eBay Australia vs Amazon – Which one is best for you?

3. Speed

Setting up a listing using both platforms is fast – for Amazon it can take just up to a few hours, while for eBay it might only take you up to an hour. That said, due to the style of eBay’s marketplace, you will need to monitor your products and re-list items. There is software designed to help with this, but it takes time and effort.

Amazon also allows sellers selling products already listed on the site to list their product simply by entering in the item’s UPC (universal product code) or SKU (stock keeping unit) number. This process cuts down the time a seller needs to prepare a listing because the relevant information has already been inputted by Amazon employees. However, with Amazon being strict in allowing who can sell and what product can be sold under its Amazon brand, the approval process may hold you back when you want to sell a certain product.

Verdict:

It is quick and easy to set-up products on Amazon and eBay, but there are some potential road-blocks you may need to navigate when you are listing your product.

4. Product Restrictions

Amazon has strict guidelines that you must follow, which include approvals for selling certain products. The list of categories requiring approval appears to be growing and it can be difficult to get approval.

Amazon also works closely with manufacturers and brands. If a brand decides they don’t want third-party sellers listing their items on Amazon, they can deem them restricted at any time. On the flipside, there are no barriers-to-entry on eBay and anyone can sell any item that isn’t on eBay’s restricted list.

Verdict:

It’s important to remember that although marketplaces exist to be mutually beneficial for the buyers and sellers, they also want to help themselves. Like Woolworths or Coles, there is nothing to stop e-commerce marketplace owners from identifying popular products from third-party sellers and stocking and selling it themselves.

5. Payments

Online marketplace fees are tricky to determine. For eBay and Amazon pricing structures are multi-tiered with ‘insertion’ (eBay) or ‘referral’ (Amazon) fees – basically the price to list your product. Plus variable closing fees (post-sale), dependent on item categories, item weights and buyer payment options. Generally speaking, fees are usually deducted as a percentage of each sale.

For eBay Australia, the total cost of selling an item is the Insertion Fee, Final Value Fee plus any optional Listing Upgrade Fees. Every seller gets at least 40 free listings and a flat final value fee of 9.9% of the sale price. The closing fee is based on the total amount paid by the buyer (item price + postage and handling charges). Fee amounts also depend on the selling format (auction-style, Fixed Price or Classifieds) and category (e.g. Media, Collectables, Motors), as well as your ‘Store Package’ (monthly subscriptions), if you have one.

Amazon also has a complex fee structure. The company offers two options for sellers – to be listed as an ‘Individual’ (listing under 40 items per month) or ‘Professional’ (listing over 40 items per month). For Individuals, Amazon charges $0.99 per item to list along with a ‘referral’ fee that ranges from 6-45% depending on the item’s category. On top of that, there is a variable closing fee, which, for BMDV (books, media, DVD and video) items, is not variable at all, but fixed at $1.00 per item. Jewellery and watches are fixed at $2.00 per item. Other products are charged a variable closing fee that is calculated by the item’s weight. If you go the fulfillment by Amazon (FBA) route, Amazon charges an additional weight-dependant fee for picking and packing of orders, shipping and handling, customer service and product returns.

For Amazon, payment is completed by periodic bank transfers to the seller’s account and sellers are protected by Amazon’s Fraud Protection service. Usually payments are deposited every 14 days, which is a longer timeframe than eBay, where you can get paid every day, or even multiple times a day. You can work around Amazon’s bi-weekly payments by request, but it needs to be approved. Amazon doesn’t accept Paypal from buyers yet, but are reportedly in discussions to allow it.

If your account isn’t US-based then you can be subject to additional exchange rate fluctuation fees charged by Amazon (through its currency converter), and potentially your bank so it is important to be aware of these additional costs. eBay sellers usually use Paypal, but they also take additional fees before allowing a user to transfer money to an external bank account.

Verdict:

It is quick and easy to set-up products on Amazon and eBay, but there are some potential road-blocks and costs you may need to navigate and account for when you are listing your product.

6. Customisation

It is certainly easier to personalise your listing using eBay with catchy full-colour ads and photos, compared to Amazon’s neutral listings. According to seller discussion forums, brand names tend to stands out more on eBay than it does on Amazon.

However, both eBay and Amazon restrict sellers from reaching out to buyers and marketing to them. Both forbid any outside links from eBay pages including custom store pages and About Me pages. Saying that, Amazon and eBay allow private labelling – so you can still create a product and put your own private label on it…and now Amazon offers Enhanced Brand Content (it’s like A+ content for vendors, but is free for third-party sellers), which helps you present product information on your listing page to give sellers better branding opportunities.

