If you’re thinking of becoming an online retailer, the first challenge you face is choosing the place where you’ll offer your products. Amazon and eBay are two of the most frequently used platforms, and you need to research each one to make an informed choice.
What You Need to Know About Selling on Amazon
Amazon is the largest online retail marketplace, but is it the best platform for your business? This information will help you make that decision.
The Size of the Amazon Marketplace
Amazon reported $43.7 billion in sales in the fourth quarter of 2016. They also lead in the number of users, which currently stands at 300 million, with 30 million of those using the site on a monthly basis. In addition, recent numbers indicate that roughly 16.2 percent of U.S. households have registered for Amazon Prime.
Amazon Fees and Commissions
Amazon has two tiers of sellers, Individual and Professional. Fees vary depending on the type of seller you are. As an Individual seller, you’ll pay a fee of $0.99 per item sold, plus a percent of the sales price. As a Professional seller, you’ll pay a $39.99 monthly subscription fee, plus a percent of the sales price.
The percent that is charged on a per item basis is the same for both types of sellers. The percent varies depending on the type of product you sell. The range is from 6 percent to 45 percent per item, with most fees around the 15 percent mark.
Amazon is attracting more and more major brands, so the competition can be an issue if you’re planning to sell name brand or competitive items. Amazon rewards sellers who have competitive pricing and excellent customer service. Further, they offer support in the form of a University and Coach to help you succeed.
On this platform, people are likely to be more loyal to Amazon as opposed to you as a seller. However, if you can compete on price and service, you have access to a huge market.
What You Need to Know About Selling on eBay
If you’re looking for an online marketplace when considering between Amazon and eBay where your brand may stand out more, eBay is a compelling alternative.
The Size of the eBay Marketplace
eBay reported sales of $22.3 billion for the fourth quarter of 2016, which is approximately half of Amazon’s reported sales. The number of users on eBay is also about half of Amazon’s, at 167 million.
eBay Fees and Commissions
eBay has a variety of standard selling fees. A small insertion fee may be applied when you list an item for sale. The Final Value Fee is calculated based on the total amount of the sale, whether it was listed as an auction or at a fixed price. A 10 percent fee is charged for most items, but there are some exceptions for certain products. You can also take advantage of listing upgrades and supplemental services by paying the associated fees.
eBay is often considered a place where new online retailers can flourish between eBay and Amazon. There’s more opportunity to establish a brand, since the eBay platform supports sellers having their own storefront. On the other hand, eBay shoppers may expect to pay less through the auction structure, but there are still many sellers using a fixed price approach for quality goods.
Like Amazon, eBay rewards sellers with competitive pricing and outstanding customer service. They provide a Seller Center to support their sellers, a dashboard called Seller Hub, and seller webinars, Meetups and eBay Radio that provides tips on selling and growing your business.
As you can see, there are differences between Amazon and eBay that might make one better for you than the other. Keep in mind that many sellers use both platforms to take advantage of the unique things each one has to offer.