Selling on Amazon vs. Ebay: What’s Best for You?
Both experienced and new online retailers need to consider the advantages of selling on Amazon vs. eBay. Choosing the right platform can make a huge difference in your profit margins.
Amazon is generally the more advanced of the two, but eBay has many strong points as well. The following features and variables will help you decide which works best for you:
Fulfillment by Amazon
One of Amazon’s more attractive features is Fulfillment by Amazon (FBA). Using FBA, you can ship your products to an Amazon warehouse and handle shipping to buyers, storage, and customer service for returns.
FBA helps you:
Save Money on Warehousing Space
Even if you start small, as your operation grows, so does your need to store the items you’re selling. Using FBA doesn’t mean that you can avoid the need for storage space altogether.
Amazon charges fees for products that sit in its warehouses for an extended period. You should only send what you think will sell in a given timeframe and store the rest in your warehouse.
Your job is to figure out how much stock to send to Amazon and how much to keep local. While this sounds complicated, you can figure out what will work best for your business once you learn your sales volume for each product.
Reduce the number of workers you need
Operating an Amazon business is time-consuming and labor-intensive. As shipments of products come in, you have to shelve and catalog them. If you run a big operation, you will need workers to help you with these tasks, whether or not you use FBA. Where you really come out ahead is with shipping and returns.
When you sell a product, you have to pick the item off the shelf, pack it, create a label, and get it to a shipping company. The more you sell, the more help you’ll need with this part of your business. If you’re running a large warehouse, even getting to the product could take time.
Sellers inevitably have to deal with returns. Even if your product is perfect, there will be buyers looking for refunds or replacements.
At some point, your business will grow and you’ll have to hire employees to take care of these issues. Or you can use FBA, and Amazon will deal with shipping, returns, and customer service.
Get Items to Customers Quicker
Amazon has its system down to a science. Items sold are picked and packed by robots, humans then put them in boxes, and the product gets shipped within hours of the sale.
Another efficiency you gain by using FBA is that it has warehouses all over the country. If you sell a product and it has the same item in multiple warehouses, it’ll ship from the closest location to the seller.
For example, you might live in Silver Spring, MD, and ship your Sony earbuds to Amazon’s Baltimore FBA warehouse. But Amazon might have the same earbuds from other sellers in its warehouses throughout the United States. When you sell a pair to a buyer from Los Angeles, CA, the company will likely ship it from its San Bernardino location so it reaches its destination quicker.
Free up your time to work on other aspects of Your business
As an online seller, you’ll always have to focus on keeping the appropriate amount of stock, running your business efficiently, and finding new products to sell. As your volume increases, it gets harder to run a tight ship. Although you’ll hire help for every aspect of your operation, removing shipping and customer returns from your to-do list will free you up to focus on efficiency and increasing your product lines.
Issues with FBA
FBA is a fantastic feature, but that doesn’t mean that it comes without any issues. Here are two areas to take into account:
While the system is mostly automated, Amazon sellers using FBA do, at times, have to deal with:
- Delayed shipments
- Lost inventory
- Shorted reimbursements
- Excessive return
It’s not always as simple as sending inventory to an Amazon warehouse and letting things run. After shipping your products to Amazon, you have to:
- Make sure the shipment arrives.
- Check that the correct amount of inventory was entered into the system.
- Reconcile your remaining quantity with sales.
As efficient as FBA is, inventory could get lost or destroyed in Amazon’s warehouses on occasion. The only way to ensure that you never get shorted is by keeping track of all aspects of your inventory. You can use software such as GETIDA to do all of the work for you, but it’s something to be aware of.
It’s helpful that Amazon deals with returns and customer service for you when you use FBA. However, you also lose control of the process.
If a buyer has an issue, it’s up to Amazon if they should have to send the item back or when they get a refund. Amazon holds you to a high standard even if you don’t use FBA, but you do have more control over the return process.
FBA and other third-party fulfillment options for eBay sellers
You could use FBA even if you sell on eBay using multi-channel software. But your fulfillment fees will be much higher.
For example, Amazon charges US$2.50 for small, standard items weighing less than 10 ounces. When you sell through third-party platforms like eBay, Amazon’s FBA fee increases to US$4.95 for 4 to 10 ounces.
There are other options for eBay sellers. Third-party vendors offer fulfillment services, but it would be hard to match Amazon’s FBA on efficiency and pricing.
All products listed on Amazon have an Amazon standard identification number (ASIN). If you want to sell a product that’s listed on Amazon, entering the ASIN will pull up the item’s information.