Verdict:

There is a lack of connection with customers when you use Amazon or eBay, which means it’s tough to set up email lists, promotions, social media or other marketing content. This is another reason why personalising your labels and setting up your own website through a multi-channel strategy might be a good idea if you want to foster your relationship with buyers.

7. Seller Protection

Both eBay and Amazon offer seller protection services with the ability to directly contact a buyer if an issue arises.

Saying that, because many listings on eBay are auctions, it is still easy for fraud to occur. Some ‘false buyers’ harass sellers by bidding on items and refusing to pay if they win. Fortunately, you can invoke a “Second Chance Offer” or pass the item along to the next highest bidder if the first one falls through.

For Amazon, all items are one-click purchases, so they don’t run into this problem. However, most Amazon sellers have the view that when it comes to dispute resolutions, Amazon tends to favour the buyer – particularly with it’s A-Z guarantee and ratings, even if the buyer is dodgy.

Verdict:

It is prudent to include an refunds/returns cost when you are evaluating your fees – these are the usual “costs of doing business”. But it is also always good to research the returns and refunds policy for both marketplaces and seller forums to see what the dispute resolution process is and how to best deal with fraudulent buyers.

8. Analytics

Analytical selling tools provided by eBay and Amazon tends to comes up a bit short. eBay has options for shop analytics and seller success tips, but only for those willing to pay. On the other hand, social media integration, shop analytics and tips for seller success are missing altogether if you’re selling on Amazon. There are external companies that offer tools you can pay to get better customer information more easily, which may be a better option for you if you want to grow your business.

Verdict:

At least eBay has the option to purchase analytical tools to grow your business, but if you’re using Amazon, using external analytical services is the way to go.

9. Infrastructure

Amazon’s infrastructure has a few advantages over eBay. The site makes a buyer feel they are buying directly from Amazon. Purchases can be made using “1-click buying” and, unlike eBay and Paypal, buyers can complete their payment without leaving the site. In addition, Fulfilment by Amazon (FBA) enables the seller to have their items stored and shipped directly from Amazon’s warehouses plus 24/7 customer service, offering a fuller suite of services.

Although FBA is a popular option, it’s not necessarily viable for a seller who’s just starting out by bulk buying products up front. In this regard, eBay might be the more suitable option. Saying that, eBay can sometimes charge outrageous amounts for shipping. On Amazon, the shipping rate is standard for buyers so they don’t feel ripped off, which could be more advantageous for a seller on Amazon. eBay buyers don’t necessarily expect anything beyond what’s directly stated on a listing in terms of shipping times – so as long as you are consistent, you can usually maintain better ratings, trust, and greater sales.

Verdict:

Amazon offers greater service for shipping through FBA, but it may be more expensive. With standardised shipping rates, the economics for buyers may also be more advantageous on Amazon rather than eBay. That said, eBay may be a better platform for sellers who are just starting by bulk-buying items up front or for those who like the flexibility of being in control of their own variable shipping rates to buyers.

10. Competition

Competition on both eBay and Amazon can be brutal depending on the product. Increasingly, large brands and retailers are flocking to eBay and Amazon who purchase items in bulk, so you are likely to be competing with several of them. In addition, Amazon has some competitive private label brands of their own, which will make it even harder for smaller sellers to compete. Some sellers also use automated repricing software so their prices are adjusted to be the lowest price, which can create a downward vacuum in price – great for buyers, but not so great for your margins.

Verdict:

Both platforms are getting more and more competitive for professional sellers, but at least it’s legitimate competition amongst sellers. Finding a niche may be more difficult, but there is still plenty of room for solid private label brands to edge their way into both eBay and Amazon and be profitable.

Final thoughts

When selling through eBay or via Amazon, it’s so important to do your research – ultimately this will help you decide on your online distribution strategy. If you’re not sure which marketplace is best for you, you can test your products and analyse buyer behaviour – stick with one marketplace, figure out how to succeed and then consider others. Or you can use a multichannel strategy and sell products across multiple platforms to maximise profits, but this can be challenging in itself especially in terms of managing inventory.

Whatever strategy you decide on, both Amazon and eBay offer excellent online marketplaces to sell your products and access to customers you otherwise wouldn’t be able to gain exposure to. Good luck!