eBay vs. Amazon – Part 1 – Comparison of Selling

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In previous posts (shown at the links below), I briefly talked about how one of the small businesses I have started over the years was an eBay resale business, and that I think eBay is a very effective medium for people to make extra money around the house by selling their unused belongings.

How to Start Your Own Business

Sell Your Unused Items on eBay

However, in these posts, what I did not address was the fact that internet sellers definitely have a choice for where they want to sell their items. Since I have had a significant amount of experience selling on eBay and Amazon, I figured I would devote a series of postings to seeing how eBay and Amazon stack up against each other.

 

Executive Summary

In short, my experiences have shown that overall, eBay.com is a much more profitable way to sell your items than Amazon, due to Amazon’s high fees. Additionally, Amazon has structured itself to seemingly put buyers first, instead of eBay who you can tell really makes every effort to keep sellers happy.

So, that is the overall message I am wanting to deliver to you all. Now for the more detailed look at the way Amazon and eBay work, and the cost structure for each. First, let’s take a look at eBay.com.

 

eBay.com

  • Overall structure
    • On eBay, items are listed by default in an auction format. This means that you set a minimum price, and then, depending on the number of bidders you receive, the price can go up (until the listing ends).
      • The auction format has the added advantage of introducing the human urge to buy in to the bidding process. Often, people will bid the price higher just because they “want” the item very badly.
    • eBay also offers a “Buy It Now” feature, which is a fixed price listing, for an extra fee. Generally, I prefer to buy items listed with Buy It Now and sell items in the normal auction format.
  • Listing term
    • Default listing term is 7 days. You can pay extra for a 10 day listing.
  • Pricing
    • Pricing can either be determined using the auction format or Buy It Now format (both discussed above).
    • You are allowed to have more control of shipping/handling prices that you charge as well so don’t lose money on that front.
  • What fees do you pay?
    • There are really 3 categories of fees when listing an item on eBay. See the following link for detailed information from eBay.com –  eBay.com – Fees
      • Listing fee – Charged at the time when you list your auction for your item. Charges can range from $0 to $2, depending on the value of your item.
      • Final-value fee - 9% of the sale price – Dang!!!!
      • Paypal (payment processing fee – this fee is incurred when you use Paypal.com to accept payment for your item that you sell. It is pretty much obligatory to use Paypal, since every one else does.) – 3% to $0.30 – see the following link for more details - Paypal.com – Receiving Payment Fees

 

Amazon.com

**See the link below for a summary of selling fees and format on Amazon.com

Amazon.com – Selling on Amazon

  • Overall structure
    • When selling on Amazon, you simply enter which product you want to sell, set the fixed price, record the condition, and click “Yes,” and your product is listed on Amazon.com
      • This is actually one of the best things about Amazon – the fact that it takes almost no time at all to list an item. On the other hand, with eBay, new listings can be very time consuming to create.
  • Listing term
    • Your item will be listed on Amazon until it sells, up to a 60 day maximum period.
  • Pricing
    • Prices on Amazon are fixed by the seller. This is one thing that is very tough on Amazon because if your product is not the lowest price, you will most likely not make the sale.
    • Additionally, Amazon does not allow any wiggle room when it comes to setting prices for shipping. In other words, if you sell a book on Amazon, the maximum allowable for you to charge the buyer is $4, irregardless of weight. (I guess you better forget that Priority Mail!)
    • Another pain point I have about Amazon is that it doesn’t credit you with your money from an item sale until after you actually enter the shipment tracking code in to a field. So, again, this is very good if you want to be super buyer friendly. But, not the best for pleasing sellers.
  • What fees do you pay?
    • Since payments are received directly from Amazon.com (no Paypal involved) and Amazon does not charge listing fees, there is only 1 type of fee involved with Amazon selling.
      • Closing fees
        • You will be charged $0.99 on each sale that closes, irregardless of price. This means that you MUST make at least $1 of profit on each sale in order to make it worth your while.
        • Additionally, you will be charged ~15% closing fee of the final sale price. On top of that, many of the most common categories (such as books, software, video games, and DVDs) involve ANOTHER $1.35 fee. Highway robbery if you ask me!

Selling Example

Now that I’ve walked you all through the various differences between selling items on Amazon and eBay, let’s go through an example to see how the fees compare for a hypothetical sale of a used Avatar movie DVD.

On Amazon, in order to sell your DVD, you would have to price it at $12.15 + $2.98 shipping in order to have the lowest price. Let’s now calculate what fees you would pay for selling this, and how your profit shakes out (we’ll assume that shipping costs exactly what you received from the seller):

$12.15 sale price

-$0.99 closing fee

-$0.80 additional DVD/Video closing fee

-$1.83 15% value closing fee

——————————-

= $8.53 remaining profit – you paid 29.7% of the sale price in fees

 

On eBay, the last used Avatar DVD sold for $13.99 + $3.00 shipping (can be seen using the completed listings feature). Let’s now calculate the total fees and resulting profit, assuming that shipping costs you exactly what your buyer paid you.

