The Pros and Cons of Selling on Amazon and eBay
Off the bat, it might seem like selling on online marketplaces like Amazon and eBay is easily a win-win situation for both the marketplaces and online merchants. The former get to gain an expanded product range with no need for an in-store physical inventory, whereas online merchants get the exposure they have always longed for. But in reality, as much as there are pros, there are also some cons to selling on Amazon and eBay.
Getting to know those pros and cons of selling on Amazon vs eBay will help you make the decision of whether you should be selling on one of them, or maybe even both. In this post, we’ll tackle what benefits you and what doesn’t so you can carefully study all factors in play and make the smart move.
The Pros of Selling on Amazon and eBay
Selling on marketplaces like Amazon and eBay can do wonders for your business, and the reasons are a blend of the size and reach of these specific two as well as consumer behavior.
Increase sales through high traffic channels
The reward of selling on marketplaces such as Amazon and eBay roots from the scale of their online presence. Amazon draws nearly 184 million visitors a month and eBay is home to over 164 million active buyers — that’s a lot of eyeballs! And those eyeballs can translate into higher sales volumes. According to an Amazon seller consultant, sellers experience around a 50% increase in sales as soon as they become part of Amazon’s online storefront!
Generate new leads
A visitor’s chance of finding your products if they were listed 0n Amazon or eBay are much higher than them just being available on your online store. The easiest thing for a shopper to do when they find you don’t offer what they want is to just get it from elsewhere.
Also, when a customer has bought from you once, they are more likely to buy from you again as long as you maintain excellent service and product fulfilment. This applies most when you’re selling a category of products that is more likely to have recurring purchases – like hobby supplies, for example.
There’s also always a possibility to acquire new customers for your online store in general. You can read more on How to Attract New Qualified Customers for Your Online Store.
Inherited Trust Factors
Even if people don’t know your brands or products, they know and trust Amazon and eBay. Once your products are listed on these marketplaces, they gain credibility by proxy and become as trustworthy for the shoppers as these marketplaces already are to them.
You also have the opportunity to further gain the trust of your customers through excellent order fulfilment, for example.
Marketplaces are enticing to shoppers
Marketplaces are known for the traffic of visitors they bring in, and online ones don’t bring in any less than physical shopping malls or farmers’ markets.
As people crave the variety and the experience of finding everything in one place, they find that online marketplaces such as Amazon and eBay satisfy those cravings. Moreover, the additional features of a one-stop check out as well as support for the fulfilment process are alluring to buyers and provide them with a seamless experience that makes the buying process simple and convenient.
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The Cons of Selling on Amazon and eBay
Despite the fantastic advantages of selling on online marketplaces, the drawbacks still need to be considered carefully.
Marketplace fees
As lucrative as it could be to sell on an online marketplace, you are exposed to a cost that you should carefully understand. This includes marketplace fees, which is a deduction that is processed as a percentage taken from each sale – percentages varying from site to site. That’s why it’s crucial to consider most importantly your margins and the fee structure of the marketplace you’re selling on.
Limited control
Although online marketplaces could be rewarding platforms for online sellers, it’s important to remember that they’re sellers who are trying to look out for themselves, too. This could reflect as restricting the degree of which your presence could be branded along the products you want to showcase.
Besides, nothing could technically prevent them from going around third-party sellers and stocking their most popular products themselves.
Easily sync your inventory
Being the second point of sale means that the marketplace doesn’t sync its inventory together with your shopping stock, so it could be challenging to understand your stock levels without a lot of manual intervention.
Competition is Through the Roof
It’s true you’ll be adding to Amazon’s product range, but they already also have their own in-house products plus even more sellers from a variety of sizes: from giant to small. Selling your products on a marketplace is enticing for all the investment it saves you, but you also have to prepared for the amount of competition you’ll be facing.
Amazon vs eBay: Choosing a Marketplace
It could be tempting to choose all the internet’s marketplaces – after all, why not?
Except the why not is actually quite easy to answer: besides the fact that each online marketplace has a system that will take time and effort for you to fully understand and begin to use, each also has its own set of perks and limitations. So, it’s better to stick to one or two at max. Two of the biggest marketplaces you can sell on are Amazon and eBay, but even they have pros and cons. Here’s an overview of how each one of them works:
Selling on Amazon
Amazon’s Marketplace takes the sharper retail track, and as a retailer itself, Amazon provides tools to help third-party sellers become part of a seamless and popular shopping experience for consumers.
If you opt for Amazon, here is what you should be learning:
- Fulfilment by Amazon, a feature where you get to enjoy sending your inventory to Amazon as they handle shipping and fulfilment themselves
- Amazon Prime membership, which has a reputation for remarkably fast delivery with a free 2-day shipping incentive for shoppers.
- Amazon’s built-in comparison tool which puts you against other merchants (something that could either work for or against you!).
- There is usually a monthly fee for listing your products on Amazon; referrals and other fees are charged upon making a sale and vary depending on your product category (a 15% commission for most categories).
So, make sure to check out all the fees for selling on Amazon and factor them into your margins when you consider selling on their marketplace.
When you create a store with ExpandCart, you actually get the opportunity to integrate your store with Amazon which automatically lists your products on the marketplace giant with the Sell on Amazon app.
Selling on eBay
eBay is a huge marketplace where you could both sell your products at fixed prices or auction them to the highest bidder. While Amazon focuses on the selling experience, eBay puts emphasis on the tools they make available to the sellers and the possibility of featuring their store on the eBay marketplace.
Here is what to consider before you start selling on eBay:
- 80% of the items sold on the platform are new (not secondhand) and are sold at a fixed price
- You have the chance to auction your items for sale to the highest bidder, which proves worthy when wanting to attract buyers that are looking for unique merchandise.
- You have to sort out shipping and fulfilment on your own, or resort to a third-party fulfilment specialist.
- There are listing fees per category. Despite having a fixed number of free listings per month, there are advanced listing options that you might still have to pay for.
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Conclusion:
When it comes to selling on Amazon or eBay, choosing both or either depends on the products you’re selling and the size of your sales operations.
It’s important to note that you could sell through your own store and also sell on a marketplace to get the benefits of both. You can also sell on more than one marketplace – just make sure you take your time to understand the way sales work on each platform!
That’s what many successful sellers are doing; owning their unique personal online brand while leveraging the immense exposure and size of sales coming from the traffic pouring onto the online marketplaces like Amazon or eBay.
