Selling on Amazon and eBay

E-commerce sellers now have many options for where they can sell their products online. Shopify, Walmart, and Etsy; all offer sellers the opportunity to get their products in front of consumers.

But there are two platforms that have been around longer than others. Amazon and eBay. And as the oldest online marketplace (and top-performing #1 and #3 e-commerce sites, respectively), you might consider selling on either.

Amazon and eBay are both well-established and have been around since the mid-1990s. Amazon originally launched in July 1994 under the name Cadabra (changed its name to Amazon in 1995), followed shortly by eBay in September 1995.

But how do you know which one is more effective for you?

There are plenty of arguments for both, so we're looking at the differences between the two marketplaces to determine which store is the best overall option for your type of business. Masu.

Interested in starting an e-commerce business? Our guide to selling on Amazon and eBay will tell you everything you need to know.

Do consumers trust Amazon or eBay?

When it comes to consumer trust, Amazon tends to dominate its competitors. In fact, Amazon is so focused on gaining and maintaining customer trust that it's built into the company's vision, mission, and values.

Amazon Return Policy and eBay Return Policy

Amazon. Another reason why Amazon is a go-to for online shoppers is that it's easy to return items. The AZ Guarantee allows shoppers to receive a full refund if they are not satisfied with the quality or delivery time of their purchase.
eBay. In contrast, eBay's policies are much more complex when it comes to returning items and receiving a full refund. Not to mention, a seller can even check his eBay “no returns” box, leaving buyers with no recourse if they are dissatisfied with the product.

As a seller, you might think that's a good thing. But in reality, it can be extremely detrimental to your business.

Marking your listings as “no returns” sends a signal to potential buyers that you can't trust what you're selling. And as a consumer, what kind of companies do you buy from? Those who continue to support you after the purchase, or those who take your money and walk away?

That's why by ensuring post-purchase support, Amazon builds brand loyalty and gives shoppers the peace of mind they need to buy products they might not otherwise buy. Masu.

And as a platform seller, you can benefit from that trust.

Read more | How Amazon's return policy will affect sellers in 2024

eBay and Amazon fulfillment methods

When selling on eBay, you have one choice when it comes to fulfillment. Pack and ship orders yourself (or hire a third-party fulfillment center).

Amazon, on the other hand, gives you two options: fulfill your order yourself (Fulfillment by Merchant, FBM) or have Amazon fulfill your order (Fulfillment by Amazon, FBA).

And that second option, Amazon FBA, is what sets Amazon apart.

operation. While eBay requires sellers to run all aspects of their business in-house, Amazon offers to cover a significant portion.
Sense of fulfillment. By storing, picking, packing, and shipping your items for you (don't forget, we also handle returns and refunds!), Amazon frees up your time to focus on other areas of your business. I'll give it to you.
money. And in addition to saving time, Amazon FBA can also save you money.
Fee. If you use Amazon's FBA program to fulfill your order, Amazon's fees will be higher. However, the cost difference decreases significantly when you calculate the cost of storing, packaging, and shipping the product.

However, in the end, how you bring your product to life is completely up to you. It's great to have choices, but when you sell on eBay, you don't have any.

Want to learn more about fulfillment methods? Check out our Amazon FBA vs. FBM comparison guide.

How much does it cost to sell on eBay and Amazon?

eBay fees are generally lower than the fees you incur when selling on Amazon.

eBay fees

If you sell on eBay, the fees you must pay are:

Insertion fee: This is the fee charged when a seller creates a listing on the site. According to eBay, sellers are given “250 zero-fee listings” each month. And if you run a store on your site, there are even more possibilities.
final value fee: When an item sells, eBay receives a percentage based on the final sale price of the item. This includes shipping and handling charges, but excludes sales tax.

This is the basic “final value” fee schedule for most items and the corresponding “insertion fee.”

Payment fee: Because eBay currently requires sellers to use a managed payment system, this fee is included in the “Final Price” fee.
Optional listing upgrade fee: These fees only apply if you want to create a specialized and prominent listing. Optional upgrades include adding bold fonts, adding subtitles, and setting a minimum/minimum price for your product.

When you use eBay listing upgrades, fees start adding up quickly. However, you can use eBay's pricing calculator to determine how much you need to pay before listing your item.

For example, for a fixed price item in the baby category that sells for $22.95, eBay's fee would be $3.44. On top of that, if you plan on offering free shipping, you'll need to absorb that cost.

Despite this, eBay's fees are lower than Amazon overall.

amazon fees

For Amazon, fees vary depending on the product being sold and its shipping method. Either FBA or FBM.

To understand the fees associated with items sold on FBA, let's take a look at one of Jungle Scout's Million Dollar Case Study (MDCS) products: washable pee pads.

