Let me guess…
You’ve been selling on Amazon for a while now, maybe doing a combination of retail arbitrage, book flipping, and wholesale, and you’re wondering if it’s time to explore more online marketplaces.
Perhaps you’ve branched out into FBM on occasion to sell some highly-profitable items that you aren’t allowed to sell on Amazon FBA. You have realized that if you set up a weekly shipping day, FBM can be profitable without taking too much additional time.
Then the thought crosses your mind: If you’re selling through Amazon FBM, why not sell on eBay, too?
I’ve been exactly where you are. I’ve found that Amazon FBA is by far the most powerful and easiest way to make money through retail arbitrage or wholesale.
Sometimes there comes a point when you run up against some of the limitations of the platform, like the recent restock limits, the time it takes to ship boxes into FBA during the Q4 selling frenzy, and profitable products that you can’t send to Amazon’s warehouses.
That’s why I’ve put together this guide to help resellers like you determine if selling on eBay is the right move for your business.
eBay vs. Amazon: Main Differences
While there are lots of differences between the two platforms, they are similar enough to make eBay a popular additional platform for resellers who are already experienced in selling through Amazon FBA.
In general, the main differences fall into five categories:
- Fee Structure
- Fulfillment Methods
- Active Buyers & Sellers
- Customer Return Policy
- Product Restrictions
Amazon FBA Seller Fees
The thing to keep in mind is that Amazon FBA charges a “Pick & Pack” fee and storage fees for any items you send into their warehouses.
This is on top of the referral fees and the variable closing cost, which is based on final sale value.
The additional fees may be more than worth it to you to avoid renting storage or warehouse space yourself and to automate fulfillment, but they do tend to add up.
They can also limit the number of products that are profitable after FBA fees.
eBay Seller Fees
Here are the selling fees that you’ll have to pay on eBay:
Insertion Fees. These are the fees you pay to list your products on eBay, and they are generally low, usually $1.00 per insertion fee or listing.
In addition, starter eBay accounts automatically receive 200 free insertions per month, and there’s the possibility for more if you open an eBay store.
This compares nicely to Amazon, which has no listing fee but has an individual seller per item fee of $0.99 per unit sold unless you upgrade to a professional seller account.
Final Value Fees. This fee is taken as a percentage of the final sale price of your item, which includes any shipping and handling you add to your purchase price but not the sales tax.
The final value fee can range from 2-percent to 12-percent, but most general merchandise is a flat 10-percent fee.
Again, this fee has an Amazon analog in the referral fee. Amazon’s referral fees range from 8-percent to 45-percent (for Amazon branded device accessories) with most products landing at 15-percent.
Payment Processing Fees. Another fee eBay sellers may incur is the payment processing fee. If you are a managed payments seller through eBay, then this fee will already be included in your final value fee.
Optional Listing Upgrades. Finally, eBay has a range of listing upgrades available, from subtitles and bold text to highlighted sale boxes. Each of these upgrades range from $0.10 to $1.00. They may be worth it if your item gets noticed, but most sellers use them only for high dollar or popular items as they tend to add up quickly.
They are completely optional, and you can use eBay’s free fee calculator to make sure you’re still hitting your ROI targets.
The Verdict: eBay has Lower Fees
Overall, Amazon FBA is the most expensive in terms of fees, but it also provides the most service and, usually, a bit of a price bump.
Still, eBay has fewer fees than Amazon FBM as well, especially now that they’ve started giving every seller 200 free insertions a month. It’s not going to hurt you in the fee world to add eBay on as a selling platform.
There will be a little more effort required in listing and shipping items.
With Amazon, you have two fulfillment methods to choose from: Amazon FBA or Amazon FBM. Most sellers choose to list through both fulfillment methods, since some profitable products can’t be sent into FBA and some products sell quickly and are profitable on FBM but not on FBA.
Additional Benefits to Amazon FBA:
- 150 million Prime subscribers who shop loyally every month
- Easy customer service and returns
- The Prime price bump since many customers are willing to pay more for 2-day shipping
eBay, on the other hand, has only one fulfillment method: You.
This may work for your business operations if you’re already dealing in bulk, if you have space and employees, if you partner with a fulfillment center, or if you have the time to pack and ship yourself.
However, it’s something to keep in mind before you jump into selling on eBay with both feet. You’ll need a fulfillment plan in place, including a storage and item organization plan, before you start listing hundreds of products, or you could find yourself with a mess on your hands.
The Verdict: Amazon has Better Fulfillment Options
Most sellers consider Amazon FBA to be the easiest and fastest fulfillment method and choose it because they like the automated, hands-off approach.
However, if you put business processes into place to streamline your fulfillment with eBay, it can become another profit center without costing you too much time. Some eBay sellers use platforms like Pirate Ship to help manage the shipping, but you still have to handle printing and packing all of your orders.
Active Buyers & Sellers
Currently, there are 185 million potential buyers and 19 million active sellers on eBay while there are 310 million potential buyers and only 3 million active sellers on Amazon.
At first glance, it might seem like, since there are more active sellers on eBay and fewer active buyers, Amazon FBA is the clear winner in terms of competition.
