Dropshipping simply means selling products without holding inventory. In its place, there is a supplier who sends out the products directly to customers.
This saves money and space and is extremely popular with start-ups. But here comes the real question: which platform to sell on?
Of the many dropshipping sites out there, eBay and Amazon are truly the heavy hitters within the industry. Each of these marketplaces has some really powerful strengths that can make all the difference in how many customers you’re bringing into your storefront, how much they’ll spend, and just how smooth your business runs. There’s a reason you need to compare different marketplaces and find a better base for your dropshipping business.
In this article, we will be looking at two major platforms: eBay and Amazon. We will look at both the areas of strength and those that would need some leveraging, all for the purpose of defining which one is best for your business. Let’s get into the details and outline how using one of these will power up your business to success!
eBay – Advantages and Disadvantages
eBay Inc. is a global e-commerce powerhouse that brings together millions of buyers and sellers around the world in more than 190 markets. Since September 1995, when it was founded by Pierre Omidyar, eBay has grown into a live market where people, businesses, and even governments can buy and sell almost everything imaginable—from everyday goods to rare collectibles.
What makes eBay different is that it enables sellers to run their business without keeping an inventory. This model, with reduced overheads, will enable a more agile and scalable way of running a business. The sellers can integrate with famous Shopify dropshipping suppliers like Spocket which also allow eBay dropshipping to have an end-to-end workflow and products variation. Some of the benefits that make it outstanding are:
- Sellers can choose between auctions, where buyers bid, or “Buy It Now” options for immediate purchase at a fixed price.
- Very easy to get around in for both new and established sellers.
- eBay offers listing management tools, sales tracking, and performance analysis.
- The buyers and the sellers rate each other at the end of each transaction in order to increase their trust and reputation rating.
However, there are also some disadvantages to using eBay.
- eBay charges listing fees and takes a percentage of the final sale price.
- With millions of active users, it can be challenging to stand out.
- Fewer options for customizing listings compared to other platforms.
- eBay has strict rules that sellers must follow, which can be restrictive for some.
Amazon – Advantages and Disadvantages
Amazon Inc. is the e-commerce giant all over the world, founded in 1994 by Jeff Bezos. From an online bookstore starting point, Amazon has grown in no time to become a store for nearly everything from electronics to grocery items. Today, Amazon stands for customer satisfaction, innovative technologies, and efficient logistics—evolving finally into an industry leader.
The special thing about Amazon is that there is no inventory required for the sellers themselves and they are supposed to keep track of their stock. The key benefits of selling through Amazon include:
- Fulfillment by Amazon, FBA, whereby Amazon stores, ships products and handles customer service on behalf of the sellers thus helping them manage their businesses much more easily.
- It offers a huge customer base for sellers with millions of active users across the world.
- It operates in almost every country, hence giving the vendor access to international markets.
- It’s always investing in technologies that improve the shopping experience, including individual purchase recommendations and voice-activated shopping with Alexa.
Despite the various advantages to using Amazon, there are some challenges that exist.
- The large number of sellers on Amazon makes it challenging to stand out.
- Amazon charges various fees for listing, selling, and using FBA, which can reduce profit margins.
- Amazon has stringent rules and guidelines that sellers must follow, which can be restrictive.
- Relying heavily on Amazon’s platform can be risky if policies change or if there are disruptions in service.
- Amazon’s standardized listing format can limit how sellers present and brand their products.
A key to successful dropshipping is the right choice of platform. Here, we will compare these two industries (eBay and Amazon) to figure out which one will be the best fit for your needs and business goals.
Difference Between eBay and Amazon
It only remains in competition with eBay, another of the biggest online marketplaces, distinguished by varied features and policies that best suit different categories of sellers and buyers. Obviously, with that kind of user base and its Prime membership program, the reach advantage Amazon holds is huge over its customer base. To counter this, more lenient policies and lower fees in eBay make it an especially good platform for smaller sellers or any looking for flexibility.
