to date information regarding their fee structure. I only covered about 50% of it here! Don’t worry, it was the most important stuff I promise.
Amazon Vs. ebay Pricing Examples
It’s much easier to compare the fees involved with real examples, so I’ve collected a few here for you.
- I have made up buy prices for each of these examples and for the Amazon fees. The margins were relatively high. If you’re new to selling, don’t expect all of your leads to have margins like this.
- I will be assuming that I am shipping this unit to the fulfillment center at a rate of $0.45/lb.
- The sales tax I paid has been added to the buy price.
- These units will sell within one month (this is needed to calculate FBA storage fees). I have used $0.08 for each item, this isn’t constant but will only deviate by a few cents.
- I have not added costs such as boxes, packing materials and tape.
- I am calculating eBay fees assuming we are not an EBay store and Top Rated Sellers (slight discounts if we had those added).
- Item is a domestic shipment (within the United States) and eBay examples will charge the buyer exactly what the shipping costs the seller. In reality, sellers can usually charge more for shipping than they pay for it themselves.
Please Note: Shipments to Amazon fulfillment centers should always be in bulk. Shipping one unit by itself to an Amazon fulfillment center is extremely inefficient and not cost effective. If you do wish to send just one item, consider listing it as MFN (Merchant Fulfilled) and you will ship to the customer when the item sells. This will typically leave you with a higher payout and ROI.
Example #1 Nordic Lifting Gloves
Listing Price: $19.99
Buy Price: $6.45
Category: Sports and Outdoors
Shipping Weight: 5.6 ounces
Example #2 Stone Age Board Game
Listing Price: $46.00
Buy Price: $18.54
Category: Board Games
Shipping Weight: 3.66 lbs
Example #3 Nike Shoes Shox 11.5(M)
Listing Price: $59.65
Buy Price: $24.56
Category: Clothings, Shoes and Jewelry
Shipping Weight: 2.12 lbs
Example #4 Nerf N-Strike Blaster (Oversized)
Listing Price: $49.99
Buy Price: $14.49
Category: Toys and Games
Shipping Weight: 3.7 pounds (Oversized)
Amazon Customer Base vs. eBay Customer Base
The user bases aren’t comparable. Amazon dwarfs eBay in terms of buyers, total revenue and other meaningful metrics that describe the size of the customer base.
As of 2018, eBay has reported that they have 175 million active buyers globally and Amazon has reported that they have 300 million active buyers globally.
When it comes to global distribution, eBay is actually available in more countries than Amazon. eBay serves 27 different countries compared to Amazon’s 13 country specific platforms. Amazon also doesn’t offer their prime benefits to all countries. As of 2018 Only United States, United Kingdom, Spain, Japan, Italy, Germany, France, Canada, Australia and Austria benefit from the Amazon Prime program.
AMAZON Competition VS. eBAY Competition
As of 2017, it is estimated that eBay has around 25 million sellers globally and Amazon is estimated to have roughly 5 million marketplace sellers across all marketplaces. So, eBay has half the buyers and 5x the sellers!
Now, this isn’t as crazy as it sounds since eBay has had 3rd party sellers much longer than Amazon AND eBay has always facilitated more casual sellers. Also, eBay makes it very easy for any registered buyer to list items for sale on the platform so there is a blurred line here between legitimate seller and buyer who casually listed an item or two.
Amazon competes directly with their 3rd party sellers and only recently lost the majority share of the product revenue (3rd party sellers account for about 52% of all sales on the platform now).
3rd party sellers account for 53% of sales on Amazon.com as of Q3 in 2018.
Amazon Seller Support vs. ebay Seller Support
You will hear griping from sellers about eBay and Amazon seller support, but is one really more difficult to deal with than the other? I believe the answer is yes. Amazon is much harder on their sellers than eBay because they are 100% committed to their customers first. Amazon sides with their customers by default and puts the burden on their sellers to prove that they were not wrong whenever an issue arises.
Sellers prefer Amazon to eBay and other platforms according to recent polls.
