Once the biggest e-commerce marketplace in the world, eBay has now slipped well in the rankings behind Amazon, which rivals even Google in its function as a search engine. However, eBay takes the main share as an auctioning platform and holds the most extensive market reach on a global scale. Which one to choose? We’ll give you a quick rundown on the main features, attractions, and disadvantages of eBay and Amazon, to help you decide which selling platform is best for you and your product.
AMAZON VS EBAY – WHICH IS ACTUALLY BIGGER?
If you look at the numbers and nothing else, Amazon is bigger than eBay in almost every regard. In 2017, Amazon had a total of 197 million unique visitors as opposed to eBay’s 113 million. In 2016, Amazon reported 310 million active accounts, almost double the number reported by eBay in 2018. And in 2018, Amazon’s annual net revenue sat at US$178.8 billion, over eighteen times the US$9.6 billion reported by eBay.
But Amazon doesn’t hold all the cards. eBay holds first place for international reach, defined as sales made outside North America, with almost double the sales made via 25 global marketplaces, as opposed to Amazon’s 13 international sites.
Amazon’s Customers vs eBay’s Customers
eBay built its platform with a focus on selling second-hand goods. This means that their customers tend to see themselves as price-conscious bargain-hunters, and are more likely to be opportunistic purchasers, even though 80% of the products now offered on eBay are brand new. eBay customers also tend to show more brand loyalty, willing to give feedback and leave reviews.
While eBay customers are brand loyal, Amazon customers tend to be platform loyal. Many are part of the Amazon Prime community and are willing to fork out a monthly fee in exchange for the benefits of membership – fast, free shipping being the most important. Membership tends to tie customers into even more commitment, with almost half Prime members shopping at Amazon on a weekly or daily basis.
Of increasing concern to search engine companies like Google, many consumers start their product research by going straight to Amazon, bypassing the big three search engines entirely. While consumers may go on to buy from eBay or specialist retailer sites, it is apparent that consumers see Amazon, with its huge variety of products and easy-to-use interface, as a trustworthy and comprehensive buying platform.
eBay vs Amazon Selling At A Glance
Both platforms offer different account types, as well as customer and seller experiences, to appeal to different types of merchant sellers. Their salient points are:
- Offers Individual Accounts – suits casual sellers with less than 40 sales per month. A one-off fee is paid per listing. Individual sellers are excluded from selling products in many categories, for example automotive, business products, collectible coins, jewelry and watches, fine art, groceries, professional services, and sports collectibles.
- Offers Professional Accounts – sellers pay a monthly fee and can upload as many products as they want. Advantages include bulk uploads and access to a larger range of product categories (some requiring special permission, such as collectibles).
- Sales can be fulfilled by either FBA, where Amazon takes care of shipping and customer service or FBM, where the merchant ships the goods themselves
- Amazon Prime is a membership system that rewards customer loyalty to Amazon with fast and free shipping
- A range of promotional tools are offered. Pay-per-click advertising (PPC) is a standout feature offering the seller a range of ways to entice buyers to their page.
- Offers the Hobby Seller account – set up and start listing products immediately. Some product categories are off-limits.
- Offers the Professional Seller account – set up a customized shopfront. This gives you a unique URL, advanced marketing options and access to unlimited product categories.
- eBay has no packing and shipping service and sellers ship all sold items themselves. A high standard of service allows sellers to become Top Rated, which unlocks seller benefits. eBay also rewards sellers with a “Fast ‘N Free” badge if they meet certain requirements.
- As with Amazon, a range of promotional tools are offered. eBay’s offers both a type of PPC, called Highline Search Ads, as well as a Promoted Listings tool, which is charged per sale, with sellers deciding the percentage of the sale that will go to eBay.
Which is Cheaper?