But not so fast.
The numbers don’t tell the whole story in this case. First of all, eBay enjoys greater customer loyalty—especially with customers who use the marketplace to source vintage and unusual finds.
Second and more importantly, when you sell on Amazon, the other sellers you’re competing against are often wholesalers, big box stores, large mom-and-pop retailers, and Amazon itself.
In contrast, eBay is a platform designed only for third party sellers, so you’ll never find yourself in a competition against the largest retail giant ever known to mankind.
The Verdict: eBay has Less Competition
Due to attracting only third party sellers and mainly individual resellers, you’re less likely to have to compete against mega sellers on eBay. Although there are some heavy hitters there, it is less crowded than Amazon for many categories.
Customer Return Policy
This is a tough place to compare, because the customer return policies of each marketplace have pros and cons. In a nutshell, Amazon allows customer returns for any reason or no reason at all through their Amazon A to Z Guarantee, and they sometimes allow returns up to 180 days after purchase.
In contrast, eBay allows its sellers to set their own return policies (though they do highly encourage sellers to be reasonable) and conditions, allowing sellers to charge return shipping and restock fees if they wish.
The Verdict: Both Return Policies Have Their Upsides and Their Drawbacks
Because of the return policies and other policies, Amazon is often considered a customer friendly platform while eBay is considered a seller friendly platform. I have had fewer issues with eBay returns than Amazon in my career, but that might not always be the case.
It may be tempting to assume eBay’s return policies are better, but there are trade offs:
- Amazon’s return policy results in greater customer trust and an ever-expanding customer base.
- Amazon’s return policy results in higher sales and convenience pricing as customers are able to try a product and know they’re allowed to return it.
- eBay’s return policy results in fewer customer returns overall, but makes the seller rating even more important for gaining customer trust.
Finally, one of the main differences on Amazon vs eBay is the number of products you’re allowed to sell. Amazon takes the customer experience very seriously, so as a new seller you’ll likely be “gated” or restricted in about half of its product categories.
As you sell for longer and go through the ungating process, you’ll find you’re able to sell more—but then there are hundreds if not thousands of subcategories and brands that you’ll have to get permission to sell.
Some brands won’t ever allow you to sell their products. Becoming ungated is an ongoing pursuit for an Amazon FBA seller.
eBay, on the other hand, has specific restricted products, such as firearms, explosives, etc., but other than that, everything is up for grabs.
The Verdict: eBay Has Fewer Product Restrictions
Since eBay is a smaller marketplace, most brands and products don’t monitor the platform as aggressively as they monitor Amazon, leading to more selling opportunities.
In fact, this is one of the main reasons that many online sellers branch off into eBay: to sell products that they can’t sell on Amazon.
eBay | Seller Snapshot
The sellers most likely to make a decent living on eBay are full-time resellers (or resellers who can hire others to do their order fulfillment) who have storage for their inventory and the business processes set up to ship orders multiple times per week.
- Founded in 1995
- Active Buyers: 185 million
- Active Sellers: 19 million
- Latest Annual Revenue: $10.271 billion
eBay Pros and Cons
|Less Seller Competition||Smaller Audience|
|More Control||No Fulfillment Service|
|Customer Loyalty||More Difficult Fulfillment|
|Fewer Category Restrictions||Less Buyer Trust|
|Easier to List||Lower Prices on everyday goods, books, DVDs, and games|
|Lower Overall Fees||Time intensive listing process|
|Only 3rd Party Sellers: Not Competing with Amazon or eBay on Listings|
Amazon In a Nutshell
The online sellers most likely to do well on Amazon FBA are sellers who prefer book flipping, retail arbitrage, or online arbitrage over sourcing high-dollar vintage items.
Amazon FBA works best for resellers who focus on volume and quick turnover, though many online businesses make it work selling fewer higher dollar items.
- Founded in 1995
- Active Buyers: 310 million
- Active Sellers: 3 million
- Prime Subscribers: 150 million households
- Latest Annual Revenue: $386.064 billion
Amazon Pros and Cons
|Larger Audience||More Competition|
|Greater Buyer Trust||More Restricted Categories|
|More Branding and Wholesale Opportunities||Higher Fees for FBA|
|More RA and OA Opportunities||Harder to Add New Listings|
|Convenience Pricing on Consumables||Less Control of Business|
|Fulfillment Service||Restock Limits|
|More Mobile Buyers||May Compete with Amazon on Certain Listings|
Amazon Sourcing Tips
If you understand how to source for Amazon, you already have the basics down for eBay. This section gives you a quick primer if you aren’t familiar with the process.
Amazon tends to be the go-to solution for retail arbitrage and online arbitrage, particularly for books and for replenishable items like groceries, household products, beauty, health, and personal care.
Generally speaking, customers trust Amazon slightly more, and they like the Prime 2-day shipping, so they are more likely to choose the Amazon Marketplace for consumables that they use regularly.
Most consumers are also willing to pay a little more for the convenience and the A to Z guarantee they get with Amazon, so you’ll enjoy a price bump on items like toys, electronics, DVDs, games, and more.
