Looking to start buying and reselling goods for profit? Maybe you’re already making money and are looking to scale up? If you’re new to the online arbitrage game, you might be wondering “which is better: Amazon FBA or eBay?”
To start, let’s take a look at the major differences between two of the world’s biggest online marketplaces:
- eBay is one of the most venerable marketplaces on the Internet. Sellers list items, customers buy or bid on those items, and the seller handles fulfillment (storage, shipping, returns, etc.) eBay used to specialize in auctions, but fixed-price listings have become more and more common.
- Amazon FBA, or Fulfillment by Amazon, is a service where you send your goods to Amazon’s warehouses to be stored. You list the items, the end customer makes the purchase, and Amazon handles all aspects of fulfillment. Amazon FBA is different from Amazon Marketplace, which allows third-party sellers to list items, but requires them to fulfill orders themselves.
From an end buyer’s perspective, each site has its advantages. Items listed through FBA can qualify for free two-day shipping via Amazon Prime, while eBay customers may form ongoing relationships with sellers of unique products. But, what are the advantages of each platform from a seller’s perspective?
Selling through eBay requires you fulfill orders yourself. This may increase your profit margin, but you are responsible for storage and shipping. That means finding (and paying for) a place to store your goods while you wait for a sale. Whether or not that’s an issue depends on what and how much you’re selling.
Using Amazon FBA involves sending your products to the Amazon warehouse, where they are stored and fulfilled directly by Amazon. However, they must pass inspection by Amazon and are subject to certain “gating” criteria (see below).
eBay allows users to provide their own item photographs, descriptions, and listing information. While this can be time-consuming, it also gives ambitious resellers an opportunity to sell aggressively to their niche. eBay’s flexibility on listings lets you optimize, customize, and target your listings for maximum sales.
When you list products on Amazon, you’ll be using their images, descriptions, and information. Once you’ve familiarized yourself with FBA’s listing requirements, you can set your price and shipping rates and you’re done. While you have less flexibility when listing items, you also won’t spend time taking photos or writing up descriptions, and will only have to compete on price.
eBay lets you make 50 listings per calendar month for free. After that, listings are $0.30 apiece. eBay also takes a final value fee of 10% of the sale, up to a maximum of $750. There are additional fees for optional listing upgrades. eBay also offers subscription tools for high-volume sellers, which may become helpful once sales take off.
Amazon’s fee structure is a bit more complicated and variable. Amazon FBA charges fees for storing items (as low as 48 cents per cubic foot per month), as well as fees for packing and shipping, based on the item’s weight Fortunately, Amazon does offer a tool for estimating your fulfillment fee, taking much of the guesswork out of the process.
Learn more about these and other platform’s fees by checking out our Basic Fees blog post.
eBay currently takes PayPal and credit cards from buyers, which means faster turnaround for sales. However, this leaves reminders and invoices up to the seller, which can lead to more time spent on managing payments.
eBay also offers a Managed Payments service to help sellers track and organize payments from buyers in once place. Managed Payments is currently optional, but eBay is planning to transition all sellers to the program by 2021.
Amazon only uses Amazon Payments, which makes it much simpler (they collect the payment and deposit it in your account), but somewhat less flexible than eBay.
eBay is obviously the place to sell if you want to auction items, while Amazon has the advantage when it comes to fixed-price goods. However, you can still do well selling fixed-price items on eBay.
Not everything will sell equally well across each platform. eBay does better with sales of less common items and vintage items (except for used books, where Amazon still rules). Also, many loyal eBay users tend not to buy from Amazon, and vice versa.
Flexibility and Gating
Amazon’s rules and requirements for getting started are more complicated than eBay’s. Amazon also “gates” certain categories of goods for new sellers; not everyone can sell any item through Amazon FBA when first starting out. Ambitious resellers should be aware and read Amazon’s policy first.
Amazon FBA has a strict inspection policy for “new” items and will mark them as “unsellable” if they do not pass muster. This can be a barrier to incautious resellers, who may end up getting stung if they list their items without being aware of the rules.
eBay has fewer and less strict rules for getting started with reselling. This means you can get started quickly with fewer restrictions. Sellers on eBay can also set their own return policies and restocking fees.
In short, eBay is easier for resellers who want to get a fast start with fewer restrictions. Amazon FBA has more rules to follow, but the tools and services available could help you reach a larger audience.
So…Which is Better?
The truth is, there is no one-size-fits-all marketplace when it comes to reselling.
You may end up preferring Amazon FBA’s interface over eBay’s, or find the fee structure of one more appealing. If you do decide to concentrate on just one of the two, do your research. You should know the difference between their ranking and feedback systems and the category restrictions that may slow you down.
You should also know that since eBay sellers list items with their own descriptions and price points, which are not organized the way Amazon’s listings are, finding an “average” item price on eBay can be trickier. Fortunately, there are eBay communities and Amazon FBA communities to help you learn the ropes.
So which marketplace is better for your needs? For anyone sourcing multiple types of products for resale, the answer is “both!” There’s nothing stopping you from selling in both marketplaces, and both have their strengths as well as their drawbacks. Certain types of goods (especially larger, bulkier goods) may be more convenient to store off-site with Amazon FBA, while other commodities might be cheaper to sell via eBay from closer to home.
Because not all products are well-suited to all channels, it’s best to have multiple ways to resell so you can hedge your investment. Selling on both eBay and Amazon FBA means millions of eyeballs on what you have to offer. And that’s always a good thing.