Selling on both Amazon and eBay grants me a unique perspective to both platforms. My fairly recent (2011) conversion of the majority of my Amazon sales to Fulfillment By Amazon (FBA) has made me a big advocate for FBA.
eBay vs. Amazon on Fees
So let’s compare. The biggest comparison, of course, is the financial comparison. I hear all the time how much more expensive it is to sell on FBA. It isn’t. Most eBay sellers only compare their eBay selling fees to their FBA fees and this is a very incomplete comparison. The vast majority of transactions on eBay (I’d estimate 98%) are paid for via PayPal, so for a complete comparison you really have to include PayPal fees. Once you include those fees, the two marketplaces are very close to even.
Of course, each seller and each category will have unique fees, so the exact difference can only be compared by each seller. Here is a link to the eBay Fee Structure, PayPal fees, and Amazon FBA fees.
In my experience, when you nail it down, you end up with a very similar percentage of your sales. For simplicity’s sake I figure 25% for eBay/PayPal and 30% for FBA. The majority of my transactions will be well below those numbers, however, this allows me plenty of leeway to lower prices, hold sales and otherwise liquidate unsatisfactory inventory without losing money. It keeps my buying decisions ‘safe’ for my business model, and I am more than happy to pay the extra 5% to FBA for the shipping and customer service help.
So what are the other comparisons? Well, for FBA the advantages to my business are almost too numerous to mention. When I ship my inventory to Amazon for them to fulfill, I have in essence hired a warehouse crew, customer service employee, shipping department and more.
The Advantages of FBA
FBA Advantage #1 – Warehouse Crew – How many hours have YOU wasted looking for that item that you just sold on eBay and now can’t locate? Amazon’s warehouse crew takes my items from their UPS boxes and stores them in Amazon’s state-of-the-art warehouse and can pull, pick and ship to the customer 10 times faster and more accurately than I.
FBA Advantage #2 – Customer Service Employee – It is extremely rare for me to get a question from an Amazon buyer. On the other hand, I probably get 2 – 6 questions per DAY from eBay customers that require time and effort to research, reply and coddle the customers. Amazon handles the vast majority of any customer interaction on items purchased via FBA.
FBA Advantage #3 – Shipping Department – I pack and ship boxes to Amazon at least twice per week. Each box contains approximately 20 – 50 items ready to ship to buyers. Only a small percentage of those items require pre-packing by me – perhaps a plastic bag for a plush toy, but most ship ‘naked,’ just as I’ve purchased them. The only effort I have to make is to print an FBA ‘barcode’ label on my DYMO printer and play Tetris fitting everything into the box. Then I print my FBA shipping labels from Amazon using their incredibly inexpensive UPS corporate rates and they head off with the UPS man. I’d much rather pack one box to Amazon than 35 individual packages to customers.
The Advantages of eBay
EBay Advantage #1 – International Sales – this one is huge! I really miss my International sales. There were months on eBay that they ran as high as 35% of my total. With FBA the only items that can ship internationally at this time are books and media.
EBay Advantage #2 – Branding – eBay offers much more of an opportunity to brand your store and listings than you can on Amazon.
EBay Advantage #3 – Setting your own policies – In spite of the recent change to eBay’s return policies for sellers, you still have a much better opportunity to set your own policies and procedures on eBay than you do on Amazon.
So, in conclusion, do I recommend eBay or FBA? Well, IT DEPENDS. It depends on so many factors. What are you selling mainly and what are your goals for your online business? Each marketplace, in my opinion, has its own strengths and weaknesses. I believe most online businesses can use them both to their advantage, although some are more suited to one or the other.
What do you think? Where do you sell, and why?