When you think about the top 2 ecommerce websites in USA, two names will always pop up in your mind. Amazon vs Ebay is the most widely used ecommerce platform in USA as well as in the world.
This brings up an important question. Which one is better? Are they both providing exactly the similar services or one is better than another in pricing, delivery, features etc.
As a seller and buyer of these websites, these questions are very crucial and one must have a clear understanding of them.
So, to help and get you started, EJET Sourcing has written a blog that contains the differences between Amazon vs eBay. The blog contains key details about each of the e-commerce sites and what they have to offer to the sellers.
Moreover, we have added the differences so that you can understand them better. Let’s start this blog.
Chapter 1: Amazon vs eBay- How they are different?
Amazon vs eBay: This is the biggest confusion among new beginners. That is because they don’t know which platform to choose.
In this chapter, we will talk about both of the platforms in detail so that new people can understand the working of Amazon and eBay. Let’s move on to this chapter.
1. What is Amazon and how it works?
Amazon is one of the famous platforms that act as a bridge between sellers and customers. It is also the largest retailer that is selling its own products. The site uses state of the art techniques to fulfil the orders of its customers.
The model of Amazon is pretty simple. If you have a product, you can sell it on Amazon. However, there are some additional things. Sellers who opt for the Amazon FBA program utilize the model in a different way.
These sellers ship their inventory to Amazon fulfilment centers, and then Amazon takes care of the rest. It packs the items and ships them to the customers. Moreover, it also handles customer support.
Almost every seller uses the FBA system because it enables them to focus on other tasks such as marketing, campaigns, and more.
2. What is eBay and how it works?
eBay is the platform where you can do business with both big brands and small businesses. eBay is different from Amazon.
If you want to become a seller, you can easily do that with clicks here and there. You don’t have to pay any account fees or storage fees. The fee is valid when you sell the item.
Talking about selling, sellers have to create a listing on eBay. That listing contains various types of fields. Then, your item is listed, and you are easy to sell.
Payments on eBay work in a different way. If there is a new seller, eBay will hold the payment for some time in order to save the buyer. However, if you are selling for a very long time, you will not be subject to this hold.
3. Brief History of Amazon vs eBay
Amazon started selling books back in 1995 from a garage. Jeff Bezos started the company after the name of the world largest river because the idea was that the website would have every type of product.
In the first month, Amazon sold the books in every state and 45 more countries.
In 1997, Amazon went public, and since the company was getting successful, many competitors felt that as a threat and tried to place lawsuits against Amazon.
But, Jeff remained persistent and carried with his dream of the world largest store. In 1999, Amazon allowed third-party sellers to display their products on the Amazon website.
The entry of third party sellers was a game-changer for Amazon, and since then, it has been acting as an online website where you can buy everything.
After this, Amazon went into other services as logistics delivery, cloud computing, and digital streaming.
eBay was solely designed as a platform that will be able to connect people who want to sell and the people who want to buy. Pierre Omidyar was the founder of eBay, and he created a business model that changed the world of eCommerce.
Pierre Omidyar, Jeff Skoll, and Meg Whitman created a system that connected sellers from all around the world to millions of potential customers.
Ebay got successful after three years of its launch. It generated almost 5 billion USD. Seeing eBay as a success, millions of big companies such as Disney and General Motors started investing in the platform and because they became partners of eBay.
Today, eBay is one of the famous platforms that is operating in 40 different countries. As of 2020, eBay is worth around $49.87 billion, and it is increasing due to the fact that eCommerce is gaining a lot of attention.
4. Which one of the platforms is better and why?
The question that we get a lot in Amazon vs eBay blog is whether Amazon works better or is it eBay. Well, that depends on how you see both of the platforms.
Let’s say that you are planning to launch your brand. And, you are looking for something that does not take time. Well, then, Amazon is better for you.
That is because they offer FBA services where they handle the order fulfilment once the inventory is delivered to the FBA centre. That is not available with eBay, and you have the responsibility of taking control of fulfilling the orders.
The second is Amazon has a wide customer attraction, meaning a lot of customers trust Amazon and because of that, you can make a lot of sales.
On the other hand, eBay does not have this leverage.
However, with Amazon, making the seller account is difficult. There is a lot of paperwork and processes. The same is the case with listing a product. On eBay, you can easily create an a
ccount and can list your items without any major effort.
If you ask us, we would say that Amazon is better. That is because Amazon has wide customer service, and it has huge profit potential. Although making a seller central account and listing products is hard, it is still worth it.
Chapter 2: Statistics and Data of Amazon vs eBay Sellers and Sales
Both Amazon and eBay are getting in competition. But, how to compare Amazon vs eBay and decide which one is better.