Keep these tips in mind when you’re sourcing:
Look for items that are regularly in stock at your local store or another online retailer that sell frequently for a higher amount on Amazon.
Finding four or five replenishables can bring in more profit for far less time than finding 100 one-off flips. This is really helpful for steady cash flow in your online ecommerce business.
Using Tactical Arbitrage can really help up your replen game by searching for products that fall between the cracks of most searches.
Think of finding fast turning products that might be slightly below what everyone else searches or perhaps use it on a store that everyone is not searching in.
Use Amazon FBA
Even better, if you can find replenishables that are still profitable after FBA fees, these products are like goldmines for your e-commerce business. Ship in as many units as you can find, hold your price steady, and put that part of your business on auto-pilot.
Stock Up for Q4
While consumers are willing to pay more to get access to 2-day shipping year round, this is especially true in the fourth quarter with the holidays looming.
Make sure you have enough product on hand. Most sellers prepare months ahead and some times a year before to plan out their Q4 sourcing and selling strategy.
Maximize Efficiency with Online Arbitrage
The thrill of the hunt can be exciting, but it’s difficult to always get out to a brick-and-mortar store. Software partners such as Tactical Arbitrage help you make use of your in-between times to grow your business.
You can source on your lunch break, while watching TV in the evenings, or on your commute.
Grab a free trial of Tactical Arbitrage here.
eBay Sourcing Tips
If you are already sourcing for products to sell on Amazon, you have a general idea of the rules and techniques to find good flips. These rules apply to sourcing for eBay as well with a few important additions and addendums.
Cast a Wider Net
eBay is more friendly to sellers with fewer product restrictions, so cast your net wider. Source for eBay at thrift stores, estate sales, and garage sales in addition to checking the clearance aisles at your big box stores.
You can also look at selling items with damaged boxes and even used items!
Look for Vintage Items
Vintage clothing, board games, books, toys, and collectibles do much better on eBay than they do on Amazon, if you’re even allowed to sell them on Amazon. Keep your eyes open for these opportunities!
Look for Textbooks
We’re all familiar with the headache of trying to sell textbooks on Amazon. Don’t pass these by! They do well on eBay, especially in August and January.
Don’t Forget to Look for New Items
Remember, while eBay is still thought of as the place for used items, 60-70% of items sold on eBay are actually new. So, don’t assume new items should automatically get listed on Amazon.
If you use both marketplaces, check an ROI calculator to quickly see which platform is better for each item.
Use Online Arbitrage
It may seem like OA wouldn’t be as effective for eBay, but there are plenty of ways you can use Tactical Arbitrage to scale up your eBay business.
We’ll help you look for eBay to eBay flips, Amazon to eBay flips, and wholesale opportunities.
Which Marketplace Is Better & Who To Choose?
As I’m sure you realize after reading all of the above and doing your own research, it’s not really a question of which marketplace is better, per se. Each marketplace has its challenges and its advantages, and there are upsides and tradeoffs with each.
eBay May Be Better for Sellers Who:
- Like to have more control over their business, including return policies and shipping policies.
- Have business processes in place that allow them to pack and ship items efficiently.
- Have access to vintage products.
- Have a warehouse or other storage facility.
- Have reached their capacity with Amazon FBA restock limits.
- Are already doing bulk bookselling or wholesale product sourcing for Amazon FBA and need a place to list products that are restricted on Amazon, such as textbooks and used clothing.
Amazon FBA may be Better for Sellers Who:
- Prefer a more hands-off, automated approach to their business.
- Have limited storage space.
- Focus mainly on consumables, such as beauty and household products.
- Don’t want to deal with customer service issues, such as returns and refunds.
- Are just getting started and want to scale up more quickly.
It’s no wonder that new online sellers often ask which marketplace they should choose. Amazon and eBay are two powerhouse platforms whose names are synonymous with online shopping and ecommerce.
The question of whom to choose is more a question of which marketplace is better suited to your online retail business model.
Which one do you like better? Which one feels easier and more fun for you?
Perhaps it’s better to think of the two marketplaces as complementary rather than in competition. The pitfalls of one platform are often an advantage on the other, and vice versa.
In reality, many online resellers choose both platforms in order to maximize their active customers and diversify their income streams.
Whichever platform you use, Tactical Arbitrage can help you source profitable items quickly and efficiently so you can scale your business.
Why Is eBay Cheaper Than Amazon?
One of the most popular ways to shop online today is through platforms like eBay and Amazon. Both sites are incredibly popular, making them two of the most frequented sites on the web. For many, the appeal of these sites is their ease of use and low prices.
The reason is that Amazon has become a very customer centric business and leveraged its Prime delivery and enormous third party sellers tapping in on this marketplace. Amazon prime customers will pay extra for fast and easy convenience.
Do Buyers Trust eBay or Amazon Sellers More?
The question of whether buyers trust sellers on the Internet more than they do in-person has been a hot topic for years. The answer is, it depends.
In some cases, online sales are preferred over brick and mortar stores because there’s no need to go through an entire store when you can buy something from your computer at home.
Feedback plays an important role for both marketplaces and is really the determinate in most cases, so make sure you do all you can to gain positive reviews.
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