Amazon vs eBay – Where Should You Sell Your Products?globalcustomerservice
Are you an e-commerce entrepreneur or on the way to becoming one? There is definitely no shortage of where you can list your products. However, two of these platforms; Amazon and eBay seem to be ahead of others – easily because they have been around much longer than the rest.
Over the years, people have debated which of these two platforms is best to sell products. But, which one is indeed better? Well, there are many factors to consider before you can confidently choose any as the best. In this piece, we will look at some of these factors.
Selling Online — The Pioneer Companies
As stated earlier, Amazon and eBay are the pioneer companies of e-commerce. Both companies emerged in the 1990s and have facilitated the expansion of e-commerce globally. Over the years, Amazon has gloriously expanded from being just an online bookstore to a superstore that sells both physical and digital products. On the other hand, eBay transformed from being an online auction marketplace for collectibles to becoming a marketplace for a wide variety of products. In 2015, eBay further developed the growth of e-commerce payment platforms by acquiring PayPal—A prolific revolution of digital payments.
History of Amazon and eBay
Amazon was founded by Jeff Bezos in the garage of his rented apartment in July 1995. It initially opened as an online bookstore to make books accessible to any reader regardless of their location. The goal was quickly achieved because, within the first two months of business, Amazon sold books to all 50 states of the United States and over 45 countries worldwide.
In 1998, Amazon moved to sell more than just books. They included a few products like toys, computer software, and video games. While their product category was growing, Bezos also started acquiring and starting subsidiary companies. He invested heavily in computers and one day he had an idea, they would help people run their companies with the aid of computers. By 2006, Amazon Web System (AWS), a cloud computing company that hosts businesses was launched. As the years advanced, Amazon had other subsidiaries and expanded to sell just about everything on their marketplace.
eBay, initially called auction web, was founded by Pierre Omidyar in 1995. Before then, Omidyar had been greatly interested in the potentials for web-based commerce. He began testing that potential through his own online marketplace to see if he would get the masses interested and it certainly did. His hobby with which he made a few bucks on weekends became a million-dollar business a year later. He achieved this feat when he started charging users for transactions done on his marketplace. eBay, over the following decades, continued to grow. During this time, it continued to sharpen its simple business model – bringing buyers and sellers together and charging for every transaction completed.
Amazon vs eBay – What Platform is best for Selling?
Some factors determine which one of these giants you should set up shop in. As a simple comparison, we’ll take a look at Amazon and eBay under the factors below;
The Business Model
Amazon and eBay are both big names in the world of e-commerce. Therefore, at first glance, it appears like they are doing the same thing – helping people sell online. Well, this is true. But if you take a deeper look, you will discover that they are fundamentally different. Amazon is both a retailer and a marketplace while eBay is solely a marketplace. Depending on your product type, you must factor this before setting up on any of these marketplaces.
On Amazon, products are listed at a fixed price. Whereas most eBay sellers list products auction-style, where the highest bidder wins when the time runs out. Of course, you can make more money with the auction-style business model. However, this model is a little less reliable because you cannot always predict your bottom line every month. On the other hand, when you sell your products at a fixed price, you have a better idea of potential profits. Just to be clear, products can be listed at a fixed price on eBay, it is just not very common.
Size of the Marketplace
The goal for any e-commerce merchant is to reach a wider audience and increase sales. However, the product you are selling can be more important in some select locations than others. When it comes to the size of the marketplace, Amazon has a far more enormous marketplace. In 2019, Amazon had a United States market share of 45% while that of eBay was at about 5%. According to Statista, Amazon recorded about 0.4 billion global visits within the span of February to June 2021. This is far much higher than eBay’s 109 million global visitors monthly.
Incentives for Sellers
Third-party sellers sell their products on the Amazon marketplace with a commission-based system called FBA – Fulfillment by Amazon. This means that sellers send products to an Amazon warehouse and from there they are shipped. With this FBA, anyone can set up an account and start selling on Amazon. eBay has no system like FBA. So, when it comes to shipping fulfilled orders to the buyer, the decision is totally up to you. This means that you are solely responsible for the packing and shipping based on the shipping method your customer chooses. However, eBay recommends that you provide your customer with different shipping methods to boost your chances of making sales.
There is no one size fits all approach to choosing the right marketplace for your business. The way to go is to weigh deciding factors against each other and match each against your business’ offerings. The ball lies in your court on this one and we’re rooting for you to make the best choice for your business.