To help you in understanding that, we are adding the statics of both sites so that you can see whether Amazon is performing better or eBay is taking the lead.
1. Number of Customers of Amazon vs eBay
One thing is sure that the total size of eBay is a fraction of Amazon. What I mean is if eBay has 400 stores worldwide, Amazon has 4 million (This is just a figure).
Now, let’s talk about the real numbers. Back in 2018, Amazon generated revenue of $282 billion. It had over 200 million customer visits each month.
As for eBay, in 2016, it made 10.75 billion USD from a customer base of 109.4 million per month.
EBay revenue/year has been at the same place while Amazon has taken the market by storm and its revenue tripled over the years due to increasing customer base.
Amazon has 14 marketplaces worldwide; eBay has 23 global sites. Both receive vast numbers of visitors. Amazon gets more than 197 million visitors worldwide each month. This equates to more than 2.3 billion visitors over 12 months.
In the second quarter of 2021, eBay had approximately 159 million active buyers worldwide, a slight decrease from the 161 million recorded in the same period of the previous year.
2. Ecommerce sales
Let’s talk about the graph of which market holds the major share of eCommerce in the US market. Well, you know the answer to that. Amazon holds the largest e-commerce share in the US market.
Meaning it is the largest platform where billions of eCommerce transactions are performed every minute.
3. The Seller competition
Amazon and eBay are both secretive about the data they share with the population. However, both of the sites released some data regarding the competition of sellers.
In 2019, Amazon released data that showed it has about 200,000 sellers who are making a revenue of $50,000 and about 50,000 sellers who are making $500,000 in sales.
Talking about eBay, it said that there were 6.7 million sellers in 2016. However, most of its sellers were low volume sellers who were not making that much sales.
These statistics show that the competition on Amazon is more because there are more sellers on this platform than on eBay. So, that means your product has to be unique in order to compete in this market.
4. Expansion capability
Amazon is working in about 185 countries using its network of fulfilment centers. However, If you are a seller on Amazon and are planning to target other countries, then you have to create individual accounts for these markets.
That means you have to create brand awareness one by one of each of those accounts and have to expand using step by step.
That is not the case with eBay. A seller can target over 100 countries using the same account. That means the expansion is easy because you are doing that using a single account.
Chapter 3: Key Differences between the two?
Till now, EJET has provided you with Amazon vs eBay detailed similar insights. We have now established that both of the platforms are for sellers and buyers.
But, the question is, “What are the differences between the two”. In this chapter, we will cover that.
1. Trust of Customer
Amazon and eBay have been providing their services since the 1900s. Both are well known in the eCommerce industry. However, in terms of customer trust, Amazon takes the lead.
That is because, first of all, Amazon is focused on gaining the trust of the customer. Another reason is, Amazon business model allows the customer to return the orders in case they are damaged.
In contrast, eBay has a complicated policy when talking about returning orders. If the sellers select the “No Return” option in their listing, customers don’t get the option to return the orders.
Due to this, eBay is less trusted by the customer when compared to Amazon.
2. Method of the fulfillment of orders
When talking about the method of fulfilment in Amazon vs eBay race, with eBay, there is no one option and that is you have to pack the orders by yourself.
On the other hand, Amazon offers you two types of fulfilment methods-FBA and FBM.
Amazon’s FBA is what sets it apart from eBay. With FBA, Amazon will handle the packing and shipping while you can focus on other areas of business.
Yes, Amazon charges FBA fees for that. However, it is worth it because fulfilling the orders is a pretty hectic procedure.
3. Selling Fee
EBay generally has lower fees than Amazon. However, the fee depends on the type of product you are selling.
For instance, if you are selling something related to heavy machinery, you have to pay an insertion fee of 20 dollars, and if a customer buys the product, you have to pay a 2% of your product’s selling price to eBay.
Talking about Amazon, the fee is also based on the product you are selling. However, that fee changes if you have opted for FBA.
FBA is calculated using the weight and dimensions. Moreover, with Amazon, you also have to pay the seller central fee (Individual or Professional).
We will talk in detail about fees associated with each platform so that you can have a clear idea.
4. Amazon Prime subscription
One of the prominent differences between Amazon and eBay is the subscription of Amazon Prime. Amazon Prime offers the ability to deliver the package faster.
People who are buying a product always want a fast delivery, and a Prime subscription offers that. That is not the case with eBay.
5. Price of the product and the quality
There are two types of buyers—the ones who want a new product and the ones who are looking for second-hand products. Well, if you are looking for a second-hand product, then eBay is the best option for you.
