In 1995, the first item was sold on AuctionWeb. The same year, an online bookstore called Amazon opened for business.
In the 25 years since, Amazon and eBay (formerly AuctionWeb) have become some of the world’s largest e-commerce companies as well as household names.
But which marketplace is better for independent sellers now? This post will examine some of the biggest differences between Amazon and eBay, to help aspiring sellers make an educated choice on which platform to utilize.
Market share
An e-commerce giant, Amazon is one of the biggest and most profitable companies in the world. In 2020, worldwide net revenues hit $380 billion. It currently holds around 38% market share of e-commerce sales in the USA.
eBay’s market share of US e-commerce is considerably lower, at 4.7%. This figure does, however, put eBay at third position, just under Walmart. eBay’s worldwide net revenues were just over $10 billion in 2020.
Competitiveness
Amazon and eBay are highly competitive e-commerce platforms. Amazon claims a total of 9.9 million worldwide sellers, with 1.9 million being currently active. eBay reports to have around 20 million sellers worldwide with 187 million buyers.
One major difference between these platforms is that Amazon is a retailer while eBay is a marketplace.
On Amazon, only 55% of items are sold by third party sellers (based on 2020 statistics). This means that Amazon’s 1.9 million active worldwide sellers have to compete with Amazon for sales on the platform. Third party sales are, however, growing at a faster rate than first party sales.
Audience base
Amazon and eBay are both household names but attract different demographics.
Originally founded as an auction site, eBay is still best known for second hand and one-of-a-kind items. This is despite the fact that over 80% of items sold have a fixed price (‘Buy It Now’) and are brand new, rather than used.
eBay shoppers expect to find deals, with item price being a primary decision maker. eBay encourages this, with buyers being able to haggle with the ‘Make Offer’ feature.
With a huge range of products, Amazon is the go-to online store for millennials, the largest group of digital buyers in the US. Fast, free shipping is cited as the number one reason to shop on Amazon.
65% of US Amazon customers are also Amazon Prime members, a fact that undoubtedly drives brand loyalty. There are around 200m Amazon Prime subscribers worldwide.
Product categories and restrictions
There are over 30 product categories available on Amazon, with about half requiring seller approval. There are also general selling and condition guidelines to abide by.
Though eBay has significantly more product categories than Amazon, no approvals are necessary. Sellers should be careful to consult the index of prohibited and restricted items before listing items.
Refunds and returns
When shopping on Amazon, buyers are reassured by the A to Z Guarantee that allows return of almost any item for any reason. Return shipping is free when the item is considered damaged or defected, by otherwise paid by the buyer.
eBay, on the other hand, permits sellers to choose their own return policy. Buyers who receive damaged or incorrectly described items (or no items at all) can make a claim via the Money Back Guarantee.
Selling tools
Both eBay and Amazon offer a myriad of tools to assist sellers with item listing and promotion.
Amazon is best known for its (optional) ‘Fulfilled by Amazon’ system, that alleviates sellers of the picking, packing and shipping part of the selling process. eBay sellers are expected to manage every aspect of their business, though a new order fulfillment program is currently in the works.
Designed to encourage sellers to sell beyond US borders, eBay’s Global Shopping Program reduces the risk and anxiety concerning international shipping. After the item is sent to a global shipping center in Kentucky, eBay handles the customs paperwork and is accountable for any delivery issues.
Selling fees
As a general rule, the average seller will pay less fees on eBay compared to Amazon.
eBay charges an insertion fee to place the listing, starting at $0.30 but most sellers are eligible for a certain number of zero insertion fee listings. After the item sells, the seller pays $0.30 per order and a percentage of the final sale (Final Value Fee).
On Amazon, the fee structure is a little more complicated. Sellers must first sign up to a individual ($0.99/month, fewer than 40 units) or professional ($39.99/month) selling plan.
Amazon then charges a referral fee for each item sold (8% to 15%). Sellers using Amazon’s FBA program also need to pay fulfilment fees and associated inventory storage fees.
Payment process
Despite the controversy regarding eBay’s new managed payments system, eBay sellers still get paid faster than on Amazon.
Professional sellers on Amazon are paid bi-weekly, while individual sellers can expect funds to be sent every week. There is still a relatively long settlement period, however. Funds are held for 14 days after an order is shipped.
For many years, eBay payments were almost instantaneous. As soon as the buyer paid (usually by PayPal), the seller received the funds. With the new managed payments system, the payment takes two business days to process and then sellers are sent the funds, according to a daily or weekly payment schedule.
Please note that new eBay sellers are subject to payment holds until a selling record is established.
Final thoughts: eBay vs. Amazon
As two of the world’s biggest e-commerce companies, eBay and Amazon both offer plenty of potential for selling.
While Amazon’s huge market share may seem like the obvious target for aspiring sellers, eBay can still be a profitable selling platform. It retains a significant worldwide buying audience and offers some notable benefits for sellers.
Can’t choose between them? Here’s some good news – you don’t have to. Neither eBay or Amazon require exclusivity from sellers. It is possible to sell on both platforms, while also selling on any number of other e-commerce marketplaces as well. And, of course, selling solely on eBay is fine too.
Experienced eBay sellers – do you sell on Amazon too? If not, why not? Share your thoughts on eBay vs. Amazon for selling in the comments section below
