Online Selling: eBay vs. Amazon, Part 2

In this post, I will expand upon the things discussed in the previous post as well as make a few new points:

1. Listing an Item
One thing I didn't fully address in the previous post is that eBay allows you to have many different items in the same listing while Amazon does not. This is because eBay allows the seller to specialize the listing more than Amazon does. The advantage of this feature is that if you have a collection of something (i.e. baseball cards or sonic the hedgehog games) you could sell them as a whole set on eBay and will probably get a lot more money and save a lot more time than you would if you had tried to sell them individually on Amazon. However, while selling items as a set works well for collections or if you need to sell your items quickly, it is often not the best strategy. If you have a set of items which are not closely related (i.e. a random collection of video games or movies) you will probably end up losing a lot of money if you try to sell the set in bulk (as a buyer this is a good way to save a lot of money). Selling a set of 20 random video games individually on Amazon will probably take less than a week (items generally sell faster on Amazon than eBay) and will probably earn you 10-15% more as a whole. As a rule, unless you are selling something as a collection or need the money very fast, Amazon is definitely the way to go.

2. Fees
Amazon and eBay have different fee structures which has many important implications for sellers. On eBay you have to pay to list every item regardless of whether it sells or not. Amazon does not charge you to list items, but has a higher commission. Assuming the item sells on eBay, the costs associated with both sites come out to about the same amount, but if it goes unsold, you risk losing money. What this means is that when selling on eBay, you have to be conscious about the item you are selling and the price you are asking. If you ask for an unrealistically high starting price and no one bids, you will take a hit. The same goes for if you are unsatisfied with the bids and remove the listing before the item sells (On eBay you are free to remove the listing a day before the auction ends regardless of how many bids there are. You can remove the item even later if you have a valid excuse such as lost inventory). On Amazon, you are free to charge any price you want and keep the item up without paying a cent. Because prices of items vary more on eBay, and because you don't have a solid benchmark as to how to price your items (on Amazon you just price it 1 cent below the competition), you generally have to do some research on the price of an item when selling on eBay to ensure that the starting price is not too high and that you will earn a sufficient profit on the item. Amazon makes it easier to list and price items and is also less risky. Generally, if you know the price of an item and are fairly confident that there is a demand for it, eBay is the way to go. If you are less sure about the price of an item or don't want to endure the cost of the item not selling, use Amazon.

3. Ratings
The rating systems on the two sites are very different. On eBay buyers give feedback on almost every transaction without the seller having to ask most of the time. The feedback is positive for the most part and if you as a seller mess up, it is generally not difficult to convince the buyer not to give you negative feedback. As a result, sellers on eBay have a great deal of feedback and once a certain feedback level has been reached (i.e. 500 ratings), it is easy to get a good idea of how reliable a seller is. On Amazon, however, it is much, much, rarer to get feedback. Even when I included a letter with every item, thanking the buyer and asking them to leave feedback, I only received feedback on about 1/10 items. If I had not done this, the number would have been more like 1/20. The reason for this is that on eBay giving feedback is very simple, while on Amazon, it is more confusing. Because it is easy to rack up a very high feedback score on eBay, it is easy to maintain a good reputation even if you receive a few pieces of negative feedback. This is generally beneficial to sellers and makes it so that those who sell a lot of items have a solid advantage over those who do not. Amazon on the other hand has a feedback system which has the potential to hurt sellers. Because feedback is so rare on Amazon, one piece of negative feedback can essentially destroy a seller's credibility, possibly bringing their satisfaction rating to less than 60%, which makes it extremely difficult to sell another item. One friend of mine had to shut down his account because of two pieces of negative feedback, even though he had sold hundreds of items without a complaint! Feedback on Amazon is also less predictable. I remember one case where a lady gave me negative feedback because she found the book she ordered to be boring (how that's my fault I'll never know). The implications of this are that as a seller on Amazon you have to beg the buyers to give you feedback and make sure that transactions go as smoothly as possible. eBay gives the seller a lot more leeway. As long as you keep your selling record on Amazon clean you should be fine, but if something goes wrong, you could be in a lot of trouble.