When you start a listing on eBay, after writing the product title, the system will sometimes have your exact item with all its details. In that case, you could use the information eBay provides.
But typically, to sell on eBay, you must:
- Create a listing
- Take pictures of the item
- Create your own product descriptions
eBay’s platform is user-friendly, so it’s not very difficult to list an item on its site. Still, the ASIN system makes listing products simple for Amazon sellers.
If you sell items that aren’t yet listed on Amazon, you must generate a new listing and ASIN. People who brand products and create a private label have to start from scratch as with eBay.
Rules and regulations
Amazon has more restrictions than eBay. It’s also stricter when sellers break the rules or customers aren’t satisfied with its products. Here are some guidelines and consequences that Amazon sellers face that eBay sellers don’t:
Some product categories require preapproval from Amazon before you can start selling. You’ll have to reach out to Amazon if your items are in any of these categories:
- Automotive and Powersports
- Collectible coins
- Entertainment collectibles
- Fine art
- Sports collectibles
- Video, DVD, and Blu-ray
Amazon does not require approval for the following categories, but products in some of the subcategories do need preapproval:
- Baby products
- Consumer electronics
- Health and personal care
- Office products
- Personal computers
- Pet supplies
- Toys and games
- Video games
If you’re selling products that need preapproval, there’s no need to be concerned. Once you go through the approval process, you’ll be good to go. However, eBay has very few categories that require any preapproval.
eBay is more easygoing about what it allows you to sell. If a buyer wants to purchase your used watch, eBay is happy to have you sell it on its site. With Amazon, you can’t sell used products in all categories, but there are many areas where it’s permitted.
Breaking the Rules
Amazon expects full compliance with its rules and regulations. There’s not much tolerance for sellers who break the rules. For example, if someone lists a restricted item, Amazon could shut down the seller’s entire account. The seller could have many other products that comply with the rules. But if Amazon determines the transgression is serious, it may restrict selling privileges altogether.
This policy can sometimes hurt sellers even when their account is fully in compliance. For example, if someone has a banned Amazon account and they log in using your Wi-Fi, Amazon might flag your account and shut it down.
eBay also expects its sellers to comply with guidelines but is not as severe with its penalties. Typically, when there’s a violation involving a particular product, eBay will remove the listing. The seller could continue to operate the rest of their account if it’s in compliance.
This issue doesn’t mean that people should be scared of selling on Amazon. Typically, if you follow the rules, you won’t have any problems. If you do, you can usually correspond with Amazon to rectify issues. But if someone has a low tolerance for rules, they should throw this point into the mix when deciding between selling on Amazon vs. eBay.
Part of Amazon’s appeal is that its overall sales are much higher than eBay’s. But that doesn’t automatically mean that you’ll earn more by selling on Amazon. You should check both platforms to see which one works better for your products. It’s not uncommon for an item to sell more on eBay than Amazon.
Both eBay and Amazon sellers pay for the use of these platforms. The basic fees are as follows:
- Monthly fee, but both sites offer free subscriptions with limited privileges.
- Insertion fee of US$0.35 when you list an item on eBay. Monthly subscribers get a minimum of 200 free listings.
- Per-item fee of US$0.99 when you sell a product on Amazon and don’t have a monthly plan.
- Final value fee (called a referral fee on Amazon), based on a percentage of the sale amount.
- Final value fees vary by category on both eBay and Amazon. Therefore, determining which platform has lower fees depends on the products you intend to sell.
eBay offers the option to use an auction format. Sellers determine a minimum opening bid and when the auction should end. The closer it gets to the listing’s expiration, the higher up it will appear on searches.
This option is very valuable under certain circumstances. It simplifies selling products that would otherwise get lost among other sellers’ listings while guaranteeing a minimum price.
Amazon and eBay offer many other features. Both offer:
- Automatic repricers for sellers who want to have the lowest price without monitoring their account.
- Advertisement options to help promote listings.
- Traffic tracking to see how many people viewed a listing and the keywords they used to find it.
- Accounting software for when tax time comes around.
Amazon typically offers these options on its platform. eBay also has plenty of these features, but it relies on third-party apps to provide them.
Conclusion: Amazon vs. eBay
In the end, there’s no one-size-fits-all solution for online sellers. Both platforms are great options worth considering. This is only a starting point. Before deciding, you should get a better feel for these platforms and what they offer.
You can gain lots of knowledge through Udemy’s extensive lineup of Amazon and eBay courses for sellers. Browse through them, and sign up for one — or several — to learn more and help you weigh your options.
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