That is because eBay does not restrict the sellers from selling products. Obviously, you cannot sell illegal items. But, you can sell second-hand items.
Amazon is a place that is preferred if a buyer wants a new product. About 66 per cent of the buyers tend to use Amazon if they want a new item.
That is where the price difference comes in. For new products, obviously, the price is higher. Second-hand products have lower face value.
However, the quality of the products depends on the seller. But, with Amazon, there is a surety because you can return the product if the quality is not provided, as shown in the pictures.
6. Profitability of each platform
Lastly, there is a huge difference between the two platforms. We all know that Amazon has a huge customer base, and that means there is a huge chance of getting more profits.
As a scale, an average seller makes around 30-50 per cent profit selling products on Amazon. With eBay, that scale is around 15-30 per cent.
Chapter 4: Selling Fees of Each Platform?
In one way or another, both Amazon and eBay can give you profits. However, new beginners face problems because they don’t know is why Amazon or eBay is charging them. In this chapter, we will cover the fees associated with both websites.
1. Fees included in Amazon
First of all, we will talk about fees that amazon takes from you.
- Seller Central Account fee
If you want to sell on Amazon, you want to create a seller central account on the website. Now, Amazon offers you two types of accounts in order to sell the products.
- Individual account
- Professional account
In an individual account, Amazon charges you $0.99 per item sold. Meaning, if you are selling a product for 20 dollars, you have to pay 0.99 dollars to Amazon.
In a professional account, you are charged on a monthly basis. The fee for the professional account is $39.99. There are no extra charges on the products you sell.
If you are using the fulfilment services of Amazon, then you have to pay an FBA fee to Amazon. Amazon charges that fee because it stores your order, packs it, and when the customer places the order, it delivers the order to that customer.
FBA fees vary from product to product and are calculated using the weight and dimensions of the product.
If the item requires additional caring, then the FBA fee for that is different. You can use an FBA fee calculator order to calculate the fee for your product.
Regardless of your account fee, you have to pay a small percentage of your sales to Amazon. That fee is called a referral fee. Referral fee depends on product type and its category. However, the maximum percentage you have to pay is around 15 per cent.
With FBA, you don’t have to pay any storage fee. The storage fee is added to the total FBA fee. But, there is a rule. If your product does not get sold in a year, Amazon takes the storage fee from your account.
-Refund administration fee
This type of fee is only charged if a customer asks for a refund for the product. This is the fee that most people don’t take into consideration.
The fee for reimbursement is $5.00, or 20% of that product selling price that Amazon takes as the processing charges.
2. Fees included in eBay
This section covers the details for fees that are linked with eBay.
If you are planning to run your own eBay shop, then you have to pay the store subscription fee. There are five different packages available to you if you are going for the eBay store. The packages are
The starter package comes at a price of 7.95 USD/month and 4.95 USD/year. At the same time, the basic subscription comes with a deal of 27.95 USD/month and 21.95 USD/year.
The premium, anchor, and enterprise are available for 74.95 USD/month or 59.95 USD/year, 349.95 USD/month or 299.95/year, 2,999USD/year, respectively.
Whenever you create a listing for a product, you have to pay a listing fee called the insertion fee.
However, if you are on an eBay shop package, you can create a listing for free, provided you are within the limit. EBay charges you whenever you go beyond that limit.
This is the fee that eBay takes whenever you sell a product. The final value fee depends on the product you are selling.
- Optional Listing Upgrades Fee
This fee is for sellers who want to create a specialized listing for their products. Optional listing can consist of things such as bold headings, adding subtitles or adding a minimum price for your product.
Chapter 5: Pros/Cons of Selling on Amazon?
Amazon has millions of advantages, and that is why a lot of sellers tend to move towards this platform. However, with advantages, there are disadvantages.
In this chapter, we will talk about the pros and cons of Amazon in order to give you a deep view of the eCommerce site.
1. Pros of Selling on Amazon
- Millions of Potential Customers
One of the first things that sellers can take leverage of is the wide customer base of Amazon. Amazon is trusted by many customers because of the services it provides. For instance, Amazon Prime customers can get one-day delivery.
The FBA sellers can take advantage of that and can target more customers.
The most daunting that a customer can face is getting a fake or damaged product. Well, with Amazon, that is not the case. Amazon’s third-party sellers only sell real products, so that is for sure that the products are real..
However, if somehow they get a damaged product, they can easily return it. These are some of the few reasons may customers trust this platform.
- Your products can be ranked
One of the best advantages that Amazon has to offer is that your products can be ranked. Meaning, if you have good reviews and the customers are satisfied with your products, Amazon will bring your listing to the first page.
That is a huge advantage because no one likes to move through 10 pages in order to get that product.
