Thinking of supplementing your monthly income by creating an online store? Or maybe you want to go all in and become a fully-fledged entrepreneur? Whatever your motive is, the fact that you’re interested in the selling on Amazon vs eBay debate shows you’re on the right track!
Amazon and eBay are - as the hip kids call it - where it’s at.
But before we get into the thick of things and compare these two e-commerce giants, we think Amazon is the superior online marketplace because it offers sellers greater opportunities (and makes it easier) to grow and create digital assets.
Read on to learn the similarities and differences, business models, seller fees, and the pros and cons of selling on Amazon in 2023.
Despite both Amazon and eBay placing as the world’s first and second largest online marketplaces, Amazon is considerably larger than eBay and outperforms its rival on multiple metrics. The following is a market size comparison.
According to this fascinating research done by Marketplace Pulse, in a little over a decade, Amazon has captured more market share than eBay in virtually every country. Of course, it’s already the biggest player in the US, but as time passes, Amazon’s domination over emerging markets seems inevitable.
An interesting side note: the number of people using the Amazon shopping app to make purchases in the US is around 100 million, whereas the number is only 3.67 million users for eBay.
Based on these stats, it’s clear that Amazon is the bigger marketplace in the US and abroad. And a bigger online marketplace equals bigger opportunities to market and sell products.
Note: Selling on Etsy, Shopify, and Walmart is a viable route for setting up an online store. However, these platforms either cater to a narrower audience or have higher barriers to entry, which is why we recommend sticking to Amazon or eBay.
The main difference between the two platforms lies in their respective business models. On Amazon, buyers must stick to a fixed-price system regardless of whether they’re selling new or used products. On eBay, sellers can create an auction-style listing or set a fixed price like Amazon’s.
The main reason anyone would forgo Amazon in favor of eBay is the abundance of sales deals in every category. This dynamic compels new sellers to opt for the auction style instead of fixed-price listings.
In this model, buyers bid on items for a period of 3, 5, 7, or 10 days, after which the highest bidder claims the product. This is ideal for sellers who need clarification regarding the value of their product, are attempting to sell items that are unique or antiques, or want to generate quick sales.
Amazon’s fixed-price system is better suited for sellers that have researched a particular segment or niche, know the product’s value, and wish to generate a certain amount of profit. In addition, the fixed-price model makes more sense when there is massive inventory at hand, and selling the inventory over long periods is not an issue.
Amazon makes running an online business much more manageable - the Amazon seller central dashboard gets updated with tools that offer better insights into customers purchasing behavior. Although it’s slightly more expensive to sell on Amazon than on eBay, if you’re serious about making money online, go for Amazon.
Amazon offers sellers the choice of signing up for an Individual selling plan or a Professional selling plan. The individual selling plan charges sellers $0.99 per unit sold and referral fee that varies based on the product category. The Professional plan costs $39.99/mo. plus a referral fee that also varies based on the product category.
There’s no escaping the fee that Amazon applies to each seller, irrespective of the volume or size of the products sold. Therefore, third-party sellers must set clear goals before choosing a selling plan.
The individual plan is a cheaper alternative for those expecting to sell 40 items or below monthly.
The upside to signing up for this plan is the lack of monthly subscription fees. The downside is the inability to sign up for Amazon Sponsored Ads—the option to strategically position your offerings on different pages for increased visibility and sales. Although this feature doesn’t incur extra fees, the base referral fee still applies.
We recommend choosing the Professional selling plan even if you’re new to selling. Doing so will grant you access to features like:
To gain a better understanding of the fee structure on Amazon, it’s essential first to understand how the FBA revenue calculator works. It looks something like this:
Fees vary according to the product type being sold and the fulfillment method; either FBM or FBA. To explain how the calculator works, we’ve selected a random product priced at $23.99. The right side of the picture shows the Cost column, which includes the following:
Note: these costs are exclusive of the $39.99/mo. and $0.99 per unit costs incurred for the professional and individual plans. Also, when selling products via the FBM (Fulfillment by Merchant) method, the shipping costs do not apply. Instead, sellers will have to calculate the cost per unit to determine profit per sale accurately .
