Small business owners and newbie sellers often consider Amazon and eBay as platforms to sell their products on due to their large customer bases and widespread popularity. These marketplaces can be particularly appealing to those who are looking to move their traditional business to an eCommerce model.

Before deciding to sell on either Amazon or eBay, there are a few key factors that you should consider. Discussed in this article are some essential things to keep in mind.

What Is the Difference Between Amazon and eBay?     

Entering the eCommerce industry as a seller can be a great way to reach a large customer base and grow your business. However, it’s important to research the market thoroughly and plan your business strategy before diving in as competition can be fierce, especially on platforms like eBay and Amazon.

For those who are new to online selling or transitioning from a traditional business model to eCommerce, it’s important to note that Amazon and eBay are both eCommerce companies, but they operate in slightly different ways. Understanding these differences will guide you in making an informed decision on which platform best suits your business needs.

Selling on Amazon vs eBay: Business Model Difference

There is a significant difference in the way that eBay and Amazon operate their businesses. eBay is a platform that brings buyers and sellers together, acting as a marketplace and auction house. It allows third parties to list and sell their products to buyers.

Amazon, on the other hand, is more directly involved in the sale of goods, as it often sells its own products in addition to hosting third-party sellers on its platforms, such as Amazon FBA and FBM sellers. Thus, suggesting that Amazon is both a marketplace and an eCommerce retail site.

Selling on Amazon vs eBay: Target Customer Difference

Amazon’s customer base is large and global, with the average customer being 37 years old and evenly split between males and females. Amazon’s convenient shipping services attract customers from across the globe, with almost 80% of Amazon users mentioning fast and free shipping as their primary reason for purchasing. 

On the other hand, eBay’s target market primarily consists of collectors of rare and specific items and shoppers interested in pre-owned products. Recent data suggests that younger generations of sellers and buyers, particularly Gen Z, are driving the trend towards recommerce.

This trend is not just a result of the pandemic but a growing preference for pre-loved items. The increasing demand for secondhand goods creates economic opportunities and contributes to a more sustainable future.

Selling on Amazon vs eBay: Fulfillment Method Difference

On eBay, sellers must handle all aspects of fulfilling orders themselves or hire a third-party order fulfillment service to do it for them. On Amazon, sellers can either fulfill orders themselves (Fulfillment by Merchant) or have Amazon fulfill orders for them (Fulfillment by Amazon). 

Amazon FBA allows sellers to delegate the storing, picking, packing, product shipping, and handling of returns and refunds to Amazon. Although FBA saves sellers precious time, there will be additional fees for the service. 

Selling on Amazon vs eBay: Payment Method Difference

eBay generally prefers payment through PayPal, but it also accepts all major credit and debit cards, as well as wire transfers. Cash payments and cash on delivery are also accepted in certain regions. 

Personal checks, cashier’s checks, and money orders can also be used as payment methods on eBay, but many sellers prefer to wait for these types of payments to clear before sending out the purchased items. 

Amazon has its own branded payment system called Amazon Pay, which is similar to PayPal. In addition to Amazon Pay, Amazon also accepts all major credit and debit cards and allows customers to use an Amazon store card with some merchants.

Selling on Amazon vs eBay: Global Standing Difference

Both eBay and Amazon are internationally recognized brands. eBay is popular globally, particularly for imported goods and vintage items. On the other hand, Amazon has a stronger presence in the US, but it is expanding to other countries through its Amazon Global marketplaces. However, there are still many regions and emerging markets that Amazon has not yet focused on.

Selling on Amazon vs eBay: Customer Feedback System Difference

Amazon has a layer of systems that makes buyers feel secure when making a purchase, including Amazon feedback, comments, and ratings. If a seller receives a lot of negative feedback, their account may be suspended. It is also easier to get feedback removed on Amazon compared to eBay. 

On eBay, feedback is given more weight, but this can be a disadvantage for buyers as negative comments are pushed down, making it easier for potential buyers to miss them. 

