eBay and Amazon are the two largest online marketplaces in Australia, both offering a wide variety of products and services for e-commerce sellers. However, there are some key differences between the two platforms, and it’s important to understand these differences before you decide where to sell.
eBay is an online platform that lets sellers list or create auction listings for buyers around the world. eBay operates on a marketplace model, which means that it doesn’t own any of the products that are sold on its platform. Instead, eBay provides a platform for sellers to list their products and buyers to purchase them.
Amazon, on the other hand, is an online retailer that sells a wide variety of products, including both its own products and products from third-party sellers. It operates on a hybrid model, which means that it both sells its own products and acts as a marketplace for third-party sellers.
Now that we know the basic difference between the two, let’s dive into the specifics of each category and see why a seller may prefer one over the other.
Amazon vs. eBay: Which is Better?
eBay and Amazon are two of the largest online marketplaces in the world. They both offer a wide variety of products and services, and they both have their own advantages and disadvantages.
eBay is a good option for buyers who are looking for unique or vintage items, or for buyers who want to negotiate on price. eBay is also a good option for sellers who are looking to sell a small number of items or who have unique or vintage items to sell. Amazon is a good option for buyers who are looking for a wide variety of products at competitive prices for a global audience.
Ultimately, the only way to decide which marketplace might be right for you is to weigh the different pros and cons against each other.
Read along as we look at aspects such as the selling process, tools, loyalty rewards, shipping, and fulfilment in further detail.
Amazon: The E-commerce Giant
Amazon is the world’s largest online retailer, and it offers a wide variety of products, including both its own products and products from third-party sellers. Amazon is known for its competitive prices, fast shipping, and convenient shopping experience.
Amazon offers a number of features that make it a popular online shopping destination, such as:
- Streamlined Selling Process
Amazon offers a streamlined selling process, making it easier for sellers to list and manage their products. The platform provides a user-friendly interface where sellers can quickly add items, set prices, and manage their inventory. This simplicity is especially beneficial for beginners and those looking to scale their e-commerce business.
- Amazon’s Seller Tools
Amazon provides a suite of seller tools to help vendors succeed through Seller Central. These tools can help sellers with everything from product research and listing optimisation to order fulfillment and customer service.
There are a wide variety of Amazon seller tools available, each with its own unique features and benefits. Some of the most popular Amazon seller tools include:
- Product research tools: These tools help sellers identify profitable products to sell on Amazon.
- Keyword research tools: These tools help sellers identify relevant keywords for their product listings and advertising campaigns.
- Listing optimisation tools: These tools help sellers optimise their product listings for search engines and improve their chances of ranking high in search results.
- Order fulfillment tools: These tools help sellers automate the order fulfillment process, saving them time and money.
- Customer service tools: These tools help sellers provide excellent customer service to their customers.
Amazon seller tools can be a valuable asset for any Amazon seller. By using the right tools, sellers can improve their efficiency, profitability, and customer satisfaction. Additionally, tools like Amazon Sponsored Products and Enhanced Brand Content allow sellers to promote and enhance their listings.
- Commission Fees and FBA Costs
Amazon charges sellers referral fees, which vary by category and product type. Amazon charges sellers a commission fee on each sale. The commission fee varies depending on the product category, but it is typically between 8% and 15%. Amazon also charges a referral fee on each sale. The referral fee is a flat percentage of the sale price, and it is typically between 0.99% and 1.99%.
FBA fees are charged for sellers who use Amazon’s Fulfillment by Amazon (FBA) program. FBA fees include pick and pack fees, storage fees, and shipping fees. The FBA fees are calculated based on the size and weight of the product, as well as the shipping destination.
- Engagement metrics
Amazon provides various engagement metrics to help sellers understand their performance. These metrics, in a way, help Amazon determine seller ratings as well. Here are some of the most important metrics:
- Order Defect Rate (ODR): The ODR is the percentage of orders that have a defect, such as a late shipment, cancellation, or negative feedback. A high ODR can lead to suspension or termination of your selling account.
- Pre-fulfillment Cancel Rate (PFCR): The PFCR is the percentage of orders that are cancelled before they are shipped. A high PFCR can lead to lower search rankings and increased fees.
- On-Time Delivery Rate (OTDR): The OTDR is the percentage of orders that are shipped on time and arrive in the estimated delivery window. A high OTDR can lead to higher search rankings and reduced fees.
- Customer Feedback Rating (CFR): The CFR is the percentage of customers who leave a positive feedback rating after purchase. A high CFR can lead to higher search rankings and increased sales.
- Returns Acceptance Rate (RAR): The RAR is the percentage of returns that are accepted by the seller. A high RAR can lead to a lower ODR and increased customer satisfaction.
