More than two decades back, if you wanted something from a store more than a mile away, the only option was to drive up there. If you wanted to purchase a pair of trousers, the only option was to go to the store and try them before purchasing them.
All of this changed with the evolution of shopping from brick-and-mortar stores to online spaces. More people today have started shifting to shopping online rather than visiting a brick-and-mortar store. A study shows that in 2022, there were more than 214.7 million online shoppers in the US spending over $4500 per person on average.
The average amount spent per shopper per visit in 2022 was $2.39. Shoppers love convenience. Two primary reasons consumers prefer shopping online are direct home delivery and a 24x7 shopping experience.
Gone are the days when the only choice to purchase something was to head out of the house. Most marketplaces have websites and shopping apps from which consumers can buy products.
Online shopping has made it convenient for shoppers to purchase anything from clothing to automobiles to electronics, skincare, and even grocery. Not just that, online shopping has enabled consumers to purchase directly from different online retailers (business to consumer) and also directly sell to other consumers (consumer to consumer) on sites like Etsy and eBay.
While the online market globally hit close to 4 trillion in 2020, the US market alone is expected to grow to 300 million shoppers in 2023.
For sellers, the biggest challenge is identifying which platform is the best for selling their products. There are two primary reasons you might be reading this article today.
Today we dive deep into understanding two eCommerce giants in the US - Amazon and eBay. Both marketplaces have been around for more than two decades selling products in a wide range of categories and catering to consumers worldwide.
Today we will understand everything about both these global marketplaces, what they offer, their pricing for sellers, the pros and cons of trading on these platforms, and lastly, which marketplace is the best for you.
Let's begin!
What started as an online bookstore named Cadabra in a tiny garage in Bellevue, Washington, in 1994, today sells products from over 25000 different categories, from books to electronics to clothing and more, under the Amazon brand.
Jeff Bezos's Amazon is today the world's largest marketplace, with more than 300 million active customer accounts, and caters to 180 countries globally.
Since its inception in 1994, the company went public within three years and today. In 2021, Amazon's net profit was $469.82 billion. And as of 2022, the brand's worth was $705.65 million.
In 2019, Amazon had approximately 1.1 million active sellers in the United States alone. Today, Amazon has tons of resources to help eCommerce sellers boost their revenue on the platform through workshops, events, and more.
Most sellers do not even have to set up a website to host their products. Amazon has over 300 million users and caters to 180 countries worldwide, and most sellers can ship their products to most of these countries.
If you already have an eCommerce website or a Shopify store, hosting your product on Amazon can help add another income stream to your online business. Also, hosting your product on Amazon automatically gives Amazon's regular customers a sense of trust in the products sold on the website.
If you are wondering if selling on Amazon is profitable, More than 65% of sellers on Amazon made profits within the first year of their operation. Amazon has something known as the Prime Day sale (usually two days), where consumers purchase various products at massive discounts. In 2020, Amazon's vendors made more than $3 billion in sales on Prime Day.
Amazon's convenient shipping and return policies have made it easier for both consumers and sellers. No wonder Amazon takes a major piece of the pie when it comes down to market share. Amazon owns almost 40% of the total market share, which is way above Walmart (6.3%) - the second largest marketplace in the USA.
Based on a research conducted in June 2022, Amazon Prime users as per their age group are as follows.
Most of Amazon's consumers make at least $100,000 annually and are 45 - 54 years married women. However, Amazon's target audience is still much more extensive than that, as it caters to a wide range of people from different countries.
The following is a list of some of the most popular products sold on Amazon:
If you are wondering if you can sell anything under the sun on Amazon, you are wrong! Amazon prohibits sellers from selling a list of specific products on the platform. Vendors are allowed to sell only new products in most cases on Amazon. Also, except for wine, all alcoholic drinks are prohibited on Amazon.
But how is Amazon different from eBay? Let's find out!
Founded by Pierre Omidyar, what started as an auction website in 1995, is today America's fourth-largest online marketplace.
Did you know? eBay was initially called 'Auction Web.' Only in 1997, after Omidyar decided to turn his hobby into a full-time business, Auction Web became what is popularly known today as eBay. As of June 2022, eBay had about 135 million active buyers globally.