In terms of responsiveness and support for issues that are not performance based, both platforms do a good job of replying to their sellers and providing them the support they need to succeed on their platforms.
Amazon Product Restrictions vs. eBay Product Restrictions
Amazon has many more product and brand restrictions than eBay. New sellers claim that they have a difficult time finding anything that they can actually sell when they are first getting started. This is actually part of why I recommend all Amazon sellers create eBay accounts as well. It allows them to sell items that they can’t sell on Amazon.
Additional Considerations
Amazon competes directly with their sellers.In 2018, 3rd party sellers account for more than half of the products listed on the Amazon marketplace! This poses a unique problem for sellers though since they are competing with Amazon on many of their product listings.
Amazon’s business model is based on scale and selling products as low as possible. When they are on a listing, you won’t see an above MSRP price. Products sold above MSRP (products that are in high demand and are in low supply elsewhere) provide a tremendous opportunity for sellers but Amazon won’t ever take advantage of market shortages. When they list a product, it will be at or below MSRP, even if they could easily sell it at much higher prices. They will get the most sales and other sellers will either have to wait for Amazon to go out of stock or drop their prices to compete.
Many private label sellers (sellers who bring their own branded products to Amazon) complain that Amazon “steals” their product and bumps them out of competition with lower prices and a control of product visibility. Amazon is more likely to show their “Amazon Choice” products on the first page.
At the end of the day, Amazon is not trying to push out their 3rd party sellers. Their business model is genius and they are able to profit on every sale, even when it isn’t their own product. Although Amazon has a concerning amount of power, the ever rising number of sellers each year shows that they don’t abuse it enough to scare many people away.
eBay is perceived as selling mostly “used” products (but that isn’t the case).Although eBay is known for allowing pretty much anyone to sell products in any condition they wish, 81% of their products listed are actually brand new.
Managing storage fees on Amazon is tricky. You have to take the good with the bad. Amazon provides the option to store ad fulfill your inventory for you but that doesn’t mean you can send it and forget it. The fees are very reasonable until you get into the long term category. Amazon doesn’t want to turn into a permanent storage center for your aging inventory so they charge what is essentially a penalty for inventory that has been in a fulfillment center for 181-365 days and even more after 365 days.
More work required for listing and product images on eBay. Unless you’re bringing new products to the Amazon market, you rarely need to create new listings from scratch like you do on eBay. On eBay, you need to take images of your products. This really isn’t very difficult, but you don’t get to leverage the pre-existing listings like you would on Amazon.
More 3rd party tools and data. Amazon provides a lot more data than eBay or any other e-commerce platform on the planet. Things like sales rank make it easier for sellers to predict sales velocity. This means tools for improving your Amazon business are all over the place. There are tools for repricing, product research, listing improvement, collecting reviews and much more.
Amazon businesses have much more resale value. If your goal is to someday sell your business, selling an Amazon business is much easier and more profitable than selling an EBay Business. A quick visit of a site like EmpireFlippers.com that brokers the sale of e-commerce businesses will show that EBay businesses are rarely sold and when they are, they are not worth nearly as much as Amazon businesses.
Amazon is more scalable. The FBA program makes scaling much easier. You don’t need to have the same overhead as you do with EBay. You can have a studio apartment and thousands of square feet worth of items in stock at Amazon fulfillment centers.
Many businesses make Amazon their primary sales channel. According to a poll from Feedvisor, almost half of Amazon sellers report that 81%-100% of their e-commerce revenue comes from Amazon alone.
Some buyers like the novelty of the eBay auction style listings. Amazon doesn’t offer any sort of auction method. Some buyers enjoy the rush of bidding on a product and watching it as the listing deadline comes closer.
Reviews lead to more (or fewer) sales. The seller rating on eBay is much more important than the seller rating is on Amazon. This is because Amazon buyers are supported by the Amazon Prime refund policy and they know that their customer support will be handled promptly by Amazon. On eBay, sellers with better feedback make more sales and vice versa.
Conclusion
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