One more fee, the Closing fee, applies to media and book-related items, including videos, video game consoles, computer games, and video game accessories.
The two main fees eBay charges are insertion and final value fees.
To view the complete fee structure, visit eBay’s Selling fees page.
The following additional fees may also apply:
Sellers can also be charged Additional final value fees if they fail to meet performance metrics or buy or sell outside of the platform.
Be careful, piling up listing upgrades without keeping an eye on the fees may result in a costly mishap. To avoid such a scenario, use the eBay fee calculator to accurately determine each cost before listing your product for sale.
This brings us to an important question:
Despite housing a seemingly complex fee structure, eBay’s seller fees are still less than Amazon’s - but not by much. The exact figures vary based on the seller’s product category, dimensions, and fulfillment methods.
As mentioned earlier, eBay is seller-oriented whereas, Amazon is buyer-oriented, reflecting in their refund policies. To state that Amazon has won the trust of its customers is an understatement. According to a nationwide survey carried out by Morning Consult, the average American trusts Amazon more than the police or the government.
Much of this trust can be attributed to its buyer protection policies, particularly the A-Z Guarantee. This feature protects buyers from the misconduct of third-party sellers, whether the issue pertains to an item’s condition or delivery times. Also, Buyers can quickly request returns and refunds if unsatisfied with either, and failing to resolve the issue may result in harsh penalties.
Amazon offers sellers an incentive known as Refund Administration Fee. According to their policy, whenever a seller refunds a customer who has already paid for an item, Amazon refunds the referral fee. However, it deducts a refund administration fee of 20% or $5 from the referral fee, whichever is lower. For example, let’s say a seller refunds $30 on an item with a 10% referral fee. The refund administration fee will be $0.60 (20% deducted from the $3 referral fee).
Clearly, eBay does not place its sellers in the same precarious situation and has a far more complex return and refund policy. Its seller-oriented behavior is perhaps best showcased by equipping its sellers with a ‘No Returns’ optionality, often leaving buyers dissatisfied and unable to return products.
Now, any would-be seller reading this might already be planning to forgo Amazon completely. However, such a policy may end up causing more harm than good. Creating a listing and ticking the ‘No Returns’ box may inadvertently send the wrong signals to potential customers. Can a seller unwilling to extend post-purchase services be trusted to provide quality products?
Buyers didn’t just wake up one day and decide to trust Amazon more than the local police or the government. Building and maintaining such high levels of trust directly result from years of building brand loyalty. Implementing such policies makes buyers feel comfortable and willing to trust the third-party sellers of today and perhaps you tomorrow.
From a buyer’s perspective, Amazon is safer than eBay (regarding payment protection and refund claims). Still, from a seller’s perspective, eBay is the safer marketplace to do business in. However, looking at both platforms holistically, Amazon makes it easier for third-party sellers to create lucrative eCommerce stores.
A rule of thumb: whichever platform you choose, stay up to date with the selling policies of the marketplace, and you’ll be fine.
More than 200 million people across the globe have a Prime subscription that costs just $14.99 a month. Additionally, an Amazon Prime membership opens the door to numerous perks, including free 1-2 day shipping on most products, exclusive selection, shopping deals, the option to stream TV, movies, and more. It’s also one of the primary reasons Amazon has such an enormous and dedicated customer base.
So how is this information beneficial to the sellers? Well, a huge customer base that’s willing to dish out money, especially during holidays like Prime Day and Black Friday is just what sellers need to maintain consistent sales and revenue.
Amazon started its operations back in 1995 with the intent to sell books online. Today, it boasts millions of offerings across 36 product categories. However, access to some of these is restricted to new sellers and requires a permit from recognized bodies. Some categories are open to Professional accounts but a few bar entries to any and every type of seller.