As of September 30, 2022, eBay's net income for twelve months was $28 million. Today eBay ships to 66 different countries globally.
While eBay generally started as a platform to sell used goods, now about 80% of goods sold on eBay are new. eBay has a total of 1.7 billion listings, of which nearly 28% of sellers are based in the USA.
eBay sellers, on average, earn $35,000 per year, while some top sellers make about $70,000. Most of the seller's earnings depend on how much they manage to sell on eBay and any additional expenses sellers may incur, like shipping costs.
Some of the products sold on eBay include:
However, just like Amazon, eBay too has a list of prohibited items sellers aren't allowed to sell on the platform. This list includes firearms, hazardous items, prescription drugs, lock-picking devices, stolen property, and more.
eBay is popular among men mainly because of products sold on the platform, like electronic devices, automobile parts, woodworking accessories, and more. These items are some of the best-selling things among men.
eBay's audience consists of 62% men and 38% female. The age group least likely to purchase from eBay is 65+ years. At the same time, their largest audience is 18 to 24 years (Gen Z).
Now that we've got an overview of both Amazon and eBay, it is time to understand the different plans both platforms offer to sellers.
Amazon and eBay both have various plans that sellers can choose from. Both platforms have plans suited for different seller needs. Let's understand the plans of each of these brands individually.
eBay primarily offers two different plans. eBay allows individuals to set up a personal account to sell their products. This plan doesn't require the seller to have a registered business and is excellent for people who want to sell one-off items or for those who want to understand how the platform works before committing to it.
It's that easy! eBay's Individual Seller's Account doesn't require you to pay monthly fees like the Business Account plan. On the other hand, the Business Account plan is for businesses with extensive inventories. Once you set up your business account on eBay, you can further customize it according to your brand's branding board.
Steps to set up a Business Account on eBay
Step 1: Choose your subscription on the Store Subscription page.
Step 2: Subscribe to an eBay store you like and click Select and Review.
Step 3: Choose your subscription
Step 4: Submit your order and purchase the subscription.
Step 5: Name your store and create your product listing
Step 6: Start Selling!
eBay has different plans for Business Account users catering to the type of business you are running. Following are the four different plans eBay offers businesses.
eBay charges a monthly/ yearly subscription fee for the different plans, ranging from $21.95 to $2999.95.
Amazon, just like eBay, has allowed sellers to set up an Individual Account and a Professional Account. Each plan is well suited for different user requirements. Let's discuss each of these below.
Amazon's Individual Account
This account is well-suited for new sellers or sellers who want to understand how Amazon works before committing to a professional account.
Individual account holders are eligible for fulfillment services and basic selling tools. However, they do not have the option to run paid advertisements on Amazon.
Amazon's Professional Account
Amazon has designed this account for businesses of different sizes. Business account holders are eligible for Fulfillment by Amazon services and have access to run paid advertisements.
Business account holders have access to more business tools than Individual Account owners, like creating bulk listings, having their products featured in the Featured Offer category, and selling restricted items like Fine Art, Jewelry, and more.
Voila! Now that you've understood how to set up shop on Amazon, moving forward, we will discuss the fees involved in selling on both platforms.
Remember! Whether you sell on Amazon or eBay, ensure you optimize your product listing with high-quality product images, clear product descriptions, and image and product titles optimized for SEO. Use tools like DoMyShoot to optimize your product photographs for higher conversion.
eBay and Amazon both come with their own set of advantages and disadvantages. Following we discuss the pros and cons of setting up shop on each of these platforms.
There are various factors sellers need to consider when listing their product on either Amazon or eBay out of which, two factors are most important - the purpose of your business and reaching out to your target audience. Choosing any one (or both) platforms should help you minimize your cost and maximize your profits in the long run.
Each platform as discussed above provides sellers an opportunity to reach out to a large audience base with minimum effort. However, each of them also come with their own set of guidelines and pricing.
Finally, regardless of the platform you choose, ensure that your product listing is well optimized with a clear product description, titles optimized for SEO and finally, high-quality product images using applications like DoMyShoot.
DoMyShoot has 1000+ product image backgrounds to choose from. Furthermore, DoMyShoot helps you optimize your image for eBay and Amazon according to the platform's guidelines without your team having to worry about getting your images rejected.
Request DoMyShoot for a demo today!
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