Which platform is better to sell on: eBay or Amazon? Is eBay even worth selling on today or is it all Amazon?
In this article, I’ll review both platforms and reveal some surprising information you may not have expected.
- Which Has More Customers: eBay or Amazon?
- Which Has Less Seller Competition: eBay or Amazon?
- Which Is Easier to Ship Items with: eBay or Amazon?
- Which Has Lower Selling Fees: eBay or Amazon?
- Which has Lower Advertising Fees: eBay or Amazon?
- Which Is Better for Product Branding: eBay or Amazon?
- Which Is More Fair to Sellers: eBay or Amazon?
- Which Has More Good Product Categories to Sell in: eBay or Amazon?
- Summary: Pros and Cons of Selling on eBay and Amazon
- Conclusion- Which Is Better Overall: eBay or Amazon?
Which Has More Customers: eBay or Amazon?
The size of eBay’s marketplaces is a small fraction of what Amazon’s is.
Amazon’s revenue was $282 billion in 2018 compared to eBay’s meager $10.75 billion. eBay’s North America revenues are even smaller relative to Amazon’s.
eBay’s total revenue per year has been essentially flat for nearly five years while Amazon’s has nearly tripled in this time.
When I started my boating brand, eBay was over 50% of your revenues. When I sold the brand in 2016, eBay was well below 30% of our revenue. In 2018, eBay was well under 10% of my new brand’s total revenues.
Overall, all things equal, you should expect Amazon to bring in 10x more sales than eBay.
Verdict: Amazon Wins. There’s no competition here. Amazon is at least 10x bigger than eBay and growing quicker.
Related Listening: Episode 156: Diversifying Your Brand Beyond Amazon U.S.
Which Has Less Seller Competition: eBay or Amazon?
Both eBay and Amazon are selective with what data they reveal about their sellers.
Amazon in 2019 revealed they had 200,000 sellers with revenue over $50,000 and 50,000 sellers with revenue over $500,000.
eBay says there were 6.7 million sellers in 2017 but the VAST majority of these are very low volume sellers.
eBay almost certainly has far fewer sellers than Amazon. More importantly, as we’ll get to shortly, competition for advertising is also significantly less on eBay so it’s cheaper.
Which Is Easier to Ship Items with: eBay or Amazon?
Perhaps the biggest difference between eBay and Amazon is the fact that Amazon has its Fulfilled by Amazon program, more commonly know as FBA.
With Amazon FBA, sellers ship their items into Amazon and Amazon handles all fulfillment and shipping. This saves a lot of work.
Sellers are responsible for both inbound and outbound shipping. Sometimes a Seattle seller will be sending their inventory all the way to Florida. If this sounds impractical and expensive, sometimes it is. Overall though, most sellers pay less for shipping because of Amazon’s significantly discounted rates.
WIth Amazon FBA, you will also be responsible for storage fees which are also expensive (up to $200 per month to store a pallet from October to December)
One major downside to Amazon FBA is that it potentially creates sales tax nexus for sellers in dozens of states meaning they have to collect and remit sales tax in those states.
Verdict: Amazon is easier than eBay to fulfill and ship items with. Amazon FBA is a huge boon for MOST sellers as it removes the hassle of shipping. However, it means expensive storage fees and is not a good option for people wanting to fulfill items from a garage or basement. It may also create sales tax issues.
Which Is Easier to Manage: eBay or Amazon?
In terms of management, eBay is a victim of its past success when it used to rule the world of used products.
eBay has a terribly confusing decentralized product management system. There can be thousands of different listings for the same exact Instapot.
eBay allows HTML/CSS in its listings which means sellers are constantly trying to edge on another in sophistication and design of their listings.
Contrary to eBay, Amazon has an extremely easy to use product management system. There is only one listing per unique UPC (the bar codes you see on products). Amazon essentially only allows photos and plain text product descriptions making listings much easier.
Verdict: Amazon by a long shot is easier to manage than eBay. This one isn’t even close. Amazon is as close to a ‘set it and forget it’ marketplace as you can get.
Which Has Lower Selling Fees: eBay or Amazon?
eBay charges a flat 10% in commissions but does not include payment processing fees in that calculation. Payment processing fees are typically an additional 2.9% from PayPal.
Amazon typically charges a 15% commission which includes payment processing fees.
However, Amazon will charge you inbound shipping fees if you use their FBA program and outbound shipping fees as well.
We used an example of a package selling for $49.99 and measuring 15″x12″x4″. The cost on eBay was $15.96 compared to $13.25 on Amazon. Amazon fees were 20% cheaper than eBay.
Which Has Lower Advertising Fees: eBay or Amazon?
Both Amazon and eBay are increasingly becoming pay to play marketplaces. This means that often you need to pay to have your listings appear at the top of search results.