Because the pricing structures are so different, it is very difficult to directly compare the cost of selling an item on both platforms. It depends strongly on what kind of product you sell and whether you use services such as FBA. The general consensus is that it is more expensive to sell on Amazon than on eBay. For example, the referral fee for Amazon sales is around 15% of the sales price, compared to around 10% of the sales price for eBay sales. However, Amazon offers a greater range of services and tools that can help the seller grow and manage a large portfolio of products.
Listing a Product: Amazon vs eBay
Amazon tends to lean towards customer usability in this regard. They group all resellers of the same product into a single listing, as defined by an ASIN number. While this makes product upload quick and easy, it can be a disadvantage if you are a reseller, because there is little to distinguish you from other merchants. If you a Private Label Seller, ie you sell a unique product or brand, you have a little more autonomy over the look and feel of your listing.
In contrast, eBay sellers can set up their own product listing, no matter how many similar or identical products are already on the platform for sale. However, it should be noted that adding your product to an existing category is now mandatory, If your product is new, other details such as brand, model number, etc, must be provided, removing some of the individuality that formerly existed.
The Ranking Algorithm
To sell successfully on any online platform, your product must first of all be findable. There is no point in having the very best glassware or silver bracelets if you appear on page 43 of a ranking search; most e-commerce customers look no further than the third page.
Any item’s visibility on the web is determined by SEO ranking algorithms (scarcity or uniqueness is another factor). eBay’s algorithm is called Cassini, while Amazon’s is called A9. The exact way in which they work is a closely guarded secret, and many SEO optimizations and e-commerce experts spend a great deal of time trying to outsmart them, with varying degrees of success. What is well established is that a product’s visibility in search results is highly dependent on both content and keywords. It is performance (ie sales numbers) that then determines a product’s rank.
The Best Selling Items on eBay and Amazon
Niche and non-commercial type specialty products tend to sell better on eBay than on Amazon, most likely because of the platform’s historical context of selling second-hand items. However, over 80% of items that sell on eBay are new, and the best selling items today are phones and accessories, car parts, shoes, clothing, and watches. It is worth noting that sales of many commercial items are slow on eBay because of the perception of the site as a place for bargains.
As previously mentioned, Amazon is now the highest-ranked search engine for product research. Most Amazon sellers own Professional Accounts and sell quality, repeat, commercial items. The highest selling products are books, electronics, shoes, clothing, and jewelry.
What About eBay’s Auction Feature?
Amazon and eBay both offer fixed pricing. The difference is that eBay also allows the auctioning of goods. This can take place in several ways. Customers can offer price suggestions, or an item can be slow auctioned over a predetermined period of time. There is also the “buy now” price, whereby a potential buyer can circumvent the auction process and buy an item immediately.
Auctioning will work for some products and not for others. It helps if the item in question is uniquely desirable, or has some other feature that works well with the auction process. In many cases, however, potential buyers will sit and watch an auction for many days without bidding, in order to see if the price will come down substantially, and the momentum of the sale can be lost. On the other hand, the auction of a desirable item may result in a higher price than would otherwise be paid, often with a last-minute bidder snatching the prize in the last seconds of the auction.
So you’ve got a customer, and they’re ready to pay for their goods. Which platform ranks best with customers and sellers for making payments?
eBay is often criticized by users because of its limited range of payment options. A sale can only be processed via third party PayPal, which means a customer must have their own PayPal account, or by direct bank transfer. Paypal also adds another layer of transaction fees – a substantial $0.45 per transaction plus 2.9% of the sale. However, eBay allows buyers to pay sellers directly, then claims their fee from the seller on a monthly basis.
Amazon, on the other hand, functions as an intermediary. It collects payment, removes its fees, then transfers the balance to the seller after a holding period. The advantage of this system is that refunds can be processed smoothly – although it should be noted that the advantage is to Amazon, rather than to the seller, who must wait for payment up to 14 days.
The Bottom Line is Making Sales
In many ways, eBay and Amazon have now “borrowed” the best features from each other’s sites, closing the gap between their marketing layouts. For Amazon merchants, one important difference lies in whether you are a Private Label Seller or a Reseller.
