Amazon or eBay

Seems that for several years now, I have been reading of disgruntled sellers leaving eBay to set up shop on Amazon. So much so, that leaving eBay, and kicking the door closed, seems to have become the in-thing. There are even ex-eBayers writing “How To” books.

Well, I do not doubt for a minute that there are a lot of sellers who, in recent years, have left eBay. eBay is evolving, and change always rankles those who are established in their ways. People just dislike change, that is our nature.

Furthermore, several of those eBay changes, perhaps all of the major ones, have been quite seller unfriendly. Consequently, many eBay sellers have rightfully left eBay, simply because their business models require that they should.

What are the eBay evolutionary changes? Well, some chide that eBay is trying to become more like Amazon. And, in a sense, that assessment is correct. eBay has moved towards becoming a marketplace for the purchase of fixed-price commodities (like Amazon), as opposed to being principally an auction marketplace. Consequently, the small auction seller no longer enjoys the same status as they did in eBay’s early days.

The purpose of this article is to attempt to identify and to understand the differences between eBay and Amazon. And, ultimately to answer this question – based upon your business model, should you be selling on eBay or Amazon?

We will get to their differences in a moment, but first here is a quick answer to the above question: if your business model permits, and you can reconcile the operating and philosophical differences between selling on eBay and Amazon, then sell on both. Your goal is not to assign loyalty to one marketplace or the other, but to develop as many successful selling channels as possible.

Why? Because your long-term financial security is best served by multi-channel selling. Which is otherwise known as, not putting all your eggs into one basket, especially when you do not own the basket. Indeed, your main selling channel should be neither Amazon nor eBay; but instead, your own eCommerce website – an exclusive marketing place that you own and control.

Okay, back to eBay and Amazon. Here are the differences, and this will take a while, because the two marketplaces are dissimilar in many ways.

To begin, think of eBay as an indoor shopping mall. On the ground floor, you will find the typical independently operated stores. But, on the mezzanine there are no stores, just tables full of merchandise. In this analogy, the mall stores are similar to the eBay stores, while the mezzanine represents the auction aspect of eBay. In your store, you own the merchandise, determine it’s advertising and display, and receive support and promotion from the mall owner.

Now, for Amazon. Think of Amazon as being more like a Walmart super center. Here, figuratively speaking, you must compete for shelf space. And, your little space is entirely surrounded by your competitors. Furthermore, even Walmart may decide to begin competing against you with their house brand. Amazon also provides store space, but it is practically invisible to shoppers.

In a nutshell, here is the operational difference between eBay and Amazon. On eBay, you are the second-party (seller), while eBay operates as a third-party (marketplace). On Amazon, the roles somewhat reverse; now Amazon is the second-party (seller and marketplace), while you are a third-party (seller). In either marketplace, the customer is always the first-party.

Thus, in any transaction on Amazon, Amazon’s presence is always in the foreground, and sometimes standing between you and the customer. As one example, many times a customer may buy your product, but think that they are buying from Amazon. And, there is the possibility that as Amazon learns more about your business, they may decide to become a competitor.

Whereas on eBay, eBay is more like a presence in the background, guarding against fraud and promoting the marketplace, but never competing against you. When a customer buys from you, the customer knows that they are dealing with a business independent of eBay.

Here are a few of the significant differences between selling on eBay and selling on Amazon:

First, this caveat. The following are simple generalizations offered to highlight some of the more important differences between selling on eBay and selling on Amazon. There are far too many product categories, fee schedules, seller perks, and other variables to produce a comprehensive point-by-point comparison of the two marketplaces. Which should serve to warn that when you hear of an eBay-to-Amazon success story, that particular success may or may not be transferable to you and your product.

Popular categories – Collectibles do better on eBay than Amazon; while books do better on Amazon than eBay. Naturally, these are the respective roots of the two marketplaces.

Seller hierarchy – The seller is the second-party on eBay; but, the seller is a third-party on Amazon. This is a distinctly different relationship between the seller and the marketplace.

Marketplace listing access – Relatively unrestricted on eBay; but, restricted to UPC coded items and by product category on Amazon.

Management style – While both have rules that must be followed, eBay would be considered relaxed, compared to the stern Amazon environment.

Store access – With one click of an easily identifiable icon, a customer can be in your eBay store; while on Amazon, there is no such icon, navigation is not directed, and four clicks are required to access a store.

Listing page – On eBay you can create your own item listing page; while on Amazon, you will share a product page with all of your competitors, and that page may not be entirely accurate for your product.

Feedback – On eBay, you can expect at least 40% feedback participation; while on Amazon, around 10% is more likely. This is a significant difference, because one bad feedback on eBay will not skew your standing, as will one bad feedback on Amazon.

Search ranking – While both marketplaces use search ranking to reward certain sellers, eBay considers seller’s performance and the item’s total cost; while Amazon ranks by price, and utilizes a Buy Box. The one seller who occupies the Buy Box enjoys a huge advantage over all other competitors.

Selling formats – eBay offers fixed-price, auction, and auction plus Buy It Now; while Amazon offers only fixed-price.

Bottom line: Diversify your selling channels. Do not rely exclusively on eBay or Amazon. Use all the channels that suit your style and your product. Do not follow the crowd. Make your selling channel decisions based upon your own experience, research and testing.

In case you are wondering about my credentials, I have been selling on eBay for several years, where I am both a Power Seller and a Top-rated seller. I was a Pro Merchant on Amazon for a while, but no longer.

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