Selling on Amazon vs eBay: Product Restrictions Difference

eBay is more lenient when it comes to the quality of items that can be sold on the platform, allowing sellers to offer a wide range of products, including both new and used items. However, it is important to note that illegal items are not permitted on eBay. It would also benefit sellers to check restricted categories to avoid an account ban.

On the other hand, Amazon has stricter rules and may suspend accounts if they believe a seller has violated its selling policies and listing restrictions. It is always a good idea to check whether a product falls under any restricted categories on Amazon to avoid issues with your account.

eBay vs Amazon: Important Deciding Factors to Consider

When choosing between eBay and Amazon, there are many factors to consider. Apart from the differences highlighted above, online sellers should also take into account important details about each marketplace. 

Market Share

When discussing eBay vs Amazon, the respective market share of each eCommerce site will always be included in the discussion. In terms of market share, Amazon is way ahead of eBay. 

Amazon.com and its other global platforms are considered the most popular eCommerce site worldwide, and second place goes to eBay.com. In terms of revenue growth, Amazon achieved 22% year-over-year revenue growth in 2021, while eBay obtained 17%.

In terms of active users, eBay has around 138 million users, while Amazon has 310 million customers worldwide. As one might expect, Amazon is leading at 37.8% market share, while eBay only has a 3.5% market share among retail eCommerce companies. 

Fees Structure 

To make the process of selling on its platform more straightforward, eBay has implemented a simpler fee structure for sellers. Some of the fees you may incur when selling on eBay include the following:

Insertion fees: These are the fees charged to sellers if they exceed the limit for free product listings.

Final Value Fees: These are the fees that sellers must pay when their products are listed on eBay.

Payment Processing Fees: These fees are associated with the types of payment that sellers accept from customers on eBay.

Optional Listing Upgrade Fees: These are optional fees that sellers can pay to enhance the visibility of their listings and stand out from other sellers in the market.

In general, it is typically cheaper to sell on eBay than on Amazon due to the lower fees charged by eBay. For store subscription options, eBay offers a $4.95 monthly plan for newbie sellers. 

Amazon’s fee system, on the other hand, is more complex, with variable referral and closing fees that are based on the weight of the product being sold. Aside from referral and fulfillment fees, there are other Amazon selling fees that Amazon sellers should be aware of.

The standard fee for Amazon is between 8% and 15% plus a $0.99 per item charge if you are an FBM seller. However, if you are an FBA seller, you will need to pay a monthly fee of $39.99 per month, not to mention other Amazon FBA fees. 

Customer Support

Amazon vs eBay, in terms of customer support, is another deciding factor to consider by online entrepreneurs. Customer support for both buyers and sellers alike is crucial.

There are many reviews and evaluations of Amazon’s customer service available online. When considering the overall picture painted by all of these evaluations, it appears that the tech giant provides excellent customer service to its clients.

On the contrary, there are mixed reviews of eBay’s customer support. Some would claim a negative experience with eBay’s customer support, while others shared their positive experience online.          

Website Traffic

Another consideration when deciding whether to sell on eBay or Amazon is the site traffic. Amazon is the leading marketplace by the number of monthly visits, and in 2021, it recorded more than 2.7 billion visits for a single month. In contrast, eBay sees more than 109 million visitors to its website each month.

Promotional Opportunities

One of the advantages of eCommerce over traditional businesses is the availability of various marketing and advertising options. Both eBay and Amazon offer promotion strategies to help sellers boost their sales. Here are some on-site marketing strategies eBay and Amazon offer, respectively. 

Amazon Marketing Options

Here are some of the marketing strategies and tools that Amazon sellers can use to maximize their business potential. 

Amazon Deals and Amazon Coupons: Amazon allows sellers to offer deals and coupons to shoppers. These promotional offers facilitate the increase of sales and brand awareness. Some Amazon deals include but are not limited to: Percentage Discounts (e.g., 20% off), Dollar Discounts (e.g., $10 off), and Buy and Save Up To (e.g., save up to $5.00).

Amazon Product Videos: The Amazon interface allows sellers to include video marketing content on product listings. Amazon product videos quickly catch consumers’ attention and inform them about the product. 

