Selling on Amazon vs eBay – Which is Better in 2020?

January 1, 2020 in Amazon, Blog
Amazon Vs. Ebay
Which platform is better to sell on: eBay or Amazon? Is eBay even worth selling on today or is it all Amazon?

Amazon vs. Ebay - Which one is best?

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?

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.

ebay revenues vs amazon revenues

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 though, eBay is still very big relative to the other top ecommerce sites. eBay is still 70% bigger than the third largest ecommerce site, Walmart.

 

Source:Emarketer

Overall though, all things equal, you should expect Amazon to bring in 10x more sales than eBay.

Advantage Amazon

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.

number of amazon sellers by revenue

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.

Advantage eBay

eBay is less Competitive than Amazon: There are almost certainly less eBay sellers than Amazon and more importantly, advertising costs are 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.

Advantage Amazon

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.

amazon add a product

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.

Advantage Amazon

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.

Box for shipping

Selling Fees – eBay vs Amazon
Fees eBay Amazon
Selling Price $49.99 $49.99
Selling Fees $4.99 $7.50
Payment Processing $1.45
Shipping Fees from Amazon FBA (2-Day) $9.52 $5.85
Total Fees $15.96 $13.35
Miscellaneous Fees
Advertising Fees Approximately 0-25%+ of  Sales
Monthly Fees $0/$24.95 Basic eBay Store $39.99 (Professional Selling Plan)

Advantage Amazon

Amazon has cheaper fees than eBay. When comparing two packages that are exactly the same, Amazon is roughly 20% cheaper, including shipping costs.

Which Pays You Quicker: eBay or Amazon?

Once you start selling products, you want to actually get paid for them!

In terms of payment time, this is one area where eBay is much better than Amazon. For eBay you get paid the second a buyer purchases your item.

For Amazon, however, you do not get paid until after the buyer has purchased the item and Amazon has shipped the item to the buyer. Further, there’s a holding period of approximately two weeks on your funds.

Advantage eBay

eBay pays you Quicker Than Amazon If you want your money quickly, eBay is the clear winner.

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.

average cost of advertising on Amazon vs eBay

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.

Advantage eBay

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 ebook conversion rates

In my previous company, we gave away a free eBook to eBay customers to help generate an email list.

Advantage eBay

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.

Amazon account health

Despite Amazon having a very intensive account health dashboard, it often has very little correlation to account suspensions.

Advantage eBay

eBay is more fair to sellers than Amazon.Let’s be clear – both eBay and Amazon have reputations for poor service for sellers but Amazon is the hands-down winner for the level of poorness.

Which Has More Good Product Categories to Sell in: eBay or Amazon?

What Product Categories Do Amazon and eBay Excel At?
eBay Amazon
Good Categories
  • Used products
  • Collectibles
  • eBay Motors
  • Customized/Unique products
  • Electronics Parts/Accessories
  • Most categories except Used, Customized, and Impulse Buy items
Bad Categories
  • Commodity items
  • Customized items
  • Grocery
  • Discovery/impulse products
  • Customized items
  • Unique one-off products
  • Used products

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.

Advantage Amazon

Amazon excels in most product categories but eBay still dominates others.Generally, if you’re selling a new, commodity item, Amazon is your place to be. If it’s used, then look to eBay.

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 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

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.

Other Channels Outside of eBay & Amazon

Despite the fact eBay and Amazon are the juggernauts of online selling, there are other channels to sell your products on. You can see our full summary of other sales channels here.The best channels are:

  • Shopify/Your own website
  • Houzz
  • Walmart.com
  • Etsy

Once you’ve maxed out eBay and Amazon’s potential, the next logical channel is to start selling on your own website (and most people will do this through Shopify). In fact, your own website will support your sales on eBay and Amazon so it’s best to launch your website concurrently with selling on eBay and Amazon.

If you’re selling any home related products, Houzz can be an amazing channel. It’s not uncommon for a seller in a niche like home decor to get 25-50% of their sales through Houzz. If you’re not selling a home related product though, Houzz will be of little use to you. Etsy is similar to Houzz if you’re selling anything homemade or craft related.

Finally, Walmart for years has been trying to promote its marketplace. For better or worse, most people will get relatively few sales through Walmart at this time so it should not be a priority for you.