$13.99 sale price

-$0.50 listing fee

-$1.26 final value fee of 9% of sale price

-$0.81 Paypal fee

————————————

= $11.42 remaining profit – you paid 18.4% of the sale price in fees.

 

So, as we can see by the previous example, you end up paying more than 10% more in fees with Amazon than eBay. This is mainly due to the fixed fees that Amazon applies, whereas eBay’s fees are mostly all % sale price/list price based.

Obviously, it would be much more profitable to sell your Avatar DVD on eBay!

 

When would it be better to sell your items on Amazon?

While we have seen that in general, it is better/more profitable to sell your items on eBay, there are several times when it would be a better idea to sell your items on Amazon. These situations are summarized below:

  • When you don’t have much time to list items and just want them to be sold/moved out of the your house
    • Since Amazon’s selling listing format is much less personal, it is also much quicker to list items. Feel free to take advantage of this!
  • When you want to list item for a long time without paying any extra
    • Since Amazon offers the 60 day listing period, this can sometimes work to your advantage.
  • When your item on amazon is selling much higher
    • Sometimes, you will find that an item you are wanting to sell is going for A LOT more on Amazon than eBay. Definitely take advantage of this price parody if you spot it!
    • As a rule of thumb, I always check both Amazon and eBay’s going sale prices for a item, before committing to selling it on one site or the other.

Well, time for dinner for me! I hope this post helps you understand eBay, Amazon, and how the two compare. Please let me know if you have any questions.

To view Part 2 of this series, click the link below:

My Money Blog – eBay vs. Amazon – Part 2 – Comparison of Buying

Keep on learning!

Jacob

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Comments

  1. This is a really neat article! I instinctively sell more on ebay and buy more on amazon, but never really looked at the math behind why I would do such a thing….

    I usually hold my long listings on half.com. I assume it has the same fee structure as ebay. So unless a book is selling for more on amazon, it could be a better place to keep long listings than amazon?? But, it has the same con of not giving you much at all for shipping. Even with media mail, I feel like I get a little gipped. But, sometimes it’s just good to know you are being green and recycling the book – giving it a new happy home.

  2. Thanks for the great suggestion! I haven’t used half.com that much, but should look in to it! Thanks!

  3. I am selling on eBay for many years and
    just started selling on Amazon a month ago.

    The big problem is to list all the item I have on eBay(2000+) on Amazon,
    doing it manually was really annoying. So I just listed few items to check how it goes.

    I had few sales and now I want to export all my items
    How can I do it?

    • Hi Alex! Thanks so much for reading. I don't have any experience with exporting your items from eBay to Amazon. However, I would think that it would not be possible, as these two players are strict competitors.
      My recent post More Money and a Raise, Please!

    • hi alex. there’s no way for u to export your items from ebay to amazon. vice versa.

  4. Sav-Mor Mama says:

    Thank you for sharing what you have learned. You kept it straightforward and easy to understand! Wish you continued success!!!!

  5. What I like about Amazon is that it doesn’t force you to use their Paypal when you buy, as it is not available in my country Egypt. Which in return allow more buyers who do not have Paypal available in their countries to buy, which gives a better chance for your item to sell.

    Second I like Amazon’s affiliate program which allows you to put some kind of a classified ad or a link on your site and each click that will close with a sale, I get my commission.

    I am from Egypt and I personaly prefer Amazon.

    • Good points your bring up there Masreya. I'm curious – why is PayPal not available in those countries? Has it just not been set up yet?
      My recent post Easy Like Sunday Morning Weekly Roundup – # 2 – October 16th, 2011

  6. Thank you for the info. I have recently purchased more than need amount of cabbage patch dolls for a friend who lost hers when she was a little girl because a step burned it when she was little?? Terrible I know, so I have made it my mission to find her the perfect one. Unfortunately being new to ebay, I bid on a TON and I won a TON. Some still in boxes some cute as they can be out of boxes. Boys, Girls, preemies etc (if you are not familiar with them sorry for the details) But know I am thinking that when I find the one I will give to my friend mabye I should clean some of them up and sell them back for this novice mistake. So I appreciate your article a lot. Would you have any suggestions for me? Especially some of the rare ones that are still in the box, Im seeing they are much more expensive on ebay.