In addition to these metrics, Amazon also considers other factors such as seller reviews, product reviews, and sales volume when determining seller performance. Monitoring these metrics can help sellers improve their reputation and visibility on the platform.
- Shipping and fulfillment
Amazon offers two primary fulfilment options for all sellers:
- Fulfillment by Amazon (FBA): FBA is a service where Amazon stores, picks, packs, ships, and returns your products for you. FBA can save you a lot of time and effort, but it comes with additional fees.
- Seller-fulfilled prime (SFP): SFP is a service where you ship your products directly to customers from your own warehouse or fulfillment center. SFP can save you money on fees, but it requires more time and effort on your part.
Here’s a comparison chart of the two services to help you decide which of the two might be most suitable for your business.
|Amazon stores seller’s products in its fulfilment centres.
|Sellers are responsible for storing their own products.
|Amazon handles all returns.
|Sellers handle all returns.
|Picking and packing
|Amazon picks and packs orders for the seller.
|Sellers are responsible for picking and packing orders.
|Amazon ships orders for the seller.
|Sellers are responsible for shipping their orders.
|Amazon charges fees for FBA services based on the size, weight, and value of the product, as well as the storage and fulfilment costs.
|There are no fees for FBM, but sellers may incur shipping costs.
|FBA is a convenient and efficient way to fulfil orders.
|FBM requires more time and effort, but it can be more cost-effective.
- Ease of use and integration
Amazon’s seller platform is designed for ease of use and integration. It offers APIs and third-party integrations allowing sellers to connect their tools and software. This flexibility enables customisation and automation of various aspects of the selling process.
There are a wide variety of Amazon integrations available, covering a wide range of functions, including:
- Order management: Amazon integrations can help you manage your orders more efficiently. For example, you can integrate your Amazon account with your accounting software to automatically import your sales data and generate invoices.
- Inventory management: Amazon integrations can help you manage your inventory more effectively. For example, you can integrate your Amazon account with your inventory management software to automatically update your inventory levels when you make a sale.
- Shipping and fulfilment: Amazon integrations can help you automate your shipping and fulfilment process. For example, you can integrate your Amazon account with your shipping software to automatically generate shipping labels and track your shipments.
- Customer service: Amazon integrations can help you provide better customer service. For example, you can integrate your Amazon account with your customer relationship management (CRM) software to track customer interactions and provide personalised support.
- Marketing and sales: Amazon integrations can help you market and sell your products more effectively. For example, you can integrate your Amazon account with your email marketing software to send automated emails to your subscribers about new products and promotions.
- Extensive Customer Base and Prime Membership
One of Amazon’s most significant advantages is its massive customer base, with millions of active shoppers. Amazon has the largest customer base of any online retailer in the world. In 2023, Amazon had over 200 million active customers worldwide.
One of the key drivers of Amazon’s customer base is its Prime membership program. Prime members pay an annual fee for access to benefits such as free two-day shipping, exclusive deals, and access to Amazon Prime Video and Amazon Music. As of 2023, Amazon had over 200 million Prime members worldwide. This is more than half of Amazon’s total customer base.
Amazon’s extensive customer base and Prime membership program give it a significant advantage over its competitors. Amazon’s Prime membership program with faster shipping and fulfilment timelines also helps it to attract and retain customers.
Here are some of the benefits of Amazon’s extensive customer base and Prime membership:
- Increased sales: Amazon’s large customer base gives it access to a massive pool of potential buyers. This allows Amazon to sell a wide variety of products and services and generate significant revenue from its sales.
- More advertising revenue: Amazon’s large customer base also makes it a valuable platform for advertisers. E-commerce sellers are willing to pay top dollar to reach Amazon’s customers. This helps small businesses gain more visibility by making their product listing stand out.
- Increased customer loyalty: Amazon’s Prime membership program helps to increase customer loyalty. Prime members are more likely to shop on Amazon because of the benefits they receive, such as free two-day shipping and exclusive deals. This helps Amazon to retain its customers and to grow its customer base over time.
Overall, Amazon’s extensive customer base and Prime membership program are two of its most valuable assets. These assets give Amazon a significant advantage over its competitors and allow it to generate significant revenue and profits.
eBay: Niche Markets and Global Audience
eBay is a global online marketplace where people and businesses buy and sell a wide variety of goods and services. Founded in 1995, eBay has grown to become one of the largest online retailers in the world. eBay is known for its wide selection of products, competitive prices, and convenient shopping experience.
- Fee Structure and Payment Options
Like most online marketplaces, eBay has a two-tier fee structure. This includes:
- Insertion fee: This is a fee that is charged when you list an item for sale on eBay. The insertion fee is based on the starting bid or Buy It Now price of the item.
- Final value fee: This is a fee that is charged when your item sells. The final value fee is based on the total sale price of the item, including shipping and handling costs.
