Are you considering starting an online business to scratch your entrepreneurial itch and make some extra cash? If so, one of the first and most critical decisions you’ll face is where to set up your online business. As you break down the major marketplaces to host your e-commerce business, you’ll likely have to choose between selling on Amazon vs eBay.
While each ranks among the best-selling marketplaces, each has unique strengths and weaknesses that might better suit the needs of your e-commerce business. How do you decide which fits your business like a glove and which might cramp your style?
We’ll take a look at the difference between eBay and Amazon to help offer some clarity on each and help you decide is it better to sell on eBay or Amazon to maximize online sales and give your online business the most likely path to success.
Amazon Overview
Started in 1994 as an online bookstore with operations run in founder Jeff Bezos’s garage, Amazon has emerged as one of the most successful businesses in the world, mainly built on its massively popular online marketplace. With $514 billion in sales in 2022 and more than 200 million members worldwide subscribing to Amazon’s Prime subscription, which consists of various customer perks, Amazon’s sheer size and scale are almost unimaginable.
More than 60% of sales in the Amazon store come from independent sellers—most of which are small and medium-sized businesses, encapsulating the opportunity for individuals to make serious money selling products on Amazon.
Who shops on Amazon? Well, everyone! Students snagging textbooks, parents hunting for baby supplies, and tech buffs chasing the latest gadgets. It’s a melting pot of buyers that reaches far and wide. If you can dream it, Amazon probably sells it. From electronics to fashion and even handmade crafts, there’s a space for every product.
Although there’s an opportunity to start and scale an online business in any Amazon category, specific categories tend to have a higher ceiling of success. Also, Amazon offers two types of seller plans: Individual and Professional. These plans account for the basic needs of sellers looking to make a few bucks selling a smaller volume of items and for sellers looking to launch a large-scale business.
Pros of Selling on Amazon
As evidenced by the thousands and thousands of sellers who have unlocked financial freedom and business excellence on Amazon, the allure of running a business on Amazon is obvious. Still, let’s go over a few of the main advantages of selling on Amazon.
A massive customer base
With millions upon millions of active users worldwide, Amazon provides unparalleled access to a vast pool of potential customers actively seeking products across diverse categories. This expansive audience isn’t just about numbers; it’s about the power of reach.
For budding entrepreneurs, tapping into this extensive customer base means an instant boost in visibility and sales opportunities, paving the way for increased brand recognition and accelerated business growth. The scale of Amazon’s customer base isn’t just impressive—it’s an enticing gateway to a world of endless possibilities for online business endeavors.
Less seller responsibility
The Fulfillment by Amazon (FBA) program is truly one of a kind, helping fuel the massive scale and success of the Amazon marketplace. You send your products to Amazon, and they handle storage, packing, shipping, and even customer service. That’s some serious weight off your shoulders, and it allows you to focus on the big picture while outsourcing tedious and time-consuming tasks that help deliver a top-notch offering in terms of storage and fulfillment.
Of course, not every Amazon seller is required to join the program and pay the fees associated with it as alternative fulfillment options for Amazon sellers exist, but these options come with their own baggage, including additional responsibility and possible visibility suppression if the chosen alternative provides slower or less reliable shipping for customers.
Brand and consumer trust
Consumer trust resides at the foundation of any thriving online marketplace with staying power. Without it, the marketplace will crumble over time as customers become jaded with the lack of trust and security from sellers and quality assurance from the platform. It’s this trust and protection that has built Amazon into the behemoth it is. Amazon has painstakingly built a legacy of dependability and exceptional service over the years, fostering a sense of confidence and assurance among consumers.
For prospective entrepreneurs, this trust factor serves as an invaluable asset. Being associated with Amazon’s trusted brand creates a halo effect, instilling confidence in potential customers and significantly reducing the barriers to purchase. For new businesses, this reputation serves as a launching pad, offering a head start in establishing authenticity, reliability, and trust—a foundation crucial for long-term success in the competitive e-commerce landscape.
Exclusive promotions
On top of building a sturdy base of regular Amazon shoppers, Amazon goes above and beyond with promotional events and the ability for sellers to create deals that entice customers to make a purchase. Since the first-ever Amazon Prime Day in 2015, the event marks one of the largest shopping days on the calendar. In 2023, Prime Day pulled in a record-high $12.7 billion spent on the platform.
But Prime Day isn’t the only way Amazon lures shoppers to make purchases in bulk. Amazon created Prime Big Deal Days in 2023 after rolling out a Prime Early Access Sale the previous year. Additionally, Amazon incentivizes shoppers through Amazon Lightning Deals, along with seasonal promotions like getting involved with National Small Business Week. In creating events that generate buzz and sales, Amazon has shown an ability that ranks second to none in serving shoppers and sellers.
Cons of Selling on Amazon
Before making a decision on which platform should host your business, you should be aware of the negatives that will ultimately play a role in your business operations.