Amazon Ads Solutions: Amazon offers multiple options for Amazon ads that can help improve brand visibility and sales conversion. Some of the popular Amazon ads include Sponsored Products, Sponsored Brands, and Sponsored Displays. 

eBay Marketing Options

Similar to Amazon, eBay also provides sellers with on-site marketing tools and strategies, including but not limited to the following: 

eBay Seller Hub: Seller Hub is a platform that allows online sellers to efficiently manage their products, sales, and business operations on eBay. It offers tools for creating and publishing listings, managing an eBay store, creating promotions, and processing orders. It is designed to be user-friendly and cost-effective for sellers using eBay as a marketplace.

eBay Ads: Similar to Amazon Ads solutions, eBay likewise has eBay Ads that provide various advertising solutions to eBay sellers. eBay’s advertising solutions include self-service, direct, and programmatic advertising solutions. 

eBay Store Subscription: eBay store subscribers can have access to a powerful suite of tools to help build, manage, promote, and track their business on eBay. The eBay promotional strategy provides sellers with a fully customizable eBay Store and gets special access to advanced design, marketing, and reporting features. 

Promoted Listings: eBay Promoted Listings is a straightforward advertising program that allows you to promote specific items on the eBay platform. This can help increase visibility and potentially drive more sales for your items.

Amazon vs eBay: Advantages and Disadvantages

Both Amazon and eBay can offer benefits and challenges to sellers. Here is an overview of some pros and cons to consider when deciding which platform to use:

Pros of selling on Amazon:

• Trusted brand with a large audience
• Robust platform with various programs, solutions, and customer support for sellers
• Comprehensive seller portal for managing product catalogs, inventory, pricing, shipping, and viewing business statistics

Cons of selling on Amazon:

• Highly competitive marketplace
• Various selling fees

Pros of selling on eBay:

• Trusted brand with a large audience
• Flexibility and autonomy for sellers
• Strong focus on product auctions

Cons of selling on eBay:

• Similar to Amazon, eBay also has a competitive marketplace
• The keyword-based structure that may be challenging for less popular products
• A system that favors buyers, which may lead to unfair customer reviews for sellers

eBay vs Amazon: Who Should Sell on Amazon? 

The Amazon business model is streamlined, allowing sellers to begin selling items quickly. The FBA option simplifies logistics and fulfillment costs. Amazon is also an excellent avenue for sellers, offering a large audience and rapid product visibility. 

In addition, it is relatively easy to sell high quantities and prices on Amazon, as long as sellers meet the necessary requirements. Overall, Amazon may be a better choice for sellers compared to eBay, particularly if meeting stringent requirements is not a major concern.

eBay vs Amazon: Who Should Sell on eBay? 

One of the key advantages of eBay for online sellers is the ability to have greater control over their sales process. Sellers have the freedom to create product listings, set shipping rates, and establish return policies as they see fit. 

Additionally, eBay’s fees are generally lower, which allows sellers to offer more competitive prices for their products. eBay may be the better choice if you value having complete control over their product listings and the ability to set their own rules and restrictions.

Which Is the Best Platform for You, Amazon or eBay?

Now that you have a better understanding of the differences between Amazon and eBay and how each platform may be beneficial for your online pursuit, you’ll be able to make an informed decision on which marketplace is best suited for your business. 

Both platforms have a long history and are well-respected in their respective industries. However, it’s important to consider your business goals, target audience, and specific product listing needs when deciding which platform to use. Diversification can be important for protecting income streams and growing your business, and using multiple channels may be a good strategy. 

Ultimately, the decision will depend on your specific business and goals. Consider each platform’s pros and cons, and assess where you can earn the most profit before committing to one platform, as it will likely be your home for years to come.

The lure of financial success and independence has propelled the online selling industry to greater heights. Headlined by both Amazon FBA and dropshipping, online sellers are sometimes caught up in a dilemma on which business model to begin with. 

Below is a comparative discussion detailing key points about the highly debated topic of Amazon FBA vs Dropshipping. 

