eBay v Amazon Seller Fees: A comparison

eBay v Amazon Seller Fees: A comparison
The transformation in the supply chain that allows selling online has brought a total change in consumer behaviour.

eBay seller fees mean something different to those who use the platform in its original guise, to sell unwanted items in a convenient manner, to those who now see eBay as one of, if not their primary, marketplace. The fees can appear high but as eBay say in their own marketing information “you receive access to a massive marketplace to ensure a fair price for your goods”.

eBay has morphed into its present state via a heavy investment in understanding how the online marketplace would change over time as the benefit of shopping, whether for an item that has been considered and price is the only driver, or just browsing generally would become more popular. This is clearly to the detriment of the “high street” where traditional retailers are suffering. Almost daily the larger chain stores are announcing closures, cutbacks and methods of competing by entering the online marketplace themselves.

eBay is still a market for selling used goods and that is signified by the fact that the first twenty items listed for sale are free. eBay has, in that regard, become a service provider, while for “commercial enterprises”, the fees begin early. After twenty items it costs £0.35 per listing which is entirely reasonable but soon extra costs start to kick in. Sales, as opposed to listings are where the costs really start to mount.

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cost to sell on eBay
The cost to sell on eBay is where the comparison to traditional retail outlets must take place. eBay takes 10% of the final sales price and (generously) operate a final value cap which limits fees per item to £250. eBay is also wise to ways sellers use to try to “get around” their fee structure. They will charge a seller the fees as if the item was sold on their site if the see any email addresses exchanged or any other attempt to circumvent the platform. Of course, the seller can argue but while any dispute is resolved the account is suspended risking immediate sales and customer goodwill.

eBay is constantly updating its practices for sellers and many believe that it is leaning too heavily towards protecting the customer.

eBay charges for selling are a significant cost to retailers who choose this method of selling and eBay itself fully appreciates that it “got in first” but must always protect its position as the market matures but remains far from saturated as specialist platforms start to grow. These are where a consumer who knows the product he desires, whether that is a kettle or a garden hose looks first at sites where several sellers congregate to sell particular ranges of goods.

cost to sell on Amazon
The cost to sell on Amazon is a different model to eBay. Amazon started life as an online bookshop so they are aware of the “specialist site”. They charge a $0.99 per item fee which is expensive compared to eBay but becoming a “Pro-Merchant” at $39.99 per month excludes paying the per item fee, so it is a simple calculation to work out value for money.

eBay is at pains to not necessarily advertise its model which leans heavily towards the retailers, still encouraging individuals to sell unwanted items on its platform. Amazon makes no secret of its roots in the retail space and has grown into both a retail and media giant with a tech firm skilfully added.

Amazon seller fees on a per item basis are comparable to eBay, despite being clouded in a slightly complicated calculator.

The Amazon seller fees calculator allots different prices to different sectors but the “referral fee” is what varies most. For example, a sale in the DIY sector of an item valued by the seller at $35 will be offered to the customer at $39. Once sold the retailer will receive $34.32. Amazon takes a referral fee of $ 4.68. If that $39 item is in the kitchen section, the referral fee is $5.85

Again, a comparison with eBay needs to take place given the variable scale of Amazon’s fees which appear to be more based within a retailer environment while eBay still clings to its roots in the “second-hand goods” market making its structure easier to follow.

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About Alan Hill

Alan has been involved in the FX market for more than 25 years and brings a wealth of experience to his content. His knowledge has been gained while trading through some of the most volatile periods of recent history. His commentary relies on an understanding of past events and how they will affect future market performance.”