12 Points of Comparison – eBay and Amazon

by Steve on May 29, 2008 · 6 comments

12 Points of Comparison – eBay and Amazon

Think of any situation, and there are likely pros and cons. The same is true when deciding whether to expand your sales to Amazon.com. The fact is, neither eBay nor Amazon can claim to be the best across the board nowadays.

Many eBay sellers have wondered if it’s really worth selling on Amazon. Some feel there are too many rules and it wouldn’t be worth the effort. Some have asked for a point by point comparison between the two sites. I’ve chosen a dozen points of comparison that may help sellers make a decision.

  1. Fees
  2. Format (Auction vs. Fixed-price)
  3. Community
  4. Stability
  5. Feedback
  6. Branding
  7. Photos
  8. Taxes
  9. Average Sale Price
  10. Payment Methods
  11. Return Policy
  12. Shipping

1. Fees

Most sellers agree that fees between the two sites are almost a wash. Especially when you consider that you pay for every item to be listed on eBay whether it sells or not. When you consider unsold items, time spent relisting items, and time spent dealing with unpaid items, my opinion is Amazon comes out ahead.

Amazon collects the payment for the seller, and deposits the funds into your checking account. There are no fees for this, while PayPal fees are substantial. If eBay moves to a PayPal only model in the U.S., they can increase fees for collecting payment at will.

Advantage: Tie
 
 
2. Format (Auction vs. Fixed-price)

eBay popularized the auction format listing. Amazon failed at auctions and only offers fixed-price listings. Which is best?

For collectibles, auctions are the best way to get market value. eBay is better if you are running an antique store online and want the best prices, and shoppers looking for unique items.

But most businesses, do not deal in collectibles, they sell “practicals”, commodity items that people want to buy and get on with their day. Buyers can readily find these items, and buy online for convenience. It’s easy to set a fixed-price for these items.

While Amazon is the fixed-price king, eBay is moving in that direction by downplaying auctions and encouraging fixed-price listings. The advantage is in the buyers. The Amazon buyer is more affluent, and pays a higher average price for products.

Advantage: Auctions: eBay
Advantage: Fixed-price: Amazon

 
 
3. Community

eBay sellers are very involved with eBay buyers. The transactions can be extremely interactive. Amazon buyers and sellers rarely interact. The Amazon buyer tends to expect high customer service and they don’t expect to have to ask if an item has shipped.

Because of the higher interaction with customers, eBay sellers have to spend more time per transaction. Amazon transactions take less time.

Advantage: Amazon
 
 
4. Stability

Online retailers rely on the stability of their chosen platforms to operate smoothly. Changes cost time. Sellers have developed systems that allow them to list, sell, and deliver items. When rules change, or things don’t work, the systems break down and profit is lost.

Amazon has had very few major changes in the past year. Even though there are some restrictions, they generally stay the same, and are enforced consistently. When changes have been made, they tend to stick and sellers can adjust.

eBay has had major changes over the past year, including Feedback, fees, digitally delivered items, search results, Detailed Seller Ratings, eBay’s affiliate program, and more are to be expected. Sellers have been greatly affected in real and perceived ways. Some changes have been rolled out, only to be reversed causing even more consternation among sellers.

Advantage: Amazon
 
 
5. Feedback

Both eBay and Amazon have a feedback system allowing buyers and sellers to record their impression of a transaction. Both sites allow buyers to leave negative comments for sellers. Both sites allow sellers to leave only positive comments for buyers.

The eBay culture has given much more weight to feedback than their Amazon counterpart. Amazon buyers can see the seller’s feedback score, but tend to overlook it more readily than eBay buyers. Amazon’s A-z Guarantee may have a bearing on this by making the buyer feel more protected when purchasing an item.

Amazon does not “disadvantage” sellers, as eBay does, by moving them down in the results when shoppers perform a search. eBay does this by considering the seller’s feedback score and making them less visible to shoppers, rather than letting buyers make the choice themselves.

Advantage (especially for sellers): Amazon
 
 
6. Branding

Amazon restricts sellers from reaching out to buyers and marketing to them. Traditionally, this has been an advantage to eBay since eBay allowed sellers to link to a site off eBay from the seller’s About Me page.

Recent changes at eBay have virtually eliminated the ability to use eBay as a lead generating tool for off-eBay business. eBay has all but forbidden any outside links from any eBay pages including custom store pages, and About Me pages. This has effectively neutralized eBay as a “branding” tool.

Advantage: Tie
 
 
7. Photos

eBay sellers have always struggled with photos. How to take good photos, how to get the photos to show up on eBay, how many photos. Each item, no matter if it’s exactly the same as another, gets its own photo on eBay.

Amazon is different. An individual product gets one photo, and one description page, and all sellers use the same page.

Generally, the first photo posted on a given product, is the photo everyone will use. Some sellers don’t like the idea of other sellers using their photo. But if “one photo fits all” for a particular product, it’s pretty likely that product is a commodity product. Not many photos are needed.