Amazon FBA Dropshipping

For first time online sellers, the term Amazon FBA can be quite confusing, especially with terms like Amazon FBM and Amazon SFP that are also frequently discussed on forum sites and discussion boards, along with the term FBA. To begin with, FBA stands for Fulfilment by Amazon.

With the Amazon FBA program, Amazon allows you to send your products in bulk to their numerous warehouses. As an alternative, especially if your Amazon products are coming from China, you can also send those items directly from China to the Amazon FBA warehouse. As the Amazon website states, with the FBA program it would be Amazon who will PICK, PACK, & SHIP your orders. In essence, such a process is viewed as Amazon FBA dropshipping. 

In certain instances and when conditions are met, Amazon sellers may even get FREE shipping, storage, removal, and returns when they try Fulfillment by Amazon. Thus, making Amazon more appealing when it comes to Amazon FBA vs Dropshipping. 

Watch the video below to learn more about the Amazon FBA program.

What is Dropshipping?

On the other side of the coin, we have dropshipping as an alternative to selling on Amazon. This type of business model follows an almost similar concept to that of Amazon FBA. However, instead of going to Amazon warehouse from the manufacturer or supplier, items are shipped directly to buyers. 

If you are lucky enough, you may find suppliers abroad that offer a variety of items. Some suppliers would even extend their service to a point of offering tests or sample items before the actual order. For a variety of options for your dropshipping products, you may check ChinaBrands! 

Getting Started

If you want to get started with any of the two business models, here is an overview of next steps to start your own online selling business, whether via dropshipping or Amazon FBA (Download Detailed FBA Guide Here).

Amazon FBA vs Dropshipping: Advantages & Disadvantages

Similar to any other online undertaking, discussion on Amazon FBA vs Dropshipping will touch the issue of Pros and Cons. To give you a clearer understanding of what may lie ahead of your online selling journey, here are some of the advantages and disadvantages of both Amazon FBA and dropshipping. 

Advantages of Amazon FBA

• Established Customer Base

One of the main highlights when it comes to Amazon FBA is its reliable customer base. It is estimated that nearly half of the online users begin their product search on Amazon.com rather than Google search. 

With proper Amazon SEO and a better understanding of the Amazon A9 algorithm, you can definitely reach a steady stream of online shoppers from its millions of customers. Statista even highlighted the dominance of Amazon in 2019 when it comes to its U.S. mobile patrons. 

• Brand Image

When you associate any of your products with Amazon, you would inevitably benefit from the tech giant’s premium brand image. The impact of Amazon branding goes beyond product perception, for the customer service of Amazon will also be associated with your own business. In fact, some online shoppers are not aware that the products they bought were actually sold by third-party merchants like those enrolled in the Amazon FBA program. 

• Technological Advantage

When it comes to Amazon FBA vs Dropshipping, Amazon is far ahead when it comes to technology. Amazon has its own algorithm that you may take advantage of in order to rank your product in organic search. 

Optimizing your listing is much easier, especially since there are already tested and proven guidelines that Amazon itself and experienced Amazon sellers have laid down. All you have to do is understand and follow the steps provided. In terms of security concerns and/or system glitches, Amazon is also prepared to deal with this. 

• Almost Maintenance Free

Amazon FBA is a preferred business model by some online sellers because of the easy maintenance. By maintenance, it would include but not limited to product listing maintenance, product storage maintenance and other overhead costs. With Amazon, the usual expenses of an individual seller are drastically decreased. 

Disadvantages of Amazon FBA

• Costly Initial Capital

When starting an Amazon business, especially with Amazon FBA, capital will be an issue for some sellers. Individual sellers will find it difficult to raise a decent amount to start their FBA campaign. According to a survey, 17%-22% of Amazon sellers started their business with a capital of $2,501 to $10,000. 

• Single Platform Reliance

One of the concerns when it comes to Amazon FBA would be platform reliance. This means that when your account is penalized or banned, you could lose your revenue source. 

Similarly, competition in a particular niche may also be tough, especially for starters. That is why best Amazon sellers utilize only the best Amazon seller tools, like Seller Snap to outbid their competition. Seller Snap serves as their reliable and trustworthy AI Amazon repricer that is based on Game Theory tactics. 

