Amazon vs. eBay

If e-commerce before the epidemic was like "a hundred flowers blooming", then "blooming life" clearly condenses the prosperity of the e-commerce market in the post epidemic era.

But to this day, eBay and Amazon are more like one brand, with a presence in the global market and a common understanding among consumers.How should sellers who will impact cross-border e-commerce in 2022 choose between Amazon and eBay?

Consumer trust

The launch of Amazon and eBay was only over a year ago, but when it comes to consumer trust, Amazon often puts pressure on eBay. Amazon's emphasis on consumers is also reflected in the company's vision, mission, and values. The latest survey shows that 73% of American consumers believe that Amazon is a very suitable online platform for shopping. Amazon's "A-Z after-sales" ensures that consumers can receive a full refund in case of dissatisfaction with the product. (Refunds for some categories of products require deduction of shipping costs)

In contrast, eBay's policies are more complex and winding when it comes to returns and refunds. Sellers can even refuse consumers' return and exchange requests, and even set the listing to "no return" when the product is launched. The seemingly "biased" approach towards the seller may actually have extremely adverse effects. Consumers may feel that they are engaging in "blind" consumption and lack equal means of negotiation when disputes arise, which cannot provide them with a sense of security, which is also a major blow to the platform.

Amazon is clearly doing better at this point.

Transportation and distribution

EBay sellers can only choose self delivery or entrust third-party logistics for order delivery, while Amazon has more, FBA, FBM (seller self delivery) and third-party logistics. What truly sets eBay apart from Amazon is FBA Logistics, which solves the most challenging storage, sorting, and "last mile" delivery issues for most international sellers.

According to the transaction theory, the effort and financial resources required to choose FBA delivery are far less than those of third-party or self shipping. However, after all, FBA is Amazon's leading logistics service, and policy fluctuations have also become influential factors that shake sellers' decisions.

Operating expenses

Generally speaking, eBay charges sellers lower operating fees than Amazon. EBay will charge sellers a listing fee, also known as the Insertion Fee. Sellers can receive 50 free quotas per month. In addition, transaction commission. Once the product is sold, eBay will charge a certain proportion of fees based on the final transaction price of the product. Additionally, payment processing fees. EBay requires sellers to use its payment system, but this fee is included in the transaction amount.

There are also optional listing upgrade fees available. When sellers want to build a prominent listing, they can choose to add bold font, add subtitles, set the lowest price for the product, and other functions accordingly. eBay also provides price calculators specifically for sellers.

As for Amazon, the calculation method of fees depends on the order fulfillment method selected by the seller: FBA or FBM. FBM sellers need to pay Amazon commission fees and order transaction fees in Amazon sales fees, and FBA sellers also need to pay. In addition to sales expenses, FBA sellers also need to pay Amazon performance fees, which will be calculated based on the specific weight or packaging size of the ordered product.  

However, these are not all. Regardless of the performance method used, all Amazon sellers must pay the following fees:

1. Single item or subscription fees. Amazon sellers can choose between two identities for sales: personal or professional. The former requires Amazon to pay $0.99 per order, while the latter requires a professional seller "identity fee" of $39.99 per month.

2. Refund management fee. This fee will only be incurred during a refund, and the refund management fee is charged at a one-time rate of $5 or 20% of the refund fee, whichever is lower.

Membership system

Prime membership, a subscription product that appears to only benefit consumers, is like Amazon's return policy and is one of Amazon's ties to maintain consumers. After subscribing to Prime members, consumers are more willing to choose Amazon for shopping due to "cost back" considerations. Amazon not only provides fast delivery and specific product package shipping services for members, but also offers significant discounts for Prime members during shopping festivals such as Black Friday and Prime Day. Amazon has over 112 million Prime members in the US market alone (with over 150 million global Prime members), and the platform's proactive gesture of goodwill towards consumers has earned sellers a lot of goodwill and exposure.

From a competitive perspective, eBay clearly lags behind Amazon in this area.

Since its launch in 1995, eBay has been playing a purely platform role. Amazon, on the other hand, is not the same. In addition to providing virtual stores for third-party sellers, Amazon's self operation, which emerged as the times require, is also one of the sales trumps that Amazon is very capable of playing. Unlike Amazon, products on the eBay platform have no substantial cost-effectiveness. From new to second-hand products, eBay sellers can freely list various types of products, and the platform will not interfere too much with pricing rights. Auction is one of the traditions that eBay has been using to this day, and competitiveness is more like the willingness of both buyers and sellers to go both ways.

This is also one of the important reasons why most consumers choose to shop on Amazon, with 66% of consumers prioritizing using Amazon for search when searching for new products.

Both platforms have obvious advantages and disadvantages, audience, and policy direction. Sellers need to consider their own situation and choose the best platform to invest.