Intense Market Competition
While Amazon’s vast customer base is a goldmine, the opportunity can be a double-edged sword. Standing out amidst a sea of similar products demands strategic positioning, creative marketing, and often a price war. Succeeding in this highly competitive landscape can be both daunting and demanding for new sellers.
Strict Seller Policies
Amazon’s seller policies aren’t a walk in the park. They’re stringent, with account health metrics that sellers must continually meet. Straying from guidelines, even unintentionally, can dent seller ratings and account standing, impacting visibility and sales.
More Fees = Fewer Profits
Selling on Amazon comes at a cost, quite literally. The fee structure can eat into profit margins, from listing fees to FBA charges. While the benefits of FBA are enticing, its fees can significantly impact a seller’s bottom line, making cost management a perpetual balancing act. Many of these fees are based on how many items you sell, so while you’re still encouraged and incentivized to sell as many items as possible, the costs will cut into your net profits with every item sold.
Long-Distance Relationship With Customers
Building direct relationships with customers is a challenge on Amazon. Limited communication hinders personalized interactions crucial for brand loyalty and customer retention. Sellers have restricted access, often unable to address queries or concerns directly, impacting the ability to provide tailored support or gather valuable feedback.
Navigating these challenges requires a strategic approach, meticulous adherence to policies, and a thorough understanding of Amazon’s intricate ecosystem. While the platform offers vast opportunities, these hurdles demand resilience and strategic maneuvering for sellers aiming to thrive amidst fierce competition.
eBay Overview
Founded in 1995 as AuctionWeb, eBay helped normalize the idea of e-commerce among the masses. During the dot-com bubble of the late 90s, eBay entered the mainstream consciousness as the go-to method for selling products online. In the early days, the media coverage of the Beanie Babies craze, where collectors could buy, sell, and trade the highly-coveted stuffed toys, helped transform eBay from an internet niche into a household name.
While Amazon has long surpassed and lapped eBay in terms of popularity and sales, eBay remains a heavyweight in e-commerce, ranking behind only Amazon, Walmart, and Apple in e-commerce market share. With 135 million users and $9.7 billion in revenue for 2022, eBay persists as a major force in this booming industry.
From vintage-minded customers scouring for retro treasures to tech enthusiasts seeking the latest gadgets, eBay casts a wide net of customers in terms of market diversity. This diversity is displayed by the chart below, which shows the audience is younger than many might think, as well as some of the top-performing categories in the marketplace: Mobile Phones and Accessories, Video Games, Health and Beauty, and Home and Garden.
While sellers can also set their products’ prices, eBay’s auctions are a signature part of the general eBay experience. As a seller, the auction-style pricing can be a great draw, as competition among customers can lead to bidding wars that ultimately favor the seller.
Pros of Selling on eBay
In the arena of e-commerce, eBay stands tall as a formidable contender, offering distinct advantages for savvy sellers navigating the digital marketplace landscape. While Amazon commands a massive share of the online retail space, eBay’s unique strengths warrant consideration, especially for entrepreneurs seeking diversity and flexibility in their selling strategies.
Global Reach and Market Diversity
eBay’s global reach opens doors to a diverse and eclectic market that transcends geographical boundaries. eBay’s platform champions a wide variety of products, including vintage collectibles, one-of-a-kind items, and niche offerings that might not find a home in mainstream markets or be commonly searched for on Amazon. For sellers exploring the breadth of consumer interests, eBay’s international platform offers a promising opportunity to tap into varied markets, catering to unique customer preferences.
Listing Flexibility: Auctions and Fixed-Price Formats
The allure of eBay lies in its versatile listing formats—auction-style bidding and fixed-price listings—offering sellers a canvas to experiment with diverse selling strategies. While Amazon primarily favors fixed-price listings, eBay’s auction format fosters excitement and engagement, igniting bidding wars that can drive prices beyond expectations. This auction dynamics, coupled with the stability of fixed prices, provides sellers with a unique avenue to maximize profits while adapting to market fluctuations.
Seller Autonomy and Control
In the realm of policies and engagement, eBay grants sellers a notable degree of autonomy. Unlike Amazon’s stringent guidelines, eBay affords sellers greater control over store policies, customer interactions, and branding strategies. This autonomy empowers sellers with the freedom to sell their own way, including how they present the product through images, listing copy, and interacting with customers.
Cost Efficiency and Competitive Fees
When considering the price of selling and dissecting Amazon FBA vs eBay fees, eBay often shines as a cost-effective alternative, especially in select categories. The platform’s fee structure, frequently lower than Amazon’s, provides a favorable environment for profit margins, particularly for sellers operating in specialized niches or dealing with unique, higher-priced items.
Overall, eBay’s strengths pivot on its global market diversity, listing flexibility, seller autonomy, and competitive fee structures. While Amazon boasts undeniable prowess, eBay’s unique features present an enticing proposition for sellers seeking a more versatile, adaptable, and cost-efficient selling platform in the competitive e-commerce arena.
Cons of Selling on eBay
While eBay boasts a considerable amount of advantages, it’s not without its flaws. Depending on what you seek to get out of your selling experience and how you plan on running your business, the following features may be considered cons and should be accounted for when deciding which platform deserves your time.
