Amazon vs eBay: Why Amazon May Be Better for Online Sellers
AMZ Seller Financing • April 9, 2018
If you’re an online seller, this is one of the most important questions to have to answer. The point is not to simply start selling, but to do it right.
Choosing the right platform is crucial.
It can make or break you.
For one reason or another, there are many people who automatically assume that eBay is the way to do. They wouldn’t even give it a second thought. For several years, this platform was synonymous with online selling, but things have changed quite a bit.
If you take a closer look…it can prove otherwise.
In the last decade or so, Amazon really changed the game. It started off a small company for online selling, but it has become a giant, threatening to dominate the online selling market in the years to come.
Here are some of the reasons why Amazon is the best option for online selling:
Amazon vs. eBay: Fee Structure and Pricing Formats
Amazon’s fee structure is easy to understand. There is one monthly payment and a commission based on a fixed price (not variable like in eBay). This makes Amazon more appealing to vendors with high volume/high rotation goods, meaning goods with not much differentiation, more like a “commodity” type.
Amazon is a fixed-price marketplace while eBay is auction-based. By its nature, an auction-based marketplace will be much more competitive on prices. For similar items, a difference of $1 might make a buyer decide to go for the cheapest option, which drops the earning potential of the seller.
More Loyal Customers
Amazon customers have proved to be more loyal, they spend more and, most importantly – on average – they pay higher prices for the same items than on eBay. When Amazon sells goods from a third party seller, it retains customer information and the right to follow up on that client with any marketing action Amazon considers appropriate. This means that all direct marketing actions are centralized and controlled by Amazon – and this is a huge advantage to make customers more loyal.
On the other hand, eBay does not control this information. If a vendor sells something on eBay, the vendor retains billing and contact information, not eBay. Therefore, follow-up marketing actions are spread between many vendors, with no coordination or consistency whatsoever. This makes the whole follow-up process much harder for the seller, and the risk of not retaining customers is much higher.
Customers Who Spend More
What Amazon does with the purchaser information is pure and state-of-the-art direct marketing, for increasing revenue and profitability per customer. By sending relevant e-mails, cross-selling items before checkout, offering wish lists, giving away shipping fees, etc. – Amazon has achieved loyal customers who, in turn, spend more than on any other platform.
This feature has done wonders for Amazon sellers, because it enabled them to focus on their products and leave the rest to the platform itself. If you are selling on Amazon, you know that you are valued as an individual seller.
If you want to learn more, please check out the other articles in the blog section of our website. You will find a lot of useful information about selling on Amazon, including tips, advice and latest news.