    • @ Ruth – sorry to hear about your mix up. You have to be careful on ebay in that you commit to buy the item once you bid on it. However, I most definitely would try to sell them back on eBay! Let me know if you have any specific questions!
      My recent post Easy Like Sunday Morning Weekly Recap and Roundup – # 5 – December 17th, 2011

      • The commit to buy is Not Always True. On two occasions I simply contacted the seller, admitted I made a mistake and did not want the item, and both sellers allowed me to back out of the purchase. It never hurts to ask!

  7. According to your article, it is gonna be way cheaper to sell using amazon with more expensive items than a $15 dvd, since fee is fixed, while it's a % with ebay means you would pay more money. am i right?

    • Good question Yemeni! I'd have to do the exact math to be 100% sure, but my feeling is that eBay will still be cheaper for selling higher priced items.

      Amazon has the 15% final value fee plus several other miscellaneous fees, while eBay has the 12% final value fee (9% to eBay, 3% to PayPal) plus miscellaneous fees. So, I'm thinking eBay will be cheaper.
      My recent post Green Energy Makes Green Money

      • S.White says:

        Hello all,

        This must be a Old Post that Im following: This is my Own personal Experience with eBay & eBay's NEW fee's.

        I am Currently a Power Seller On eBay- due to eBay's NEW fee's & Rules they have force me to go OUT of business and Sell elsewhere.

        If you don't completely comply to the Buyers request ( even when the Buyer is 100% wrong) Even when eBay sends you a personalized message that there is fraudulent Buyer activity on your account???….You think they would handle this–this message was sent to me 3 wks after buyer received item-( PayPal seized the money & case is still Open for 90 days??)

        This should be a no brainer- but I m still fighting this case, along with many others..

        To remain a Top Rated Seller & receive your discount of 9% you have to ship within 24 hours of payment & upload tracking #- Offer 14 return policy – money back (No questions asked- the Buyer always wins) you Can fight it out; but you will LOOSE ..Sellers Beware!!

        I've had Over 9.000 transactions on eBay in the last 2 yrs. – I am still 100% Feedback- & a Top Rated- Power Seller & losing money lots of it daily due to eBay launching their ” eBay Buyer Protection Policy”….. There are wonderful Buyers out their, but Unfortunately it's the fraudulent buyers ruining it for all, they have learned how to use the system… Every day gets worse Selling on eBay!

        Currently after Opening a Pro Store- become a Power -Top Rated Seller with the best discounts- Im still losing money- lots of it.— Due to Fraud!

        As far as fee's go: First If you Own a eBay store you pay ( either Basic 19.99, 39.99 Or 59.99) a month don't quote me on that is in that range – then you pay Listing fee's, then you have Final Value Credit Fee's then you have PayPal fee's somewhere around 3% or more & if that's not enough now you have an additional 10% fee's added onto your shipping Cost… When you do the math- Amazon is much Cheaper, less demanding..

        I loved Selling on eBay- I hope they make some changes Soon :(

        If they keep losing their US Sellers- It will just be a market now for CHINA

        • Thanks for sharing your experiences S. White! I haven't sold on eBay for a few years now, so I'm not sure what the current climate is.

          Has anyone else experienced this similar type of thing lately?
          My recent post The Pros and Cons of a Down Payment Assistance Program

  8. Freez Tilfor says:

    The Commission Fee for Amazon is lower than 15%, it's 8%.

    i did the math on 2 Avacyn, Angel of Hope cards that had recently sold on both amazon and ebay.

    The last one on ebay sold for $11 while amazon sold for $14.99, amazon will tend to have its buyers paying more for items then on ebay, where people want to save money.

    11.00+free shipping vs 14.99+free shipping
    -0.50 insertion -0.99 selling fee
    -0.99 FVF -0.50 VFC
    -0.00 ShipFVF(added almost a yr ago) -1.20 Commission Fee
    -0.33 PayPal Fee
    Total= 1.82 Total=2.69
    Profit=$9.18 Profit= $12.30

    So, you would make more on Amazon then ebay, correct? But, what if an item had a shipping amount on ebay? It would be an additional 9% on top of the shipping cost.

    Also, if you where an ebay buyer who wanted to sell a DVD at a fixed price at $13.99 the fvf would be 13%.

    So, it's your choice, but I choose Amazon. Especially when the fees will be changing by the end of the year to a SFVF being the cost to ship and the original sale price of the product but at a lower percent of 8%. (Might just be a rumor but it wouldn't surprise me if it was true.)

    • Thanks for sharing Freez. I did this analysis about 2 year ago, so they might have changed the fee structure. It's definitely true that if you can find an item selling for 50% more on Amazon, you probably will make more from the sale. However, I've found that Amazon tends to be more of a buyer's market, which prices lower. But, this probably isn't true for all items of course.
      My recent post Saving Money on Your Health Insurance

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