- eBay’s Seller Tools
eBay Seller Tools are a suite of tools and services that eBay offers to help sellers manage their businesses more efficiently and effectively. eBay Seller Tools can help sellers with everything from listing products to managing orders to providing customer service.
Here are some of the key features of eBay Seller Tools:
- Listing tools: eBay Seller Tools offers a variety of listing tools to help sellers create and manage their listings. These tools include listing templates, bulk listing tools, and product research tools.
- Order management tools: eBay Seller Tools offers a variety of order management tools to help sellers manage their orders. These tools include order fulfilment tools, shipping tools, and returns management tools.
- Customer service tools: eBay Seller Tools offers a variety of customer service tools to help sellers provide excellent customer service to their buyers. These tools include customer messaging tools, feedback management tools, and dispute resolution tools.
eBay Seller Tools also offers a variety of other features, such as marketing tools, analytics tools, and financial tools. These tools are available to all eBay sellers, but some features are only available to sellers who subscribe to certain eBay services.
- Engagement metrics
eBay uses a variety of engagement metrics to gauge seller performance. Some of the most important metrics include:
- Seller rating: This is a rating that is based on buyer feedback. Sellers can receive a rating of positive, neutral, or negative. A high seller rating is important for attracting buyers and increasing sales.
- Transaction defect rate (TDR): This is the percentage of orders that have a defect, such as a late shipment, cancellation, or return. A low TDR is important for maintaining a good seller rating and avoiding penalties from eBay.
- Item not as described (INAD) rate: This is the percentage of orders where the buyer claims that the item they received was not as described in the listing. A low INAD rate is important for maintaining a good seller rating and avoiding penalties from eBay.
- On-time delivery rate: This is the percentage of orders that are shipped on time and arrive in the estimated delivery window. A high on-time delivery rate is important for maintaining a good seller rating and avoiding penalties from eBay.
eBay also considers other factors such as the number of listings a seller has, the number of sales a seller makes, and the average sale price when determining seller performance. Sellers can track their engagement metrics in the Seller Dashboard.
- Shipping and fulfillment
eBay offers a variety of shipping and fulfilment options for sellers. Sellers can choose to ship orders themselves using a third-party shipping provider or use eBay’s Global Shipping Program (GSP).
The GSP is a service that eBay offers to sellers who want to ship their items internationally. eBay partners with shipping carriers to offer sellers discounted shipping rates and to handle the customs process. Sellers who use the GSP can offer buyers a flat rate for international shipping, and eBay will handle the rest.
Sellers can also use eBay’s Fulfillment by eBay (FBE) program. FBE is a service where eBay stores, picks, packs, and ships orders for sellers. Sellers simply send their products to an eBay fulfilment centre, and eBay takes care of the rest. FBE can be a convenient and efficient way to fulfil orders, but it does come with a cost. eBay charges fees for FBE services.
Which shipping and fulfilment option is right for you will depend on your individual needs and preferences. If you are a high-volume seller or if you value convenience, FBE may be the best option for you. If you are a low-volume seller or if you are on a tight budget, shipping orders yourself may be the best option for you.
- Ease of use and integration
eBay is known for its ease of use and integration. Sellers can create listings, manage orders, and provide customer service through eBay’s user-friendly platform. eBay also offers a variety of integrations with third-party software and services, making it easy for sellers to manage their businesses.
eBay recently launched new social sharing features that make it easier for buyers to share products with their friends and followers on social media. This can help sellers to reach a wider audience outside the platform where users are most active and increase their sales.
eBay also recently launched an AI product listing feature that helps sellers create product listings more quickly and easily. The AI feature can generate product titles, descriptions, and bullet points based on the seller’s input. The AI feature can also help sellers to optimize their product listings for search engines.
- Loyalty Programmes
eBay Plus is a paid loyalty program that offers participating eBay buyers additional rewards and benefits (such as exclusive offers, free shipping, and returns) for shopping on eBay. eBay Plus members account for a significant portion of eBay’s sales, and they are more likely to shop on eBay more frequently and spend more money per purchase than non-members.
However, in addition to offering excellent benefits for buyers, it can also prove to be highly advantageous for sellers. Here are some of the pros of the eBay Plus programme for sellers in Australia:
- Increased visibility on eBay
- Access to eBay’s most engaged buyers
- Boosted sales and conversions
- eBay funded postage on expedited shipping methods
- Swifter eBay returns and processing
- eBay funded promotions
Choosing between the Two
eBay and Amazon are both popular online marketplaces for sellers, but they have different strengths and weaknesses. eBay is a good choice for sellers who want flexibility in pricing and shipping, while Amazon is a good choice for sellers who want to reach a large customer base.
Ultimately, the best platform for you will depend on your individual needs and preferences. However, consider your target market, the fees charged by each platform, and the time you are willing to invest in marketing and promotion of your listings.