Washable dog pee pads are currently on sale for $36.99. By using Amazon's FBA calculator (for US stores) and entering that price point into the “Product Price” field, you can get a good idea of the fees you will be charged if you sell his FBA and FBM for pee pads. can.

Note: The total cost of “Your Fulfillment” (FBM) does not include shipping charges. If you choose to sell FBM, you will need to factor in shipping costs when determining your profit margin.

FBM fee

When you sell FBM, the only fees you incur on your products are Amazon Selling Fees:

Amazon referral fee: For each item sold, Amazon receives a percentage of the referral fee calculated based on the total sales price. Fees vary depending on the category of product being sold, but on average, you can expect to pay a 15% referral fee for each sale.
Fixed closing fee: This fee only applies if you have a personal sales plan, not a professional sales plan. If you are a private seller, you pay an additional $0.99 for each item sold.

Read more | Comparison of Amazon Personal Seller Plan and Pro Seller Plan

FBA fees

However, in addition to the Amazon Selling Fees, FBA sellers must also pay the following fees:

FBA fulfillment fees: FBA fees are fees charged by Amazon to fulfill orders for products based on the weight and size of the product.
Monthly storage fee: Amazon charges a monthly inventory storage fee for the space your inventory occupies within its fulfillment centers. This fee is calculated by average cubic feet per day.

So if you sell a product similar to pee pads on Amazon for $36.99 and you're an FBA seller, you'll have to pay a minimum fee of $14.59. Additionally, if you are an FBM seller offering the same item at the same price, you will be required to pay a minimum fee of $6.54 before shipping.

However, these aren't the only fees you have to pay as an Amazon seller. Regardless of fulfillment method, all Amazon sellers are required to pay the following fees:

Individual item or subscription fees: When selling on Amazon, you can choose between two different seller accounts: personal or professional. If selling as an individual, he must pay a fee of $0.99 for each unit sold. Professional sellers, on the other hand, pay a monthly subscription fee of $39.99.
Refund processing fee: These fees are only incurred when a customer requests a refund, but it's important to know that Amazon charges a fee for processing that refund. This fee will be $5.00 or 20% of the refunded fee. whichever is smaller.

Learn more about Amazon fees.

Amazon Prime membership registration

One of the key advantages Amazon has over eBay is Amazon Prime. While this may seem like it only benefits shoppers (much like Amazon's return policy), it's one of the main reasons Amazon has such a large and devoted customer base. One.

Because shoppers pay a monthly fee to guarantee fast delivery, they're more likely to buy from Amazon instead of wasting their Prime subscription.

Additionally, loyal Prime members don't just visit Amazon first before trying other online stores. They also spend money on the site during major holidays like Black Friday and Prime Day.

And considering there are over 168 million Prime users in the US alone (and more than 200 million worldwide), this means that sellers on the platform have access to a huge number of people who shop on the site on a regular basis. It means instant access to users.

What types of products can I sell on Amazon and eBay?

Since its founding in 1995, eBay has been a marketplace for others to do business. Amazon isn't like that. Instead, it has turned into a retailer in addition to being a marketplace for third-party sellers.

Additionally, unlike Amazon, eBay does not limit what you can sell on the site based on product quality. From new products to worn-out used items, eBay sellers can sell virtually anything. (Of course, illegal items are strictly prohibited.)

This is where eBay really shines.

Sale of used items

Compared to Amazon (although you can buy used items on both), people prefer eBay when it comes to buying used items. Also, its auction model is perfect for selling second-hand items, giving buyers the opportunity to buy at competitive prices.

The only exception is the sale of used books. In most cases, Amazon is the best marketplace for anyone looking to sell used books (which makes sense, considering Amazon started as an online bookstore).

Although eBay is known as a platform for buying and selling used and unique items, almost 80% of eBay's inventory is new. So if you sell private label products on Amazon, eBay is another opportunity to reach more buyers.

But when looking for items that are new or in good condition, most shoppers gravitate toward Amazon. In fact, a whopping 63% of consumers use Amazon as a search engine when looking for new products.

Business Model: eBay vs. Amazon

Still, Amazon and eBay are both viable options for selling new and used products in today's e-commerce world. In fact, all business models work well for both:

Own brand: Private labeling means branding your own products and selling them on Amazon.
Retail arbitrage: Retail arbitrage is when you buy other brands' products from retail stores and resell them on Amazon for a profit.
Online arbitrage: Online arbitrage is buying products from other brands from online retailers and reselling them on Amazon for a profit.

Wholesale: Wholesaling means buying products from other brands at wholesale cost and reselling them on Amazon for a profit.
Handmade: Handmade means making a product yourself rather than having it manufactured by another company or supplier.

By researching your products, finding the right suppliers, and creating a list that attracts buyers, you can generate profits that allow you to grow and expand your e-commerce business year after year on both platforms.