However, Amazon sellers rely on advertising far more than eBay sellers.
We surveyed five high volume sellers and found that these sellers had advertising account for 26.7%-60.6% of their sales.
eBay has recently expanded what it calls promoted listings but most sellers use no advertising at all.
If you’re a typical seller on Amazon, with 25% of sales coming from advertising and pay approximately 30% for your Average Cost of Sale (ACoS), then this adds an extra 7.5% on to your selling fees. Ouch.
Verdict: eBay knocks out Amazon with lower advertising costs. This one isn’t even close. Most Amazon sellers pay a ridiculous amount of money on advertising while most eBay sellers pay none.
Which Is Better for Branding: eBay or Amazon?
The biggest disadvantage of Amazon though is the fact that Amazon owns the customer in every regard.
Amazon hides everything about the customer in great detail, most importantly their email address. They also severely limit how much branding of your products you can use by severely limiting HTML/CSS use.
While eBay does not want you directing customers off of eBay, you do have a lot more flexibility, including getting access to their email address and being able to somewhat brand your store and listings.
Previously, we used Mailchimp’s eBay integration to email customers after purchase if they’d like to signup for an extremely relevant ebook. Each month we would generate 100+ emails from this strategy. Our email list for this segment converted at around 1% with an average transaction value of $200. It was very valuable.
eBay also allows you a lot more flexibility than Amazon in branding through your eBay store. eBay allows watermarking of photographs and even displaying of URLs to some degree.
Verdict: eBay offers far more branding opportunities than Amazon. Neither channel likes you steering customers away from their platform but eBay offers, at the very least, more flexibility for the branding of your items.
Which Is More Friendly Towards Sellers: eBay or Amazon?
Both eBay and Amazon are buyer-centric. However, Amazon tends to be more ruthless.
Amazon has a terrible reputation for suspending buyers, often with little cause or warning. In fact, an entire cottage industry of account suspension “specialists” have popped up to help sellers get unsuspended. When an Amazon account suspension occurs they immediately freeze your funds and give you little feedback.
eBay has a Seller Performance dashboard which, unlike Amazon’s Account Health dashboard, is a relatively fair representation of the actual health of your account. eBay sellers are given a fair chance to correct poor performance.
eBay is also more prone to suppress a seller’s listings than outright suspend them and their funds, a far better alternative to Amazon’s immediate and sudden suspensions.
Which Has More Good Product Categories to Sell in: eBay or Amazon?
|What Product Categories Do Amazon and eBay Excel At?|
Amazon is dominant in nearly all product categories where there is existing customer demand and the products are not found through discovery and/or purchased on impulse.
eBay is still competitive with eBay motors (automotive/boating/etc.) and electronics, specifically electronics parts and accessories. Also, it still dominates used items, collectibles, and other unique items.
eBay and Amazon are generally not good for customized products such as engraved products. While both do offer some level of customized support for customized products, none have the level of support for customization that your own website can provide.
Summary: Pros and Cons of Selling on eBay and Amazon
Overall, eBay allows you the opportunity to brand your products and store more and with more forgiveness for mistakes and/or poor quality products. The cost is a significantly smaller audience and no in-house fulfillment.
Selling on eBay Pros
- You can brand your store/product
- You get the customer’s email information – higher lifetime value
- More forgiveness for lower quality products
- Lower advertising costs
- Lower return rates
Selling on eBay Cons
- Much smaller audience
- No eBay fulfillment for shipping
- More time consuming to launch listings
- More customer service required
- Non-transparent listing fees
The biggest advantage of Amazon is the sheer size of the marketplace. The Amazon FBA program is a close second. The cost is that Amazon is a cutthroat marketplace where you will have constant schizophrenia in fear of other sellers sabotaging you and/or Amazon suspending you.
Selling on Amazon Pros
- Much larger audience than eBay (10x+)
- Amazon FBA means Amazon handles all shipping and most customer service
- Easier to manage
- Can use paid advertising to have your items instantly rank for keywords
Selling on Amazon Cons
- Amazon “owns” the customer entirely
- Much more competition than eBay
- Paid advertising is critical and drives up selling costs
- Ruthless suspensions and bad seller support
- Higher return rates
Conclusion- Which is Better Overall: eBay or Amazon?
On paper, it would appear as though Amazon vs eBay is a close race. The reality is that Amazon is almost always the better platform for sellers to start selling on.
eBay does have a place in ecommerce and many sellers will find value on it. It just shouldn’t be the first thing you focus on.
While Amazon does have higher selling fees, especially if you consider advertising fees, it makes up for this by having a much larger customer base, easier fulfillment and being easier to manage.
Do you think Amazon is the best sales channel for sellers? Let me know your thoughts in the comments below.