One of the biggest mistakes sellers tend to make is that they like to put Amazon and eBay in the same eCommerce basket. And that’s okay but, they fail to realize that the differences between the two are huge, to say the least.
Here’s an example of what that means, let’s say you are a mechanic and someone with no experience with cars walks in and tries to tell you that repairing a custom hotrod is the same as fixing a pickup truck. Of course, you would agree and suggest that in principle the idea is the same, but you would go about fixing those vehicles in completely different ways.
This is how you can understand the differences between Amazon and eBay, but the reality here is that most people who are new sellers very often have difficulty understanding the difference. If you have a clear understanding of these differences then this will allow sellers the opportunity to earn good profits from both sites.
Here Are Some Of The Fundamental Differences That All Sellers Must Know
Wholesaler Versus Retailer
Amazon.com is a retailer, while eBay is basically a wholesaler. A retailers purpose is to sell products to a wide customer base at a reasonable price. A wholesaler, however, sells merchandise at the lowest price possible, in most cases to retailers who will resell the merchandise to consumers.
Simply put, this means you can charge a higher price and make higher profits on Amazon.com ( beware though Amazon takes a big bite out of your bottom line ). It also means that Amazon.com can be a great place to sell wholesale items purchased through resellers.
Amazon.com’s business model doesn’t give you as much control as eBay does. eBay lets you choose between a fixed price format or an auction style format. Amazon only allows sellers the option of a fixed price format.
eBay allows you to create your own product descriptions, whereas Amazon.com creates product descriptions for you. So what this means is that you will do a little less work on Amazon.com, but the downside is that you will have less control over your marketing.
If you sell on Amazon.com it will most likely be less time consuming simply because most of Amazon.com’s features are highly automated. This means you will only have to perform a few simple tasks.
However, most eBay features are not automated and will require some effort from sellers. Keeping track of items on eBay can be a bit challenging at times, even with some of the more advanced features such as selling manager pro.
Different Fee Structures
Amazon and eBay both have completely different fee structures. While Amazon.com lets you list for free and takes a cut when you make a sale, eBay charges you a monthly fee for listings.
eBay charges you based on your monthly sales, however, the one thing eBay offers that is quite attractive is that insertion fees for the first 50 – 100 listings per calendar month, depending on listing format and category are free.
So what this means is, selling on Amazon.com can be a lot more expensive compared to selling on eBay. Basically speaking, it would be a good idea to list only items that have a high volume of traffic on Amazon.com.
The way Amazon.com and eBay will be paying you is very different also. eBay pays you directly when you make a sale, provided you are using PayPal, you get all the cash right away. eBay will then bill you at the end of the month, which in turn ensures you will have a constant cash flow instead of waiting for payday.
Amazon.com takes out fees when you make a sale and puts that money in escrow for two weeks to cover refunds and returns. This can make it a little difficult to generate constant cash flow with Amazon. If you are in need of a constant cash flow then eBay is a better bet.
The potential customer base on Amazon is quite a bit bigger compared to eBay. It was recently estimated that there are over 300 million Amazon.com users, while the same study found that there are only 167 million estimated eBay users in 2017. Now that’s not to say that 167 million users is something to ignore, quite the opposite.
However, the implications of these findings are compelling. What this means is that products sold through Amazon.com are more likely to reach a mass consumer market. If you are looking for high volume sales then Amazon.com is the place to be.
Different Kinds Of Customer Base
Both Amazon and eBay serve two completely different kinds of customer base. Amazon serves a mass market type of customer base, while eBay serves a much smaller specialized market. Since eBay is an auction style site, it caters to those who have more of an interest in specific products such as, hobbyists, dealers and collectors, and resellers.
People who are buying and selling on eBay are more likely to be bargain hunters, merchants or entrepreneurs, whereas people who buy on Amazon are more likely to be your average consumers.
Understanding these differences as a seller is crucial to your success because if you try and target hobbyists on Amazon instead of eBay you are quite literally barking up the wrong tree.
A Common Thread
Despite the many differences, eBay and Amazon do have things in common. It takes a lot of time, a lot of practice, and in most cases a lot of money to be successful at selling on both sites. Even with the incredible amount of information available, it will still take the average seller several months to a year to figure out how to make some good money with eBay and Amazon.
Having said that, developing a good understanding of both sites and the differences between them will make it a lot easier to set-up and operate a successful online store. The only real way to know is to go ahead and sell a few products on eBay and Amazon.
Taking Advantage Of The Differences Between Amazon And eBay
You really can take advantage of the differences by leveraging the following techniques:
Understand which products sell better on Amazon compared to eBay. Typically, cheaper items that would appeal to a mass market such as new clothing, nutritional supplements, or new toys are popular on Amazon.com.
Unique, used, or unusual items such as antiques or old books sell better on eBay. Cheaper items that sell for lower margins but in high volume also do well on eBay because sellers fees are lower.
Do A Test Run With Amazon
Try doing a test run with Amazon.com by purchasing some wholesale items ( on eBay for example ) and list them on Amazon.com. This will give you a good idea whether or not you will like selling through Amazon. Better yet, it will help familiarize you with the process.
Sell items on eBay first to see the difference in platforms, and to see how well those items sell. Then start offering your better selling items on Amazon.com again.
Closely monitor your earnings from Amazon and eBay. Your results can help you in determining which site is best suited for you. A good rule of thumb is to concentrate on the selling platform that is making you the most money.
Get to know some experienced sellers who have worked with both Amazon and eBay, they can help you avoid some common pitfalls and show you what really works.
Becoming familiar with both Amazon and eBay is the best way to become a top seller and someone who knows how to actually make money from eCommerce. Both sites have helped many ordinary everyday people become financially self sufficient.