admin_fortress | Nov 03, 2021
Published in The Marketplace Playbook
Is it better to sell on Amazon or eBay? They are two of the top online marketplaces to sell products, but how do you as a seller choose between the two? It depends on what you are looking for, as they are actually quite different from each other with their own sets of pros and cons. Here we will explore the benefits of both e-commerce sites and the main differences between selling on Amazon vs. eBay so you can decide for yourself what’s right for you.
Pros of Selling on Amazon
If you’re looking to sell products online, there’s a chance Amazon has crossed your mind. And it should — it is consistently the leading online marketplace for consumer shopping. In fact, it is predicted that by the end of 2021, Amazon will account for 50% of the entire e-commerce retail market’s gross merchandise volume (GMV) in the U.S., up 6% from the previous year’s market share. With that type of market dominance, it’s hard to ignore the fact that Amazon’s allure is here to stay. Let’s look at some of the advantages of selling on Amazon.
Subscriber Reach & Trust
There’s no denying that people love Amazon and are willing to be Prime members to receive the benefits that come with having a membership. As of 2021, Amazon has over 200 million active Prime subscribers worldwide. There is a certain trust consumers have in Amazon which can be attributed to their painless return policies, accommodating customer service and quick shipping. Having complicated return processes or unhelpful customer service can be detrimental to a seller’s business and these are some of the top things that Amazon is efficiently working to avoid.
Setup Made Simple
It couldn’t be easier to become a seller on Amazon. The ease of setup is one of the reasons why sellers choose to use Amazon as their online store. Aside from being uncomplicated to sign up, Amazon also has a wide variety of tools and educational resources to help even the most novice sellers get started. To start selling on Amazon, just sign up for an account at Amazon’s Seller Central.
Amazon provides sellers with a wide range of capabilities to market their products and grow their sales. Amazon Advertising can help you achieve your advertising goals and promote your products through Sponsored Products, Sponsored Brands, Sponsored Display, and Storefronts. You can also do keyword research and find relevant keyword terms to use in your product listings and descriptions so your listings perform better in search results. If you are the owner of a business, you can manage display ads, video ads and more through the Amazon Delivery Service Partner (DSP) Program if you are eligible.
Best-In-Class Fulfillment & Shipping
We mentioned shipping being one of Amazon’s strong suits. Compared to eBay, the shipping on Amazon is more likely to be much faster, especially with options like 1-day, 2-day and even same-day shipping, while shipping on eBay depends entirely on the seller and location you are buying from.
One of the biggest draws of becoming an Amazon seller is the option to have fulfillment by Amazon, or “FBA.” What this means is that for a small fee, you can send your items to Amazon to store in their own warehouses and fulfill your orders for you, giving you the option to take advantage of some of their fast shipping options. The FBA feature makes it simple for sellers to have a hands-off approach to selling their products. Amazon handles the storing, packaging, shipping, deliveries, and even returns and customer service.
Cons of Selling on Amazon
Playing By The Rules
When opening your own storefront and listing your products on Amazon, you’ll notice there are a lot of guidelines to follow. That is because Amazon has the right to remove listings or sellers that do not comply with the guidelines they have in place. Although not a dealbreaker, this is one of the reasons why selling on Amazon could be a little more challenging.
There are a lot of sellers on Amazon — and we mean a lot. While it is great that Amazon gives you access to a massive audience reach, the competition on the online marketplace is heavy, and everyone is going for those top search results. It could be difficult to break through the noise at first and it might take you a while before you start generating many sales because of this. To stand out from the competition, you’ll need to be thoughtful and strategic in creating your listings and be sure to have adequate descriptions and photography of your products.
One of the biggest pain points of Amazon is the fact that almost anyone can sell anything (well, almost anything) on Amazon, including your products. They are called resellers, and they often cause damage to brands as they are unregulated sellers of branded products. This means that you have no control over how your own products are being sold by this other party, which could potentially hurt your brand. If you are struggling with resellers, it could be tough to figure out how to combat them on your own. However, there are consultants and agencies in the Amazon world that are known for solving this exact kind of problem.
Pros of Selling on eBay
Now let’s get into why selling on eBay might be the right decision for you. The truth is that they are two very different marketplaces and it will all depend on what it is you need as a seller to grow your business. While Amazon’s annual sales and reach are impressive, eBay isn’t too far behind as the second most popular online marketplace with $100 billion in gross merchandise value in the U.S. in 2020. As of April 2021, eBay was also the second leading marketplace with 1.7 billion monthly site visits.
Amazon may have thousands of products available, but as a seller, those products can only fall into 36 categories on Amazon. eBay has over 20,000 categories on its website, giving sellers a more diverse range to choose from.
Generally, if you’re using eBay for your seller account, you will most likely be paying fewer fees than you would if you went with Amazon. Depending on what and how you want to sell, eBay charges insertion fees, final value fees, and payment processing fees (if you are using PayPal to manage your income). However, if you are looking to have a specialized listing, eBay adds optional listing upgrade fees, which could add up. In any case, it’s good to review every platform’s fees before signing up in order to calculate the exact costs you will have to pay.
While Amazon releases payments every two weeks, eBay releases payments directly to sellers’ bank accounts instantly, as well as PayPal accounts. Your payment option is also completely up to you, with the option of receiving a check in the mail or money order.
Cons of Selling on eBay
Due to some reputation issues, eBay customers are not as likely to trust its sellers as much as Amazon. This is because they have had issues with scammers or fraudulent items being sold on the platform. Shipping times aren’t also guaranteed with eBay; as a customer, you are dealing with a seller who handles the product shipping. Although eBay has made massive improvements over the years to combat these hesitations, some customers are still reluctant to put their trust in eBay sellers.
It’s obvious that Amazon has its shipping operations down pat. Their seamless customer experience when it comes to deliveries is close to unmatched. As a seller, it is more difficult to ship on eBay as Amazon has its FBA (Fulfilled By Amazon) option, where Amazon handles everything from warehouse storage, to packing, shipping and delivering items to customers. eBay sellers need to handle their own packaging and shipping operations, which can be a nuisance and add costs to your business.
Smaller Consumer Reach
Although eBay gets billions of monthly site visits and has a global reach, Amazon boasts 5.2 billion monthly site visits compared to eBay’s 1.7 billion monthly site visits as of 2021. This could mean less competition for eBay sellers, but the exposure that Amazon gets is far outstanding in comparison.
No matter where you decide to sell, having an understanding of both marketplaces helps you make an informed decision. Launching a business is a big deal, so it’s good to know your options before you get started! Now that you know some of the key differences between Amazon and eBay, which will you choose? The good news is that you don’t have to decide between the two. You can ultimately choose to try out both before deciding which one is a better experience for you or decide to stay on both for a multichannel approach.
Having a well-thought-out online marketplace strategy is key to succeeding as an online seller. At Fortress Brand, we represent highly acclaimed beauty, health and wellness brands on the Amazon marketplace and provide them with a full suite of in-house services, including performance marketing, brand management, reseller control, inventory management and more. Our tech-enabled data capabilities also allow us to make data-informed decisions for your brand and provide performance insights in real-time.
Partnering with an agency like Fortress takes the guesswork out of selling on online marketplaces. We purchase your inventory upfront — at no cost to you — and take it all from there to ensure successful sales growth.
If you’re interested in a partnership, feel free to send us an email at [email protected] to get started. We’d love to hear from you!