As a Professional Seller on eBay, you can customize your online storefront and tailor it to suit your product, building brand recognition, and loyalty. You can also do this if you are a Private Label Seller on Amazon, with the added option of being able to display information about your brand, called Enhanced Brand Content (EBC).
For Amazon resellers, the situation is more complicated. Because resellers are grouped with others selling the same product into a single page listing, merchants must compete for a Buy Box, the “call to action” box at the top right of the listing, which not only accounts for up to 90% of a product’s given sales, but also allows the seller to customize information about the product.
In the end, it’s all about making sales. A targeted SEO campaign, good content, competitive pricing, and solid customer service will all contribute to not only keeping you on the first three pages of a search result but will also help you convert browsers to buyers when they get there.
The Seller Interface
Amazon can be a complicated platform to navigate, particularly when selling globally across its 13 different marketplaces. They utilize a homepage, called the Seller Central interface, to streamline the process. To take back some of the market share, eBay has now introduced the Seller Hub. Both interfaces are similar to each other, with the Seller Hub focusing on sales data and the Seller Central focusing more on performance metrics.
eBay rewards good seller performance (sales and customer service) by giving merchants a badge that is visible to potential buyers – Top-Rated Seller, Power Seller, Above Standard and Below Standard.
Amazon, as a customer-focused platform, has a far more complicated reward system, by which it works to increase competition and excellence amongst its sellers. It has largely done this by introducing the Buy Box, which allows a reseller to display the coveted “Buy Now” button (all other resellers are consigned to a list). Resellers are awarded the Buy Box based on sales performance and customer service levels. Although Private Label Sellers are largely exempt from this level of competition, they must also pay attention to their performance metrics.
In the past, eBay tended to favor the seller, while Amazon has focused on winning over customers through an excellent buying experience. The gap is now closing, with eBay adopting many of the features of Amazon, for example encouraging sellers to offer the option to return items and holding payments in case of refunds. And while Amazon can be a frustrating experience for sellers, it has taken the lion’s share of the e-commerce market because of the sheer number of potential buyers who flock to the site every day.
So which is the right platform for you?
With Amazon, you can run a professional and substantial e-commerce business, reach a very large audience of potential buyers, are have a large suite of tools and shipping options at your disposal. You’ll tend to be focused on achieving the maximum number of sales possible, and you won’t mind competing with other sellers for the market share, including Amazon itself. On the downside, you’ll pay more in fees and advertising costs, and you might find the bias towards customer satisfaction frustrating at times.
With eBay, you are more likely to be in the building stages of your e-commerce business. You may also sell expensive, niche products that carry a higher margin and do not lend themselves to a mass-commerce platform, wish to keep as much control over your business as possible, and prefer to be well supported as a seller.
Of course, you can also consider the option of selling on both platforms, particularly if you’ve already been successful in one or the other. As the merchant, remember that you are in the driving seat. The question is not necessarily what these platforms are achieving for other sellers, but what they can do for you.
No matter what you decide, selling in the e-commerce world has now become an extremely competitive process. The key to getting your product seen and bought will depend on focused content and targeted SEO via the use of keywords, quality photography and accurate product descriptions. Given the expense of platforms like Amazon and eBay, you should consider the value of engaging the services of a professional eBay or Amazon seller agency to manage and grow your e-commerce business.
The Way Forward: Digital Marketing For Amazon Sellers
Not all Amazon marketing companies are the same. AMZ SEO HUB is an experienced Amazon Marketing Agency, that specializes in:
- Amazon listing optimization service
- Amazon PPC services
- Amazon SEO services
- Amazon keyword research services
- Amazon enhanced brand content services
- Amazon listing creation services
Whether you’re starting on-line or making the switch from a bricks and mortar retail store, you’ve put time and effort into developing your product range. Now optimize, manage, and grow your e-commerce business with AMZ SEO HUB