• Inventory Dependent for Sales

Amazon sellers should see to it that they will never run out of inventory. One of the factors that Amazon considers for ranking a listing or product is the sales performance. If you lack inventory, then your sales will be affected. 

As a consequence, your ranking will also be affected. And since ranking is designated by an algorithm, you will have to regain your previous product ranking through proper optimization and FBA practices. Thus, essentially suggesting that you will have to start from scratch once again. 

Advantages of Dropshipping

• Less to no Initial Investment

What makes dropshipping attractive to some online sellers is its required initial investment. To start your dropshipping business, there would be less to no initial inventory cost. This will normally depend on the arrangement you made with your chosen supplier. 

This is the trademark of dropshipping, you will find suppliers online and sell their products to customers. When someone places an order, you will take the money and then place an order with the supplier using the customer’s money. Hence, you are not investing in the purchase of the item, unlike Amazon FBA where relatively massive inventory is needed to effectively run the business.  

• Low Starting Cost

Another advantage of dropshipping is the low initial investment cost. Although there is less to no expenses when dealing with inventory, you will still be spending money for the establishment of your online store. 

You will have to create your own website and buy some eCommerce themes to be able to display the items you want to sell online. If you are not familiar with website creation, there are free tutorial videos on how you may create your own eCommerce site from scratch, similar to the one shown below. 

How To Create An eCommerce Website With WordPress 2020 Video Link:

• Freedom To Sell

Since you own your website, you are free and responsible for the items you will be selling via dropshipping. Unlike Amazon FBA, there is no restriction with dropshipping as long as the item is present in the market.

In contrast to that, Amazon FBA prohibits certain products such as gift cards, gift certificates, vehicle tires, alcoholic beverages (including non-alcoholic beer), and other stored-value instruments.” To know more about FBA prohibited products, CLICK HERE! 

Disadvantages of Dropshipping

• Laborious Preparation

In Amazon dropshipping vs FBA, the former is very taxing in terms of startup demands. More effort is needed in dropshipping for both internal and external operations. 

As your point of departure, you will have to do thorough research into your chosen niche for your dropshipping business. Similarly, you will also have to search for the best and most reliable suppliers in the industry. 

On the external aspect of the preparation, you will also have to prepare your website and to communicate with your potential supplier, either via email or phone call. Similarly, you will also need to set up a paid ad campaign to bring traffic to your dropshipping website. 

With Amazon FBA, traffic is already taken care of, especially since  Amazon receives millions of visitors per month. And just most recently, Amazon had over billions of combined desktop and mobile visits. All you have to do when selling on Amazon is to optimize your product listing to be more attractive to shoppers. 

• Non-Existing Customer Base

As mentioned above, Amazon has an established customer base. In contrast to that, managing a dropshipping business is a risk in the sense that you don’t have an established customer base. That is why you will have to run an initial ad campaign to drive traffic. To help you with ad campaigns, you may check Facebook Ads or Google Ads. 

• Handling Returns

Unlike Amazon FBA where Amazon takes care of the returned items, in dropshipping, you will be the one to handle this. This means that you will have to handle the communication aspect of the product return if there would be some errors concerning the product.  

In some instances, if product concern is caused by your dropshipping store, some customers may refuse to return the product and declare the transaction fraud. If such would be the case, your supplier will not replace the item unless the alleged defective item is returned to them. 

• Low-Profit Margin

With dropshipping, profit margin tends to be on the low side, especially if you are still starting. Your daily or monthly expenses in business-related transactions may simply eat up profit margin, not to mention abrupt fees and costs due to unforeseen events. 

That is why on the onset of dropshipping, it is highly discouraged to make dropshipping as your main source of income. 

Amazon FBA or Dropshipping?

When it comes to Amazon FBA vs Dropshipping, decisions will likely vary depending on different factors. The advantages and disadvantages pointed out are not the only basis for consideration, for you will also have to consider your purpose of entering the online selling industry. Whether it is Amazon dropshipping vs FBA program, sellers should still put in the effort and resources for success.