Conclusion- Which is Better Overall: eBay or Amazon?

summary eBay vs Amazon

Amazon Wins!

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 e-commerce 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. If you’re just getting started selling on Amazon and looking for more information, check out our article How to Get Started Selling on Amazon.

Do you think Amazon is the best sales channel for sellers? Let me know your thoughts in the comments below.

  • About The Author: Dave Bryant

    Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He's also a former Amazon warehouse employee of one week.

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6 Comments

  • Shon
    February 23, 2020 Reply

    Great article! The information was very helpful. I am new to selling, however have sold a few pieces here and there at eBay over the years, but would like to begin selling on a higher level. So I am researching all that I can about the process of both companies. Your article was very informative.

    • Dave Bryant
      March 14, 2020 Reply

      Thanks.

  • Abu Waleed
    May 22, 2020 Reply

    Good write up, very informative. Keep it up.

    • Dave Bryant
      May 22, 2020 Reply

      Thanks!

  • David
    June 9, 2020 Reply

    Thank you. Very well written.

    Ive been buying and selling on Ebay for years but have never used Amazon at all. Every time I was looking for something Amazon was always a lot more expensive and I couldnt understand why anyone would buy there. I still dont. Not once was something cheaper on Amazon. I dont get why they are so popular. I guess people are just stupid.

    I have recently started selling on Ebay again and was thinking of trying Amazon but you convinced me not to.

    It sounds like the same difference between selling on Craigslist compared to selling on Facebook. Morals and integrity compared to a complete lack of them.

    I sell a lot of stuff locally on Craigslist but rarely use Facebook even though there are a lot more customers on Facebook. Because the Craigslist customers are way less annoying. Facebook customers have no problem with wasting all day asking 20 questions, getting directions and your address, telling you they want it and will be there to buy it- then never show up or talk to you again and when you ask if they are coming you get a rude "Im no longer interested". ( I dont care that I wasted your whole day and that you told other buyers it was pending sold and they bought from someone else).
    Common on Facebook, rare on Craigslist. It takes about 3-5 days longer to sell on Craigslist but it's worth it.

    Sounds like Amazon, like Facebook, you get a younger crowd that has little to no empathy for the seller or other people in general. I have worked with several Milinnials and they were nice but had the worst character. They thought everything should be free and thought nothing of buying something they needed, using it then returning it for a refund when they no longer needed it. They didnt understand at all why I said they were stealing.
    You said Amazon has a much higher rate of returns..Ive NEVER had any of my 1005 sales returned on Ebay and have 100% customer satisfaction. I had ONE guy who complained on Ebay that I overcharged him $2 for shipping. I sent him $2 and he bought from me again! I imagine it wouldnt have been so easy on Amazon.
    Ill stick with Ebay. Thank you for saving me the time and frustration of trying Amazon blindly.

  • M Ramo
    July 18, 2020 Reply

    I gotta say im not sure about the more ruthless of the two, id say they are even or maybe eBay being a little more cutthroat. I sold on both platforms starting in 2018 when i officially started my business in TX. I had much more experience on ebay since i started selling there almost from when they started but just a few items a year. when i started moving items is when i noticed the bad side, ebay has made me eat losses even when fraud is clear and proof is provided, they don't look at evidence and don't care, they say its part of business. i sold a 50in and about an hour after delivery i am notified they want to return it, red flag, I already knew i was screwed. I had the tv sent to me instead of the supplier who sent it, sure enough, i received a different tv, different upc different everything. it was close but nope, upc and serial numbers don't lie. sent ebay the proof and was told too bad, part of doing business. If you ever met a seller who seems like a hardass, this is why.

    No Amazon, i got everything in order to do things right, started my business and went smoothly they do and will suspend sellers, or so i hear but the strange thing is i never was, i got sick in the early part of 2019 so i sent them an email asking to suspend my account and stop charging me the monthly fee. i dont remember what it did but i know fees were less by opting in this program. they stopped the fees but left my lisings up, and too this day they are still up i think. But for over a year people would buy stuff from me, wait for item, never received item, have their money refunded. i would get they email is how i knew, and they never suspended the account. I would laugh but never tried to correct it since i had proof that sent them an email suspending my account. i may go back someday to ecommerce so its good to know my account is already to go if i do.

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