Understandably, online sellers want every chance for success, which often means selling on every marketplace platform they can find. However, not all marketplaces are created equal. Case in point: eBay.
Selling on Amazon and eBay could very well mean increased revenue — but at what cost? Is it wise to invest your valuable time in both marketplaces?
Let’s look at how both Amazon and eBay measure up.
The Size of Their Marketplaces
If Amazon is a great white shark, eBay is a minnow. Remember that $178 billion Amazon made in revenue last year? eBay’s was $9.6 billion — and that number has hardly budged over the last few years, whereas Amazon’s revenue has grown tremendously.
Is this the only factor that matters? Of course not. However, one must consider that the great white shark continues to climb the proverbial food chain, while the minnow seemingly flounders. You don’t want to be the minnow.
The verdict: In terms of marketplaces, Amazon takes the cake. In fact, it takes the whole bakery. If you want to test eBay, go for it, but be sure you learn how to sell on Amazon while you’re at it.
The Difference in Fees
Online marketplaces are like Tom Cruise in Jerry Maguire: “Show me the money!” When you make a sale, they want their cut.
Sellers sometimes make the mistake of determining their margin simply by subtracting the cost of goods sold from the sale price. However, there are other fees you’ll have to pay — something else you need to consider when it comes to selling on Amazon and eBay.
Here’s how Amazon’s fees work, straight from the horse’s mouth.
The first fee you have to consider is your selling plan:
- The professional selling plan costs $39.99 a month
- The Individual plan is free, but Amazon will take $0.99 for every item sold (in addition to other fees)
Additional selling fees vary based on the category to which your item belongs.
Plus, if you decide to use FBA (which you likely will), Amazon will charge you to pick, pack, and ship the product, as well as handle all the customer service.
Then there are storage fees, since Amazon hangs onto your products for you. If you’re not careful, these can really sneak up on you.
If you want to test a product as an example to see what you could expect in fees, check out Amazon’s FBA calculator. I also love the Chrome extension RevSeller because it allows you to quickly and easily determine a product’s profit margin and FBA fees right from the product listing page.
eBay is a lot more cut-and-dry. The two main fees are an insert fee to create the product listing and a final value fee when you sell your item. There are some exceptions — such as the fees for real estate listings — but generally, this is how it works.
When it comes to the cost of selling on Amazon vs. eBay, admittedly, eBay’s simplicity is attractive, and Amazon indeed ends up costing you more. However, this isn’t the end of the conversation.
Amazon might take a bigger cut, but they’re also creating a better experience for the customers — and you. Your time costs money, and when you allow Amazon to handle your packing, shipping, and customer service, you save a lot of time (and headaches).
And while you may not have to pay eBay for pick, pack, and ship fees, you’ll have to pick, pack, and ship yourself, or pay someone to do so. You’ll also have to pay for shipping separately, and in most cases you’ll find that Amazon charges you less to ship than the post office will.
The verdict: The old adage “You get what you pay for” holds true. You pay more for Amazon, and you get more in return. #TeamAmazon