Amazon vs eBay: seven key differences to consider

Amazon and eBay are household names for a reason: nearly 200m people use the two marketplaces to shop online.

Consequently, when you're choosing which of these marketplaces to host your online store on, here are seven attributes to keep in mind:

Fees

On eBay, you're free to list and relist until your item sells. Once you do sell, eBay takes a straightforward 10% cut, detailed in a monthly invoice.

On Amazon, there are referral and variable closing fees.

• Referral fees are based on on the type of product being sold. For example, Amazon takes a 10% cut for 'Tires & Wheels', while 'Video Games' render a 15% cut.

• Variable Closing fees are also contingent on the category of the item you are selling. Media products are a flat $1.35, unless they are 'Fulfilled By Amazon', and the fees for non-media products are based on the weight of the item.

In addition, there is a fee of $.99 cents per item, regardless of its category. However, this cost is waived for sellers who pay a subscription fee. And only after all of these fees are deducted does a seller receive the final amount.

Payment

eBay is a PayPal partner, and accordingly, PayPal is the preferred method of payment on that site. After a sale is completed and the item arrives at the buyer's house, the money is made available in the seller's Paypal account.

As an eBay seller, you can use that Paypal balance on eBay and other sites that accept that form of payment,  but if you want to deposit your PayPal balance into your bank account, you are limited by how much you can transfer to your bank account each month. This limit can be lifted, but it can be a hassle.

On Amazon, all sellers have to use Amazon Payment, which is a service that deposits the money you earned directly into your bank account every two weeks.

Convenience

Online shopping is popular because it's more convenient going to a brick-and-mortar store, where selection may be more limited.

eBay is the home of the auction-style listing, which trigger-happy shoppers may find inconvenient since they must wait for the auction to end. Moreover, shoppers usually must wait at least another day for the seller to process and ship their order.

In this regard, eBay is more trafficked for rare, limited edition, and used items - items that are not commodities.

Whereas eBay rewards patient deal-hunting, Amazon is all about convenience. A $79 yearly subscription with Amazon Prime gives members the right to free two-day shipping. Because of Amazon Prime, millions of customers shop on Amazon for everyday essentials, such as coffee beans, socks, and toilet paper.

Customer engagement

On Amazon, buyers expect little to no engagement with sellers. However, this has changed in recent years, as Amazon has put more effort into badgering shoppers to review their transactions on Amazon.

On eBay, the feedback system is very important. eBay's interface plants its notifications box in a very conspicuous place and stresses leaving feedback for completed transactions by flagging those items.

In fact, eBay sellers do their best to maintain impeccable feedback, to the point that some beg buyers to reach a compromise with them in the event of a disagreement, rather than rashly dole out negative feedback. 

Customer behavior

Because many listings on eBay are auctions, it's easy for fraud to occur. A significant number of false buyers harass sellers by bidding on items and refusing to pay if they win.

These auction trolls also sometimes bid to raise the price of the item and cause the legitimate winner to pay an inflated price. If you face an auction troll, you may choose to invoke a "Second Chance Offer" or in any other situation where the winner cannot pay, you can choose to pass the item along to the next highest bidder.

image credit: troll.me

"Sniping" is another commonly encountered phenomenon in auction-style listings. "Snipers" are users who bid at the very last second. If your item is listed for over three days and you haven't seen much bidding activity, it's safe to assume that someone will bid right before the auction ends.

• Customers have the option to subscribe to your store and and receive newsletters that informs them about restocks or new items. 

All items on Amazon are one-click purchases. Amazon customers do not place as high a priority on the thoroughness of the description of the condition of the item as they do on eBay.

Format

On eBay, every product gets its own listing and photos are an integral part of eBay's listing format. You must have at least one photo uploaded onto your listing. If you're selling a used or rare item, multiple photos are mandatory to gain a following.

This process can be time consuming, but it's extremely important to get your listing presentation right. 

On Amazon, products share listings - meaning that multiple sellers hawking the same product share the same listing. Only one stock photo is used for all of an item's listings, and the way sellers differentiate themselves is via price and the Buy Box.

Shipping

On eBay, you can determine your own shipping costs, although high shipping costs will make your item unpopular. The actual process is streamlined and convenient since you can print the shipping label at home and then drop off the package at a mailbox. 

Amazon provides a shipping credit to help cover the cost of mailing out the item. Shipment is still required even the if the actual shipping amount is greater than the credit. There are flat shipping rates for most items.

For example, books are $3.99. Alternatively, for a fee, you can have Amazon fulfill the order via 'Fulfillment by Amazon' (FBA) and ship it to the buyer if they also stock and sell the item. 

Conclusion

Depending on the category of items that you sell, eBay and Amazon will reap varying levels of success. eBay's auction-style listing gives you the opportunity to sell a product in high demand for hundreds of dollars over the suggested retail price.

On Amazon you can gain a set of customers who will revisit your store on a regular basis. Customers are well aware of the contrasting atmospheres of these marketplaces and according to their own needs, will go to one or the other.   

If you're not sure which marketplace is the best for you, you can test your products on both marketplaces and analyze buyer behavior. Even better, you can open stores on both of these marketplaces and other channels to maximize profits.