As an Amazon seller, I absolutely love the fact that I can list 20 items without shooting a single photo. It saves a ton of time.

Amazon buyers will buy an item without a photo. They know that the image they see is generally just representative anyway.

Advantage: Amazon
 
 
8. Taxes

Marketplace sellers are responsible for the sales tax on any items sold on Amazon.com, and if necessary, they generally add this cost into the price of their items. This is a pain for Amazon sellers who are running a business.

eBay provides a mechanism in the Sell-Your-Item form to collect the taxes in addition to the sale price. This way the taxes don’t eat into the seller’s profits.

It seems Amazon could add a tool like this to their process quite easily for their Marketplace sellers and I wouldn’t be surprised to see it in the future. But until that happens, I’d say…

Advantage: eBay
 
 
9. Average Sale Price

Amazon buyers have been shown to be more affluent, and more willing to spend more on similar items. eBay buyers tend to look for bargains, and are willing to wait through a seven-day auction to save a buck.

As a seller, I’ll pick the buyer that is willing to spend more. I have actually used eBay to source products at rock-bottom prices, then sold for good profit on Amazon. Amazon buyers often don’t even look on eBay, and they ultimately pay more.

Advantage: Amazon
 
 
10. Payment Methods

Amazon sellers must use Amazon Payments to accept payment. That’s it. Amazon collects the payment, and deposits it into your bank account twice per month (more often if you choose). They collect and deposit the funds with no fees added. eBay sellers can accept PayPal, money orders, cashier’s checks, or cash (in person).

eBay seems poised to require PayPal payments on all transactions. If that happens, it will significantly affect many sellers. If you sell an item for $500, you may now accept non-PayPal payments and keep most of your money. If PayPal is required, you will fork over 2.9% + $.35 ($14.85) in PayPal fees.

Amazon sellers do not have to send invoices, payment reminders, or track unpaid items. If Amazon cannot collect the payment, you don’t have a sale, and your item is still listed on their site. eBay’s system is simply more work, more time, and ultimately costs more to manage as a seller.

Advantage: Amazon
 
 
11. Return Policy

Some eBay sellers fear Amazon because of their obligatory return policy, called the A-z Guarantee. This guarantee allows the buyer to receive a full refund if the item is “materially different” from that described, for up to 90 days. Amazon will usually side with the buyer. Sounds pretty tough.

The eBay seller is free to fight it out with buyers with a dispute resolution. This could ultimately result in negative feedback for the seller. They are not required to offer a refund. If eBay forces sellers to use PayPal for payments though, your funds could be held or you may even receive a charge-back against your account. It’s basically the same difference, but the eBay / PayPal route is a lot messier and time consuming. If you have a buyer that is determined to get a refund, they’ll generally figure a way to get it.

Simply based on the time consuming mess the dispute resolution process is, I’m saying…

Advantage: Amazon
 
 
12. Shipping

eBay sellers have long looked at shipping charges as a small revenue stream. They bump up shipping prices and skim a little for themselves to cover shipping supplies, labels, and pixie dust. (Okay, I added the pixie dust. But there must be some magical ingredient included to justify the extra charges.) The fact is, many sellers have turned this legitimate charge into a way to avoid eBay fees.

eBay has now begun penalizing sellers who charge above average shipping amounts by lowering their visibility in the default search results. They are even giving breaks to sellers who offer free shipping, in effect hurting those sellers who cannot afford it.

Amazon gives sellers a “shipping credit”, based on an item’s category. This does not always cover the full shipping amount, but usually does. The amount is fixed by Amazon. You cannot ask for more from the customer, and even if the shipping credit does not cover your shipping costs, you must ship the item. Since the shipping credit is fixed, it can be figured in when setting your price.

Which is better? I like to have control over my shipping. But if a seller is careful, it’s pretty easy to figure in the shipping credit on Amazon and not lose money. Even if there is a loss, it’s minimal.

I have found items I wanted on eBay, only to leave because of the outrageous shipping charges. ($1.99 item + $10.99 shipping for a cell phone cover.) I go straight to Amazon, because I know shipping is standard and I won’t feel ripped off. How many other buyers do the same? I’ll take those buyers…

Advantage: Amazon
 
 
Summary

There is no question eBay is best for some items, while Amazon is best for others. But the overlap is incredibly large. The vast majority of items that sell on Amazon will also sell on eBay, and visa versa.

The important thing to remember is the shoppers are different. While you and I may shop on several sites, many Amazon shoppers are very loyal to Amazon and won’t even visit eBay. Some eBayers feel it would be a sin to shop on Amazon. By selling on both sites, you are potentially getting millions of additional eyeballs on your products.

If you are avoiding Amazon because you think there are too many rules – take a look at eBay’s User Agreement. eBay is moving closer to Amazon’s model, in many ways. Like it or not, this is the wave of the future. Will you be ahead of the game, or will you be playing catchup?

Take a look at my eBook, "Selling on 'the River' - The eBay Seller's Guide to Amazon.com"

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