OUR UNBIASED COMPARISON OF AMAZON AND EBAY

OUR UNBIASED COMPARISON OF AMAZON AND EBAY

Thursday, June 18, 2015Global Administrator Online retailers are constantly faced with decisions that can impact their business. One of the major ones being where they should be selling. In addition to your own eCommerce store there are a multitude of marketplaces where you can extend your reach and generate more sales. With new marketplaces emerging into the mainstream, it’s no surprise that the decision can be difficult one. Even with all the options, two reign supreme… Amazon and eBay.

Which marketplace should you choose?

How do you know which is best for your business?

The general rule of thumb is when selling new items in large quantities, Amazon is probably the place to be. On the other hand, eBay is a good option for those one-of-a-kind items that are begging for a good bidding war!

If you’re still not sure which one is best, we compiled a general list of our un-biased comparisons of the two platforms.

Concept/Format

Amazon    
Amazon is a true marketplace where you can virtually sell anything. There is a listed price where buyers can purchase the product and read consumer reviews. Generally, the items sold here are new.    

eBay
eBay follows more of an auction model where you can place your item(s) up for auction. The highest bid from the top buyer wins. Generally, this is a good place for collectables and one-of-a-kind items (used items).

Fees/Payment Method

Amazon    
Amazon does not require upfront payment on listing items, unlike eBay. A seller should, however, consider the higher commissions they ask for. For more information on their structure, click here.  

eBay
A seller will be required to pay to list every item, regardless if they sell or not.  Before selling, it is advised to consider the cost of unsold goods, time re-listing items etc.

Buyer and Seller relationship

Amazon    
Buyers and sellers will rarely interact with regards to a transaction. Amazon is highly involved by playing the middle man between the buyer and seller. This leads to a higher expectation of customer service.    

eBay
Because this is truly a transaction between and buyer and seller, there is quite a bit of interaction between the two parties. Various areas of the transaction are discussed and decided between the parties (ie. payment and shipping).

Reviews

Amazon    
Amazon is known for their reviews. In addition, it does not penalize their sellers by pushing them down the search rankings for having poor reviews. Therefore, the reviews and buyer feedback is more for buyer education on the product.    

eBay
eBay has placed a lot more weight on their buyer reviews. So much so that they penalize their sellers for having poor reviews and ratings by lowering their search rankings.

Returns
Amazon   
Amazon has their A-z Guarantee. This gives buyers piece of mind that they will be able to get a refund on items received that were not as they were promised (within 90 days). This is backed up by Amazon playing an active role between the buyer and seller.    

eBay
The return and refund policy is decided completely between the buyer and seller. This could provide a positive or negative review for the buyer. Sellers are not required to offer a refund here.

Demographics

Amazon    
Amazon has over 240 million active users spanning across 10 difference countries. Their primary user base is the 20-40 age group. 2014 sales reached over $88 billion.    

eBay
eBay has over 150 million active users in 25 countries across the world. The majority of their user base sits in the 35-49 age groups. 2014 sales reached over $17 billion.

Taxes

Amazon   
It is up to Amazon sellers to determine the tax on any of the items they choose to sell on the marketplace.  

 eBay
eBay offers a service which the seller can choose whether to collect the taxes in addition to the sale price or not. This is appealing for sellers because the taxes don’t have to eat up their profits.

So, the decision is yours!

Weigh your pros and cons and find the best one for your business. Know your business model and choose the one that fits it best. Also, remember your audience and where they will be. In some cases, both marketplaces could potentially be a good fit. When that is true, it’s important to weigh the costs involved as the determining factor.

Sources:

http://www.practicalecommerce.com/articles/60575-Differentiating-Marketplaces, http://www.bloomberg.com/bw/stories/2008-11-07/determining-where-to-sell-onlinebusinessweek-business-news-stock-market-and-financial-advice, http://www.skipmcgrath.com/articles/amazon-vs-ebay.shtml, http://www.differencebetween.info/difference-between-ebay-and-amazon, http://www.ecommercebytes.com/C/letters/blog.pl?/pl/2013/10/1382147636.html, http://www.shopify.ca/blog/6399562-the-pros-and-cons-of-selling-on-amazon-and-ebay, https://www.nchannel.com/blog/ebay-vs-amazon-selling-comparison/, http://www.businessinsider.com/10-mind-blowing-facts-about-amazoncom-2013-3?op=1