Market Perception
Because eBay can diverse marketplace sometimes gets pegged as less professional compared to other platforms. Overcoming this perception hurdle might take some strategic effort if you intend to overcome it at all.
While not always a reality, this perception may impact seller branding and consumer trust, requiring proactive efforts to position offerings in a manner that transcends any preconceived notions of the platform’s professionalism.
Less Structure = More Responsibilities
Shipping, customer service, dispute resolution—it’s all on your shoulders. Greater autonomy means greater responsibility.
Unlike Amazon, where certain aspects like logistics and customer service can be handled through Fulfillment by Amazon (FBA), eBay places greater responsibility on sellers for shipping, customer support, and dispute resolution. This heightened seller involvement demands diligent attention to each customer interaction, potentially posing challenges for those unprepared for the level of engagement required.
Pricing Dynamics and Competitive Challenges
While you can list a fixed price for your items or go with the auction-style pricing eBay is known for while ensuring a minimum amount is required, the issue of pricing items can be a double-edged sword. Maintaining high selling prices can be a tightrope walk. With competitive pricing strategies prevalent, keeping your prices attractive yet profitable poses a challenge. If the product you sell is intended for a niche audience, price fluctuations can make it incredibly difficult to plan for your business, especially if the items are in used condition.
Average Selling Price and Margin Management
A key hurdle for eBay sellers revolves around managing average selling prices, particularly in the face of competitive pricing strategies prevalent on the platform. For sellers aiming to maintain high selling prices, the dynamic nature of eBay’s marketplace demands continuous adaptation and strategic pricing decisions to ensure profitability without compromising on market competitiveness. For the most part, Amazon’s regular fixed-price strategy and higher volume of sales are to be considered when weighing Amazon vs eBay profitability.
Even when compared to other online marketplaces, eBay remains an exceptionally unique platform with its audience, pricing dynamics, and opportunity for an individualized selling experience.
Amazon vs. eBay Selling Compared
In the following visual chart, we break down and compare the fees, seller tools, customer demographics, platform usability, and fulfillment choices between Amazon and eBay, offering a concise overview of the distinctive features that shape these leading e-commerce platforms.
Choose the Right Platform for Your Business
Choosing the right platform depends on your business goals. Amazon might be the launchpad to skyrocket sales for established brands with high-quality products and efficient fulfillment. eBay could be the ideal starting point for niche businesses with unique offerings or a focus on customer engagement.
Deciding between Amazon and eBay starts with understanding your goals and resources and what product(s) you decide to sell. Generally, Amazon suits standardized products for a broad audience, while eBay caters well to smaller-scale operations.
Consider your team’s capabilities for fulfillment and customer service. Amazon’s FBA can ease fulfillment but might impact profits. eBay puts more responsibility on sellers for these tasks. Assess your ability to handle these demands before choosing a platform.
And remember, you’re not limited to one platform! Using both Amazon and eBay can expand your digital reach and mitigate the risks of your business relying on a single platform. But remember, managing both requires syncing inventory, pricing, and customer service but can significantly increase your business’s visibility across different audiences. Applying the same game plan for both of these unique marketplaces simply won’t suffice in the long run, as you’ll need to tailor your approach to match the platform and customer base of each.
Generally speaking, Amazon is likely better suited for full-scale operations typically associated with a business while eBay is better suited for selling used or second-hand items on a smaller scale. The FBA program allows a level of convenience not afforded on eBay or elsewhere at the moment, giving hopeful entrepreneurs a dedicated and skilled workforce that would otherwise make a business too costly or time-consuming.
Conclusion
Ultimately, the choice to sell through eBay vs Amazon hinges on your resources and goals. Each platform includes its own set of strengths and weaknesses and ranks among the best online marketplaces in 2024.
Amazon’s colossal customer base, streamlined fulfillment through FBA, and robust brand trust are magnets for established brands seeking a broad audience and efficient operations. However, navigating its competitive environment, stringent seller policies, fees, and limited customer interactions require strategic finesse.
In contrast, eBay’s global reach, flexible listing formats, and seller autonomy appeal to niche businesses, unique offerings, or those prioritizing customer engagement. Yet, overcoming market perceptions, managing seller responsibilities, pricing dynamics, and margin fluctuations demand resilience and adaptability.
Your decision hinges on aligning platform strengths with your business goals. Assessing resources for fulfillment and customer service, and considering the nature of your products will guide your choice. Remember, leveraging both platforms can amplify your digital footprint but requires meticulous synchronization.
Hopefully, this comparison helps you settle the Amazon vs eBay debate as you determine the best path for entrepreneurial success. At Viral Launch, we are tirelessly dedicated to helping aspiring entrepreneurs launch, grow, and scale their online businesses with insights from the Amazon marketplace. After obsessively monitoring the Amazon marketplace for nearly a decade and compiling state-of-the-art analytics and the most accurate data about the marketplace, we provide the tools and data necessary to fuel success for aspiring Amazon entrepreneurs.
