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Selling on Amazon or Ebay - Pros and Cons

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Selling through online marketplaces such as Amazon and eBay are beneficial to both the seller and the platform itself. Ecommerce stores are able to sell to a much wider audience while the marketplace gains a larger variety of products for customers to browse and purchase. It’s a two way street.

This post will help you to decide for yourself whether or not you should be selling through Amazon or eBay, discussing both the advantages and disadvantages of doing so. A lot of factors come into play when selling through Amazon and/or eBay such as how much competition there is for the product being sold, what the product is itself, any selling fees, etc.

Advantages of selling on Amazon or eBay

Coverage

Let’s start with the biggest advantage of selling on Amazon or eBay: they have a HUGE online presence. They dominate the selling market; if you want something, chances are they will have what you’re looking for.

Amazon attracts over 180 million visitors a month and is home to over 500 million products to purchase. Meanwhile eBay has more than 170 million buyers! It’s fair to say that these two juggernauts of the online marketplace generate a lot of traffic and so there is a lot of potential to access a massive audience.

Such large number of visitors means that they operate to a worldwide market. Where your website may not be available internationally, Amazon and eBay are global sellers, meaning you may be able to increase sales in a completely new market. This can give a business growth on a whole new level.

New Customers

Another pro of selling on Amazon or eBay is that due to the sheer size of Amazon and eBay, there is a lot of potential to access a whole new market. These people may not be searching for your company through regular internet searches or even through the marketplaces. However, they may end up discovering your company through a product listed on a popular medium.

The key with new customers is to provide great customer service and meet their needs as a seller eg fulfilling the order in a timely and professional manner. By doing so, you will have gained an invaluable resource; repeated business.

Amazon and eBay have immediate access to millions of potential new customers. The traffic already exists meaning less costs need to be incurred on advertising and promotions. This translates into much higher conversion rates and therefore more sales.

New customers will also often leave reviews and Amazon and eBay are great ways to get customer feedback. They can recommend you to their friends or family meaning even more potential business.

Trust

As well known sellers, Amazon and eBay give unconscious comfort to customers as they are very well known companies. Being able to sell through a marketplace that has trust gives consumers confidence in that they know they are buying from a reputable site.

Selling your product on Amazon or eBay means that a customer can rely on your product to be up to expected standards and are of quality.

Great affiliates

Amazon in particular has a large number of affiliates who will refer traffic to your store when you are selling on their marketplace. The main benefit of this is that these affiliates are already in place upon selling so there is no need to set up anything by yourself.and find these affiliates, set up a way to pay them, or track sales; they’re already in place.

Disadvantages of selling on Amazon or eBay

When there are pros, there are cons, they go hand in hand.

Amazon seller fees

Selling on a marketplace can potentially increase your sales exponentially, but this extra business comes with an extra cost; marketplace fees.

Most marketplace fees are deducted as a percentage of each sale, and can vary from site to site and even category to category.

However, I would argue that the value of what you actually pay for greatly exceeds any worries over extra expenditure. Creating the type of infrastructure that Amazon and eBay have will take so much time and money to replicate that the fees almost become a small incidental cost of sale rather than an extra fee.

Limited control of branding

While selling on a marketplace infrastructure has many advantages, it’s important to remember that they exist to sell products and not to help your business grow. It’s soles focus is on sales and not you as a seller.

This may mean that your presence on the platform could be restricted such as the ways you interact and communicate with customers and what you items you can actually sell. They have no specific loyalty to your business and if they realise that a product is doing well, they could stock it up themselves and sell as part of their business as opposed to yours.

With all this being said however, the advantages outweigh the disadvantages. Even though you are paying fees and there are strict branding controls in place, being part of such a huge market and attracting new customers means that these are small prices to pay.

Things to bear in mind

When choosing what and how to sell on Amazon or eBay, it’s important to remember that although they may offer similar platforms, there systems will be different to each other and the way they operate won’t be the same.

Here are some things to think about when deciding on selling on Amazon vs eBay:

Selling on Amazon

Amazon creates an online shopping experience. It is a retailer and provides tools to help third-party sellers become part of the marketplace.

An Amazon seller account enables you to take advantage of:

  • Amazon Prime membership, which gives shoppers fast next day delivery. Since it now also gives customers access to their TV and movie service, more customers are signing up and so expect to receive their orders quickly and reliably.
  • Selling via Amazon Seller Central; it is easy to become a seller and has a number of benefits such as being able to access analytics of the account.
  • Fulfillment by Amazon (FBA), which involves sending your inventory in bulk directly to Amazon. They then handle all shipping and fulfillment requirements so you don’t have to.
  • Amazon allows you to directly combat with competitors by offering a product comparison service.
  • However, bear in mind how much it costs to sell on Amazon; there is a usually a monthly fee for listing your products on Amazon; referral and other fees are charged upon making a sale and vary depending on your product category (a 15% commission for most categories).

Selling on eBay

eBay is not an online shop and is an auction based seller. Customers compete with each other by bidding the largest amount in order to secure the product. They also allow a ‘buy it now’ service on some sales to avoid the bidding process. but in most cases the bidding process is the , on the other hand, is a massive marketplace for buying and selling items at both fixed prices and to the highest bidder through an auction system.

Becoming an eBay seller enables you to access the following features:

  • Tools and features that make it easier as a seller than to get your brand across to customers than what’s available at Amazon, which promotes a premium shopping experience with restricted branding controls.
  • Putting your own items up for auction to the highest bidder. This enables shoppers to find products that are difficult to obtain anywhere else.
  • Buying the item outright and avoiding the bidding process to guarantee the sale. As a seller, this means that payment will be received immediately.
  • eBay does not offer a shipping and fulfillment process like Amazon so processes need to be out in place in order to make sure orders are completed and shipped to the customer. This can be done in-house or may mean hiring a third-party to do it for you but this will mean extra costing.
  • Like Amazon, you need to watch out for eBay seller fees.

So what should you choose?

When it comes to choosing to selling a product on Amazon and eBay, it helps by having a knowledge of your business’ operations. This includes the scalability and sheer number of products you plan to sell on the marketplace. This will give you a edge over your competitors.

It’s possible to sell on more than one marketplace and be successful but it’s important to plan and take correct action to make each one work for you. Take your time in making this decision. One option may seem great but may not make sense from a logistical point of view.

Having another medium to sell through can enable you and your business to enjoy increased sales and revenue. Being part of a medium such as Amazon and eBay is beneficial to both them as a marketplace and you as a seller.

Selling on Amazon or Ebay - Pros and Cons
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