Reach and Audience
Amazon has more users than eBay, with over 300 million active users to the latter’s 132 million. The prime membership of Amazon, also having more than 200 million users, enhances loyalty and spending of their customers. For any seller wanting to sell in a large and diversified market, a bigger audience such as that offered by Amazon is definitely more appropriate. Though eBay has a large user base, it’s generally concentrated in areas like the US and the UK.
Policies
Amazon policies are strict. Sellers are required to deal with returns and defects, identify themselves on all information concerning the product, and remove supplier details from the packaging. They cannot buy goods from other retailers for shipment to customers; all Amazon seller terms need to be adhered to. The policies on eBay are much more lenient. Sellers can source directly from wholesalers, but they have to deal with delivery that is on time and process refunds and listing fees that have to be paid off before sales. In general, Amazon’s policies tend to tilt toward customer satisfaction, while eBay wants to create a fair marketplace.
Costs and Fees
Selling on eBay is relatively cheap compared to Amazon. eBay charges $0.35 per listing beyond the 250 free listings per month and a final value fee of 12.55% on sales up to $7,500. This differs from Amazon, which charges a subscription fee of $39.99 per month for professional sellers and a referral fee of about 15%, with extra fees for using Fulfillment by Amazon. This makes selling on the site cheaper, especially for those who do not move as much volume.
Ease of Use
Setting up a dropshipping business on eBay is easier and much faster. With the user-friendly interface, listing products and managing sales would not be very hard for a newbie. In contrast, Amazon has more comprehensive tools and much deeper analytics, but it’s harder to set up and has pretty strict rules. While Amazon’s seller tools are better in most ways, it’s hard to beat the simplicity of eBay for new sellers.
Product Categories and Restrictions
eBay has broader reach with fewer restrictions to listing, thereby allowing most sellers to sell their products. The restricted items include alcohol, firearms, hazardous materials, and live animals. On the other hand, Amazon has more rigid rules and many gated categories that require approval, which include health and beauty, grocery, and automotive. Amazon also restricts the sale of alcohol, fine art, and hazardous materials. Thus, eBay becomes more flexible for listing diverse products, while Amazon is focused on maintaining high standards and safety.
Fulfillment and Shipping
eBay sellers manage their own shipping or use third-party fulfillment services, which can vary in reliability and speed. Amazon offers Fulfillment by Amazon (FBA), where Amazon handles storage, packing, shipping, and customer service. FBA provides faster and more reliable shipping, including Prime two-day delivery, but comes with higher fees. This makes Amazon’s fulfillment more streamlined and efficient, while eBay offers more flexibility but less consistency.
Customer Support
Amazon offers 24/7 customer support via phone, chat, and email, and helps FBA sellers. This means customers can get help anytime. eBay provides support through its help center and community forums, where users can help each other. Amazon’s support is more extensive and easier to access, making it more reliable for customers.
Factors to Consider When Choosing eBay vs Amazon
To choose the right platform for dropshipping can be challenging, but focusing on key factors can simplify the decision. Here are the main points to consider when deciding between eBay and Amazon:
- Selling Fees: Compare fees to ensure good profit margins.
- Registration Process: Choose a platform with an easy registration process.
- Shipping Methods: Decide if you want to handle shipping or use a fulfillment service.
- Product Categories: Check if your products fit within the platform’s allowed categories.
- Dropshipping Policy: Ensure the platform’s policies align with your business model.
- Competition: Find a platform with less competition for your products.
- Customer Trust: Choose a platform that customers trust.
- Scalability and Growth: Consider the platform’s potential for long-term growth
Also consider if the platform suits your product type, where your target audience shops, and all associated costs. To maximize reach, you might also consider a hybrid approach by selling on both platforms.
Conclusion
Choosing between eBay and Amazon for dropshipping depends on your business needs and goals. eBay offers flexibility, lower fees, and ease of use, making it ideal for smaller sellers and niche products. Amazon provides a vast customer base, advanced fulfillment options, and strong customer trust, which can be beneficial for larger-scale operations. By considering factors like fees, shipping methods, product categories, and competition, you can determine which platform aligns best with your business strategy.
