E-commerce Explained: Amazon VS eBay

#1. Fees

Let’s start with the question everyone wants to know the answer too, how much is it going to cost to sell on Amazon VS eBay?

Let’s start with eBay.

eBay charge two main types of fees; a listing fee (also known as an insertion fee) and a final value fee when your item sells.

Listing fees are non-refundable and apply even if your product does not sell. You can get up to 50 zero insertion fee listings each month (this number can increase if you have an eBay shop, which we’ll talk about shortly!)

Final value fees are charged only when your item sells, How much you pay varies by category and is calculated as a percentage of the cost of the final transaction, including postage.

Check out the table below for a breakdown of eBay’s fees:

There are optional extras such as listing upgrades, promotions and running an eBay ‘shop’. These extras are handy to have but can quickly add up so be sure to use the eBay fee calculator before adding these to your listing to ensure you’re ROI is enough.

For a monthly subscription, you can also run your own eBay Shop.

You don’t need to have a Shop subscription to sell as a business on eBay, however, an eBay Shop can help you:

• Reach the right customers
• Manage orders
• Build your brand

The prices for your own eBay shop start at £25 per month and go up to £399 per month, depending on the package you choose.

Meanwhile, over on Amazon…

You can opt for the ‘Basic’ or ‘Pro’ seller account.

The basic package has no monthly fee but does limit you to fewer than 35 items per month.

The Pro package starts at £25 (excl. VAT) and allows you to sell more than 35 items per month. Which plan you go for of course depends on how much you are likely to sell.

Check out the table below for a more in-depth look into Amazon selling fees:

Amazon has theor own fee calculator that you can find here

Once you’ve picked a seller account, you’ve got to decide whether to use Amazon FBA (Fulfilled by Amazon) or Amazon FBM (Fulfilled by Merchant – also known as Seller Fulfilled Prime).

Amazon FBA is where you send your goods into an Amazon warehouse and they pick, pack, and ship your orders for you. Of course, this is not the most cost effective way to sell your goods, but it is a super convenient way to sell if you don’t have a warehouse or are too busy to manage your orders.

Amazon FBM is where you fulfill your own products.

It’s a tough choice! What you choose will depend on whether you have space for all of your inventory or extra cash to burn on Amazon fulfilling your products for you.

The fees for FBA are higher than FBM, you need to cover storage fees (based on the daily average volume in cubic feet your items take up per month, time of year etc. which range from 39p up to 91p). Fulfillment fees (which is a flat fee that you pay per unit based on product type, dimensions and weight) which start at 60p for FBA small and light and go up to £12 for large items and removal fees, if you ever want to remove inventory from an Amazon warehouse.

Check out Amazons EU FBA fees for ‘small and light’ here:

Check out Amazons EU FBA monthly storage fees here:

With Amazon FBM you simply pay Amazon the marketplace fees which include the ‘Amazon Referral Fee’ and the ‘Variable Closing Fee’ (which you also pay with FBA).

With both FBA and FBM you can incur additional fees for product advertisement, vouchers and promotions.

Your decision will likely depend on how much money, space and time you have.

 

#2. Traffic

Each month more than 197 million people around the world visit Amazon.com; That’s more than the entire population of Russia!

There are 310 million active Amazon customer accounts worldwide and over 150 million Amazon Prime subscriptions.

eBay on the other hand, has half of that; coming in at 167 million active users.

Still impressive, but Amazon takes the lead with this one.

#3. Trust

Amazon and eBay are both well-established, and have been around since the mid-1990’s.

BUT…

89% of buyers agree that they are more likely to buy products from Amazon than other E-commerce sites.

Amazons hassle free 30 day return policy puts buyers at ease and encourages them to spend more and worry less.

eBay’s return policy is slightly more complex, sellers have the option to check a ‘returns not accepted’ box which can put buyers off, even if the price is slightly cheaper than on sites like Amazon.

#4. Selling Format

With Amazon, you either buy the item listed at a full, fixed price, or you move on and find another product or a cheaper alternative.

With eBay, you have the option to list your product at a fixed price, accept offers or auction your items.

Let’s say you’re selling a kettle for a fixed price of £25.99 you can set up a ‘best offer’ feature where you can accept offers from interested buyers – you can even set your listing up to auto-accept offers over a certain amount and auto-decline offers under a certain amount, meaning you don’t have to go through offers manually.

Auctioning allows interested buyers to bid on your item, head to head, in real-time against other interested bidders! Whoever bids the most before times up, wins the item. You can set up ‘reserves’ for your items so they do not sell at an unreasonably low price.

#5. Delivery Speed

Not much can top Amazon Primes free next day delivery.

You can benefit from the Amazon Prime badge through both FBA and FBM, but remember, FBM means you are doing all the heavy lifting and Amazon has a strict Prime delivery policy (99% on-time shipment rate) that can be lost quickly if your shipment rates are not on time.

eBay offers ‘Fast & Free’ delivery, which is usually a maximum 2 day turnaround. This is not as beneficial to the buyer and if the product you are selling on eBay is also listed on Amazon, you might loose that customer to the Amazon Prime deal.