Selling online: Ebay vs Amazon

Advantages of eBay...

On top of the general benefits of marketplaces mentioned above, eBay
has some specific advantages worth highlighting:

  • Branding. EBay offers multiple opportunities to
    create a branded presence including HTML listings and eBay shops.
  • Feedback. EBay‟s famous feedback system provides a
    trading history for every member, acting to reassure customers that they
    are dealing with a reputable business.
  • Payment protection. For products purchased via
    PayPal, consumers and retailers are both covered for up to £3,250 per
    year (some conditions naturally apply).
  • Disposal of distressed stock. Whilst a good
    marketplace for just about any product, eBay is particularly good for
    disposing of distressed stock and gets far higher prices than
    traditional liquidation channels.

...and disadvantages

  • Low prices. EBay is the place where buyers go to
    find bargains. Subsequently, there is fierce competition in the
    marketplace and prices there tend to be lower than on the high street,
    or even on the wider internet. This has lead to accusations that eBay
    drives down prices and devalues brands. Many sellers on eBay are sole
    traders with low fixed costs and no requirement to charge VAT on their
  • Fraud. Unfortunately the very openness, ubiquity
    and ease-of-use of the eBay system make it a magnet for fraudsters of
    all types. This takes several forms including identity theft, items not
    as described and products not arriving at all.
  • Poor practices. Most sellers provide an excellent
    level of service but as in any organisation there are some rotten eggs.
  • Fees. Some sellers complain about the high level of
    fees. At 8% to 10% of the sale value of an item, eBay compares very
    favourably with other forms of online marketing.
  • Time. Answering buyer questions and providing
    feedback can make selling on eBay time consuming.

Advantages of Amazon...

  • Easy to list. As Amazon has its own catalogue,
    listing products is trivial. Products which are not already in the
    catalogue can be added as long as they have an EAN or UPC number (a
    barcode, basically).
  • A-to-Z guarantee. Amazon guarantees all marketplace
    transactions so consumers can buy with complete confidence.
  • Chargeback protection. Payments
    are managed by Amazon Payments, so sellers are protected from
    fraud-related credit card chargebacks. Sellers still bear responsibility
    for chargebacks related to their service.

....and disadvantages

  • Painfully high fees. Whilst Amazon does not charge
    to list items, it adds a hefty sales commission of 15% (+ VAT) for most
    items. However, unlike eBay, which separates marketplace and transaction
    fees, Amazon‟s fee includes transaction processing.
  • Lack of branding opportunities. Unlike eBay, there
    are very limited branding opportunities available on Amazon for standard
  • Strict service levels. Marketplace sellers must
    adhere to Amazon‟s performance level policies which relate to refunds,
    shipping times and feedback. If a seller fails to meet certain criteria,
    their account can be suspended.