Amazon and eBay have a combined 7.3 billion monthly visitors. That’s because in today’s COVID-influenced marketplace, everyone’s staying away from brick and mortar stores and shopping from home. If you’re thinking of expanding your business online or just starting out in the eCommerce world, there’s been no better time to start making serious profits.

Which platform best suits your specific business, though? That’s what we set to answer here! Read on for a head-to-head comparison of these two eCommerce juggernauts, and decide which one’s the better fit!

Breaking Down The Numbers

Amazon and eBay are almost always ranked within the top three B2C eCommerce markets in the world. However, just looking at the numbers, Amazon has an edge with more active monthly users and a larger overall market share. Take a look.

Amazon Marketplace

On top of those numbers, Amazon also accounted for over 50% of all US retail sales in 2019. Their mobile platform dominates the shopping app charts.

A contributing factor to this is that almost 45% of US residents have an Amazon Prime account. They boast a 14% global market and operate in 58 countries. It is the #1 eCommerce platform in North America, Western Europe, and India.

They aren’t just an online store, either. Over the years Amazon has greatly diversified itself by offering myriad products and services.

There are a lot more stats we can go over here, but you probably get the point by now. Let’s take a look at eBay now!

eBay’s Marketplace

eBay accounts for 5% of all US eCommerce, recently giving up second place to Walmart. Its unique way of selling products creates challenges for its 180 million users that they don’t see on Amazon. Generally speaking, customers tend to buy only from highly-rated sellers, which means competition is a lot stiffer.

That’s not to say eBay doesn’t deserve its spot as a top eCommerce platform, though. Amazon’s reach is matched only by other massive, global platforms such as Alibaba.com. No matter which platform you decide upon, if you position yourself correctly, you’ll make some profit. Learn how to position yourself for maximum success by finding the right keywords with our Halo Effect Method here.

A large portion of eBay’s sales are from an age demographic of 35-49. On the other hand, Amazon tends to sell to those in the 45-54 age range.

One area eBay has Amazon beat is in international sales. Around two-thirds of Amazon’s sales come from North America, while over half of eBay’s comes from around the globe.

So, Who’s Bigger?

Amazon, by far. In the last 12 months, they have reported $321.78 billion in revenue (as of June 2020) as opposed to eBay’s $10.71 billion.

What Options do They Provide Sellers?

Both platforms have very different sales models. Amazon sellers must abide to a fixed price, whether or not they’re selling new/used products. eBay allows sellers to either create auctions (customers bid on a product) or fixed price listings.

eBay attracts a lot of customers because of the huge amount of product categories and savings potential the auction format provides. In an auction, sellers set a certain amount of time before the bidding ends, and customers outbid each other until the end of the auction. This is great for sellers who aren’t 100% sure of the value of their product or are selling unique antiques and specialty items.

Amazon’s fixed price system is for sellers who have performed extensive research into product niches and know the exact value of what they’re selling. Sellers with large inventories also benefit from the huge warehouse/shipping infrastructure Amazon provides.

Third-party sellers are allowed on Amazon, though a lot of its offerings still remain in-house.

Which One’s Better For Selling?

The answer to that depends on the kind of business you run. If you’re looking for a quick, generalized answer: eBay tends to be more seller-centric simply due to its numerous listing options.

Amazon is more buyer-centric. You can tell just by looking at the language in their Seller Code of Conduct.

What Does it Cost to Sell?

Amazon offers sellers two plans: individual or professional. With an individual plan, you pay $0.99 per unit sold and a referral fee that varies based on the category you sell in. They’re ideal for businesses that sell 40 or less items a month.

The perk of this plan is that there are no monthly subscription fees. You only pay Amazon for items you sell. However, a large downside to take note of is that you cannot use Amazon Sponsored Ads to promote your business.

The professional plan costs $39/month (coming out to $468/year) and grants sellers to Amazon Sponsored Ads as well as an entire network of resources designed to help you scale.