While Amazon does permit the sale of used goods, it encourages and even incentivizes the sale of new products. Sellers may also list refurbished electronics only after meeting Amazon Renewed set criteria. Let’s go over some of the more popular and open categories sellers can enter:
For a more in-depth look at each category, click here.
Categories only available to sellers with a Professional account include business products, fine art, collectible coins, foodstuff, jewelry, watches, video recordings, computers, luggage and travel equipment, scientific and industrial equipment, and sports collectibles. In most cases, sellers need approval from Amazon before operating in specific categories.
So why does Amazon restrict sellers from selling certain products? The answer is simple: Amazon doesn’t want to feature unsafe or illegal products on its virtual shelves. So listing such products on its platform and those that can only be purchased via prescription is strictly forbidden.
As a seller, you must ensure compliance and adhere to Amazon’s laws and regulations. It’s better to err on the side of caution as even minor infringements may lead to the termination of a lucrative business overnight. At the very least, you may face temporary account suspensions, which are detrimental to any business. The following is a list of all restricted and/or gated categories:
Although eBay allows sellers to list new and used goods, the auction site has always attracted those who want to sell secondhand or used goods. According to eBay “you can create up to 300 unique Store categories to help organize your listings and display your items to buyers.” Standard categories include:
Like Amazon, eBay has its own set of prohibited or restricted items you can view here.
Selling books or selling used books on Amazon vs. eBay is a commonly asked question from people looking to make money off paperbacks. The TL;DR version is that Amazon is a better place to sell new and used books on because:
Whether you choose Amazon over eBay or vice versa, creating an optimized listing is critical to succeed on both e-commerce platforms. It can be the difference between a customer purchasing an item from your store or your competitors. The following are a few key areas you should focus on:
Notice how we said images and not a single image. Amazon allows users to upload seven pictures for a single item. Ideally, these images must be high-definition so potential buyers can see your product from every angle.
Low-resolution imagery leads many to assume poorly about your item’s quality. If possible, create an infographic for your product that helps explain its key features. Not every buyer has the time or patience to go through the entire product description.
The second most important characteristic of a great listing is a well-researched and formatted title. However, it’s vital to understand what a keyword is and why it matters before we can move on to creating the perfect title.
A keyword is a word, or sentence buyers type in the search bar to find certain products. For example, you might sell chairs on Amazon soon, but what type? There are computer chairs, gaming chairs, office chairs, wooden chairs, and so on. Selecting the right keyword will cause your product to appear in front of the right audience.
If you’re a seasoned buyer on either marketplace, you’ll know how many sellers pay no attention to the product description section. So the description needs to be readable and easy to understand. List all the features, benefits, and technical details you think the customer should know about.
Another feature of a compelling product description is to list the most important features/points in bullet format. This space is also ideal for secondary keywords, provided you can incorporate them in a way that appears natural and not spammy. Smart sellers fit as many keywords as they can to increase visibility and bring in extra traffic.
Note: Here’s a super helpful blog on leveraging ChatGPT AI to create killer Amazon product listings!
Here are answers to some of the most commonly asked sell on Amazon vs. eBay questions.
As a platform, Amazon is way more profitable than eBay (check out the statistics mentioned at the start of this blog). For sellers, Amazon is still more profitable than eBay if you have a quality product on hand, know how to optimize product listings, and run effective paid campaign ads.
The best way to sell products online is to create an Amazon seller account and list your products for sale. Amazon makes it incredibly easy for new sellers to advertise products and manage the day-to-day affairs of their business.
Another reason you should sell on the platform is that besides its seller tools and powerful analytics, you can outsource product packaging, shipping, and storage to Amazon for a fee.
More people shop on Amazon than on eBay. According to webretailer, Amazon averages 5.7 billion monthly visits worldwide whereas eBay manages around 3 billion.
You should sell on Amazon if:
You should sell on eBay if:
Want to start selling on Amazon but don’t know where to begin? Then sign up for our Quick Start Challenge to gain mentorship from top Amazon sellers and set up your store in under 14 days!
Discover opportunities. Maximize your sales. Grow your Amazon business!