2. Cons of Selling on Amazon
- No option of growing the brand
If you are opting for Amazon FBA, the Amazon team will handle the customer support. The downside of that is you won’t be able to interact with the customer and cannot know where your product is lacking.
So, that is the reason you won’t be able to grow your brand.
- Products may not have that much visibility
Another downside with Amazon is that your products won’t be visible in the digital world. What we mean to say is that Amazon mixes your products with similar products, and the market is very saturated so there will be many similar products as yours.
Amazon has high fees when compared to other platforms. For instance, there is FBA fees, seller account fees, referral and whatnot. This lowers the profit margins of a seller.
Chapter 6: Pros/Cons of Selling on Ebay?
Like Amazon, let’s divide the pros and cons of eBay. This will give a detailed overview and will help you decide whether eBay is for you or not.
1. Pros of Selling on Ebay
Whenever a person searches about a product, the first link that comes forward is from eBay. That is because eBay has a global reach. Millions of customers can get anything from eBay at a cheap price.
And the sellers can take advantage of that. They know that customers will search for a product that is unique and unique is a feature of eBay.
- Seller Account is easy to set up
The main reason new sellers come to the eBay platform is that the account for sellers is easy to set up. With Amazon, you have to give proof of your business, provide ID documents and select different options.
Plus, you have to wait for getting the approval for that seller account. That is not the case with eBay. Just some clicks, and you are ready to sell.
- Selling on eBay can become side business
If you want to create a side business, then eBay is the option for you. The reason for that is eBay makes you money pretty easily. You don’t need to invest time in optimizing lists every day or keep track of your business metrics.
2. Cons of Selling on Ebay
- Fee structure is changed from time to time
The worst thing for any e-commerce seller is when they don’t know why they are being charged. And that is a huge issue with eBay.
There fee structure changes from time to time and that can create confusion in the business. And, you don’t have control over those fees you are paying.
- Competition with similar sellers
On eBay, anyone can sell anything, meaning there is a chance that if you are selling a glass vase, a similar seller is selling the same vase.
That increases the competition. Plus, the competition is hard if you are a new seller because customers will not trust you at the start and prevent buying from you.
There is a chance that eBay will not pay you if the customer refuses to pay for that item. There is no such thing as payment protection on eBay. And, that is the main because many sellers don’t prefer eBay as their business platform.
Chapter 7: Community/Support-Which one has better?
Nowadays, more and more people are entering the business of eCommerce, and their primary choice is either Amazon or eBay. So, there is a need to guide these people in the right direction. For that, there are communities available.
So, Amazon vs eBay -which one helps you in the right way?
With Amazon, there is a ton of community support available that is available in the form of social media groups, forums, and blogs. You can find information about Amazon FBA on Facebook pages and Reedit forums.
Moreover, you can also subscribe to courses that are directed towards starting an Amazon business. Then, there is support from Amazon itself, where you can get an answer to the trickiest questions.
Talking about eBay, it has its own community page where you can ask the professionals.
And, if you are not a fan of that, eBay seller central has a ton of information about how to get started. Plus, there are forums, pages, and courses related to the website.
But, we believe that Amazon has wider community support because people prefer this platform because of various reasons.
Chapter 8: Frequently Asked Questions about Amazon vs Ebay
1. Do customers trust Amazon or eBay?
In the war of Amazon vs eBay, the sellers trust Amazon more because it offers payment protection. Moreover, it gives customers a guarantee that they will get authentic products.
2. What kinds of fees are paid on both platforms?
In Amazon, you have to pay fees such as seller account fees, FBA fees, and referral fees. Whereas in eBay, the only fee you have to pay is the listing fee and final value fee.
3. Amazon or eBay-Which one makes you more money?
Amazon vs eBay, the one that makes you more money is Amazon, and that is because Amazon has more customers than eBay. There is a chance that you can get a huge amount of potential customers and can make money from these customers.
4. What is the main difference between Amazon and eBay?
The main difference between Amazon vs eBay is the fulfilment method. Amazon offers you the capability to use the FBA program, where they will pack and ship the order. There is no such thing on eBay. You have to do all steps by yourself.
So, what do you think won in the race of Amazon vs eBay?
Well, there are different perspectives. Some say that Amazon is better because it has a wide customer base. While some say that eBay is better because there are fewer fees.
We believe that Amazon is better because it provides way more features than eBay. Plus, the customers trust Amazon more because of payment securities.
Also, with FBA, you can leave the fulfilment processes to Amazon and focus on the important business tasks.
In the end, we would like to say is that it all depends on you and how you will run the business. For more information, you can always get in contact with EJET and discuss which platform to choose.