No matter which plan you choose, you will always be hit with fees of some kind. That’s why it’s incredibly important to know your sales velocity and inventory levels. Our Business Dashboard helps you easily keep track of all the numbers.

Amazon’s Fees

Amazon’s FBA calculator helps you gain a clearer understanding of the kinds of fees you’ll pay. Take a look.

Your final fee amount depends on the type of products you sell as well as the fulfillment method you choose (FBM or FBA). For this example, we ran the calculator with a product priced at $29.94. The right column displays the following costs:

• Sales fees: A percentage ranging anywhere from 6%-45%, depending on product category. The minimum price you can set is $1. In our case, the fees come out to $4.49.
• Fulfillment cost: This only applies to FBA items, and is based on the dimensions of the product. Here, it’s $7.32.
• Storage cost: How much it costs to store your inventory in Amazon’s warehouse for one month. In our example it’s $0.43.
• Landing cost: This fee is $0.00 because it’s only known by the seller. It is a combination of the cost to manufacture and to ship the product.

Note: These fees are on top of the $39.99/month and $0.99/unit fees associated with your account. If you sell products through FBM, you do not factor in shipping costs.

You may notice an item called the closing fee too. This only applies to media such as books, video games, computer games, videos, and video game accessories.

What eBay Charges

eBay uses 2 different types of fees:

• Insertion fees: A fee for listing your product. You get 50 free listings a month. After that, you are charged $0.35 per listing as well as each product category you have it under. Refunds do not apply if your item ends up not selling.
• Final value fees: Once you make a sale, eBay charges a fee based on the final amount sold. This includes shipping and other product costs.

Here is a summary of their fees, according to their customer support page.

These additional fees also apply:

• Listing upgrade fees: Users can pay extra to upgrade their listing to include premium features such as bold fonts, subtitles, and minimum price setting.
• Supplemental service fees: Any services that eBay offers beyond your listing fees, such as refunds and shipping label creation.

Be wary: fees can start stacking up fast if you just list a ton of stuff. They also offer a fee calculator to help you plan things out. Overall, however, eBay’s fees are less than Amazon’s.

Refunds And Returns

Amazon’s buyer-focused generous refund policies have earned them a significant amount of trust. A lot of this is due to their strict set of buyer protection policies, in particular their A-Z Guarantee. This protects buyers from black-hat third party sellers, regardless or whether it’s because of the item’s condition or the delivery time. This makes it extremely easy for customers to request refunds, and can result in penalties if sellers don’t comply.

They also offer an incentive to sellers called the Refund Administration Fee. Basically, whenever a seller refunds someone, Amazon will refund the seller the referral fee. Take note though that they deduct an administration fee of 20% or $5, whichever is lower.

eBay’s seller-centric philosophy results in far more complicated refund/return policies. This is best demonstrated by providing sellers with an option to not accept returns.

In theory this sounds like a good idea, but from a customer service perspective can lead to problems. Implementing a no return policy does not create trust between buyers and sellers.

Prime: Amazon’s Ace in The Hole

Over 150 million worldwide customers subscribe to Amazon Prime. At $12.99 a month, it offers customers numerous perks such as free one to two day shipping on most products, exclusive discounts, film/TV streaming, and much more.

Think of it like a gym membership: you might as well use it since you’re paying for it. How does this help sellers? By providing an enormous customer base you can’t find anywhere else, all willing to spend tons of money on limited time store-wide sales such as Prime Day and Black Friday.

What Kinds of Items You Should Sell on Amazon

Today, Amazon offers millions of products across 36 different categories. Some of these categories are restricted to new sellers and require special permitting. Most of these categories are open to both types of accounts.

