Amazon and eBay are two of the most popular online marketplaces in existence today.
Most anything can be bought from them, which makes them very appealing to consumers.
And this prospect may also seem mutually beneficial for e-commerce store owners as well, since their products gain more exposure while the marketplace gets to expand its product range without the hassle of also expanding its inventory.
But if you look closer, you’ll find that the above still holds true, but some cons also begin to appear that could definitely impact your e-commerce business.
So is it worth it to expand into selling your products on these marketplaces?
That depends on your business: some e-commerce businesses benefit from such a course, and others do not. Factors to consider include the products you sell, the amount of competition you deal with in that category, and the fees and restrictions of the marketplace you’ll be using.
We’ll talk about a few of the pros and cons that can apply in most general circumstances to help you make the best decision for your e-commerce business.
PROS OF SELLING ON ONLINE MARKETPLACES
Higher Traffic, More Sales
Online markets such as Amazon and eBay have a massive online presence, with Amazon drawing roughly 184 million visitors a month and eBay hosting about 164 million buyers.
That kind of traffic can be extremely beneficial to an e-commerce business, because the higher the traffic, the better the conversion rates get!
Drawing New Customers
Amazon and eBay are both great places for people to find your products, which they may not have found otherwise. And once they do find you here, you have a great chance to win some repeat business!
With good customer service and fulfillment, you can grab business that would’ve otherwise gone to your competitors on this market. And this is especially potent with products that will need to be replenished, like hobby supplies, fishing gear, etc.
Consumers Prefer The Convenience of Online Marketplaces
People are drawn to online marketplaces for the same reason they’re drawn to shopping malls and farmer’s markets: the all-in-one package is something many people enjoy and prefer. Online marketplaces also come with the extra-added convenience of a single-stream, seamless buying experience.
CONS OF ONLINE MARKETPLACES
One of the things about selling in an online marketplace that could end up costing you are the marketplace fees. They’re typically deducted as a certain percentage of each sale, which varies from category to category.
Having a good sense about your margins and the marketplace’s fee structure can keep you from making a costly mistake or getting in over your head.
One crucial thing to remember about online marketplaces is that they exist to help themselves.
The focus is on the products in their case, not the sellers, so to that end, they could limit the amount of control you have over things on your end, such as communicating with customers, branding your presence, or even what you can and cannot sell. In addition, there’s the possibility that they could completely bypass third-party sellers and stock up on the popular good themselves.
It can be very hard to keep your inventory in sync with the marketplace without lots of manual work on your end, which could lead to consumer frustration, something no-one wants.
While considering these pros and cons, it would also be wise to think about exactly which online marketplace you’ll be using.
Two of the biggest and most popular are Amazon and eBay, and while it may initially seem like a great idea to just hop straight into using both, the reality is that both have their own set of advantages and disadvantages.
You ultimately need to consider which one would be best for your e-commerce business’ needs.
SELLING ON AMAZON
Amazon is a great option for retailers, seeing as that’s what it specializes in, and offers tons of tools to make consumer shopping easy and convenient!
FACTORS TO CONSIDER WHEN SELLING ON AMAZON:
Amazon has their “Fulfillment By Amazon” program, which allows Amazon to handle the shipping and fulfillment of your products by sending them inventory in bulk.
Amazon offers an “Amazon Prime Membership,” which grants consumers free 2-day shipping and reputable service and fulfillment.
Amazon has built in comparison shopping, pitting you against your competition, which can be beneficial or do your business harm, depending on your margins
Monthly fees are another thing to take into consideration; monthly fees for listing your products and referral fees are also charged when a sale is made, with the exact amount varying by category, averaging at about 15%
SELLING ON eBAY
eBay has their infamous auction system, allowing you to sell your goods to the highest bidder or at a fixed price!
Where Amazon’s focus is on the shopping experience, eBay focuses more on letting your brand be featured.
FACTORS TO CONSIDER WHEN SELLING ON eBAY
While eBay’s auctioning system does allow you to sell things to the highest bidder (which does attract a lot of customers), you can also put things up for a fixed price. In fact, about 86% of eBay’s merchandise volume is from items sold in that way.
Shipping and fulfillment are something you’ll have to figure out for yourself, whether through a third party or simply on your own.
There is an insertion fee per listing per category, but some seller account types get a certain number of free listings per month.
Making the decision about what online marketplace to sell to really relies on a lot of factors, the primary one being the size and scale of your business. You also don’t have to limit yourself to either JUST selling on your e-commerce site or JUST through an online marketplace. You can totally take advantage of and benefit from both, but the wisest thing to do is to calculate first and figure out the best move for your business.
Gapstow Design specializes in the listing and managing of your e-commerce business projects, including Amazon and eBay stores. We’d love to help and make your e-commerce business as effective as it can possibly be.
Click here to see how we can meet your needs and take your business’ effectiveness to the next level!