Amazon vs eBay

Amazon: Amazon has a fee structure which is even more complex than eBay. The company offers sellers two options: they can list either as individuals, or as professionals. To customers, Amazon charges $0.99 per item to list along with a referral fee ranging from 6 percent -45 percent depending on the selling type of the item. In addition, there is a variable closing fee that is not variable at all for BMDV items (books, media, DVD, and video), at a fixed $1.35 per item. Other products incur a variable closing fee calculated by the weight of the item.

Sellers can list their items in 20-30 categories (depending on whether they sell as individuals or as professionals) and Amazon has set and collected shipping rates for BMDV sellersThese fixed shipping rates are perfect for consumers who know that the total price can be easily determined when buying BMDV goods on Amazon without looking for the shipping rates of the individual sellers.

Amazon allows those products which are already listed on the site to list their product simply by entering the UPC or SKU number of the item. This process reduces the time that a seller needs to prepare a listing, as Amazon employees have already inputted the relevant information. Periodic bank transfers to the seller’s account complete the payment and sellers are secured by Amazon’s Fraud Security program.

Amazon has a few perks over eBay. The platform does a very good job , for example, of making a customer believe they are purchasing directly from Amazon.Seller’s products are listed alongside Amazon’s, transactions can be made with “1-click buy” and, unlike eBay and PayPal, purchasers can complete their payment without leaving the Amazon site. With Amazon’s Fulfillment, a seller can even store and ship their items directly from the warehouses of Amazon.

eBay: In recent years , the business that many, many people used a decade ago has fallen off favor a bit. Today’s eBay, however, has bought up quite a few companies since it first opened in 1995, including PayPal, Kijiji, and StubHub, and as of the first quarter of 2019 had 180 million active customers.

How does eBay make money, then? PayPal is first, and most importantly. In 2017, PayPal got spun off eBay. The money transfer / payment website makes a huge profit for eBay and accounts for almost half of the company ‘s revenue. PayPal fees can easily be sliced into the margins of a seller with a 2.9 per cent + $0.30 charge for each sale.

Yet let’s concentrate on the eBay portion which is comparable to Amazon — the Marketplace. Back in its heyday, eBay Marketplace would charge users a fee for insertion based on the starting bid of the item, and a final value fee when the item was sold. Every seller on eBay today gets a series of free listings. Unfortunately eBay continues to charge a final value fee. The final value fee calculations have been simplified, however, and eBay is charging a flat final value fee of 10 per cent of the selling price these days.

For power sellers, eBay offers subscription packages that give sellers a number of free listings for a monthly fee, a lower insertion fee for sellers going over their allotment, and a less-simplified but lower final value fee range.

Sellers can choose to update their listings (better placement in the search results, more photos, etc.) or list their products at a fixed price, along with the Marketplace. The fixed price listings are subject to the same fees as the listings for auctions.

 A seller may prefer using eBay to customize and customize their listings. With the option to post catchy full-color advertisements within a listing, it may be more enticing and more likely to result in a sale than neutral listings from Amazon. In an effort to make sellers more efficient, eBay has started a Valet Service that allows sellers to have their items listed and sold by eBay employees.

https://www.investopedia.com/articles/investing/052615/ebay-vs-amazon-business-model.asp

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