Used goods are permitted, though Amazon incentivizes selling new products. Refurbished electronics are also an option as long as they meet a set of criteria called Amazon Renewed. Here are some popular categories:

• Home and decor: Dishware, furniture, kitchenware, storage, bedding, pet supplies, garden/lawn care, appliances, and craft/hobby products can be sold new, used, or refurbished.
• Clothing and Accessories: Any kind of clothing including athletic wear, inner/outer wear, and accessories such as wallets and belts.
• Tools and Home Improvement: New/refurbished hand and power tools along with appliance parts, electrical/plumbing supplies, and building materials.
• Sports: Exercise, fishing, boating, hunting, and team sports products. All new or refurbished.
• Electronics: New, used, and refurbished electronic accessories including cell phones, computers, cameras, office equipment, car electronics, and office supplies.
• Baby Products: New products only. Toys, bottles, clothing, etc.
• Toys and Games: Board games, collectibles, art and craft supplies, dolls, action figures, and more.
• Office Products: New/refurbished office furniture, calculators, printers, and general supplies.

Only Professional account sellers can list products in the following categories: business products, fine art, collectible coins, foodstuff, jewelry, watches, video recordings, computers, luggage and travel equipment, science/industrial supplies, and sports collectibles. Approval is generally needed to do so.

They restrict certain categories to reduce unsafe or illegal items.

You must ensure that you adhere to all of Amazon’s guidelines when selling, including not selling restricted products. It’s always better to play it safe; if they believe you’re breaking the rules you risk getting your account suspended.

Selling on eBay

Although new goods are allowed, eBay’s auction format tends to attract buyers looking for secondhand goods. They call into 11 categories:

• eBay Motors: Automotive parts, cars, boats, sports vehicles, motorcycles, trailers, and more.
• Fashion: Women and men’s clothing, accessories, handbags, shoes, and children’s apparel.
• Electronics: Cameras, drones, portable audio, surveillance and smart home appliances, VR headsets, and more.
• Collectibles and Art: Coins, paper money, antiques, sports memorabilia, pottery, arts and crafts, etc.
• Home and Garden: Similar to Amazon’s home and garden section.
• Sporting Goods: Golf, fishing, cycling, camping/hiking, fitness, and more.
• Toys and Hobbies: Action figures, RC toys, board games, puzzles, etc.
• Business and Industrial: Sub-categories comprising office equipment, facility maintenance/safety supplies, inspection equipment, building materials, and more.
• Health and Beauty: Healthcare, skincare, makeup, hair removal, oral care, vision care, and other beauty/wellness-related products.
• Others: An umbrellas category for things such as pet supplies, tickets/travel, specialty services, baby essentials, gift cards, and anything else that doesn’t quite fit into any of the above categories.

They also have their own set of restricted/prohibited items that you can read more about here.

Creating Product Listings That Attract Buyers

No matter the platform, you have to craft well-optimized listings that grab attention. Customer decisions are made in seconds, so the first thing you have to focus on is getting the right product images.

Amazon allows up to 9 product images for a single listing. These should be professional, high-definition photos that show your product being used by your ideal customer. This helps to immediately create trust and brand loyalty.

Low-resolution images, on the other hand, do the exact opposite. They actually drive customers away as they don’t believe you are selling a legitimate product.

If you want to appear in search results, your title needs to be descriptive while using the right keywords. Long-tail keywords provide the biggest earning potential, as they attract buyers who know exactly what they want and are ready to buy. Our Listing Optimizer tool shows you where to place keywords for the maximum effect.

Product descriptions go a long way towards swaying potential buyers. The more detailed, the better. Format all your important features in bullet point format and address customer pain points upfront to instill confidence in their decision.

The Conclusion

Both marketplaces are fantastic places to start an eCommerce business. Which one you decide upon ultimately depends on the kinds of products you want to sell. Amazon’s great for:

• Selling new products
• Logistical solutions
• Large growth potential
• North American sales

While eBay is ideal for:

• Saving money on fees
• Listing used goods
• International sales
• Handling your own fulfillment/inventory
  

To help you get a better idea of your goals, check out our product research tracking sheet for all your product calculation and organizational needs.

Author

Mansoor Ali

AMAZON FBA CONSULTANT

Mansoor is an e-commerce enthusiast and problem solver. After completing numerous Amazon and online selling courses he applied his skillset to help sellers find financial success within highly competitive niches. Today, he offers Amazon Private Label consultancy services to businesses and solopreneurs around the world.