Coming from Online retailing Amazon vs eBay. Selling on Amazon or selling on eBay? Which is the best option for online vendors (Part 1)

• Fulfillment by Amazon:

Since the beginning, Amazon invested heavily on automated fulfillment and distribution centers. This is one of the main reasons eBay has been able to expand faster (geographically) than Amazon. eBay is a 100% online business while Amazon has to invest time and resources to build its fulfillment centers. Anyway, coming back to the point of view of an online vendor this is a very important difference between the two platforms: Amazon offers the possibility to outsource the fulfillment (storing, picking, packing and shipping) while eBay doesn’t. Amazon calls this service “Fulfillment by Amazon FBA”

• Return policy / Guarantee:

This is one of the most important differences between the two platforms: Amazon has a full guarantee designed to protect the buyer while eBay does not. This might not seem too important but it is on the long run, because it’s a way to autoselect the kind of buyers and sellers you want to have in your marketplace. Amazon’s guarantee is the “A-to-Z Guarantee protection”.
The guarantee obliges any seller to refund or resend the item to the buyer in the event of a claim. This is designed to offer confidence to buyers so they know that they anything they buy on Amazon or from an Amazon third party seller will be as described. Sellers that don’t comply with Amazon’s minimum ratios of client service, by failing consistently to refund/resend items to buyers eventually will not be allowed to sell on Amazon. This means that only good quality service sellers will be allowed to remain selling on Amazon. What Amazon is doing with this is very clear: It’s eliminating one of the most important reasons that kept buyers from buying online, which is fraud/forgery. eBay does not function like this at all, eBay is not responsible of what the seller does or sells. This is why there have been so many claims of false luxury goods of the most prestigious brands being sold on eBay but the problem continues. The way buyers can penalize bad sellers in eBay is through reputation (giving a bad feedback) or through eBay’s Resolution Center which depending on the case and the allegations, can take some time.

All this explanation of the way each platform tries to protect its buyers from forgery/fraud is just to show you how it directly affects the sellers. Sellers of fake items or items with a very low quality won’t go to Amazon because they know that they will have to pay the buyers in case of claims or they will be kicked out of the marketplace. The outcome of the guarantee, besides obviously protecting buyers, is that Amazon is self-selecting good quality sellers for its platform.

SELLERS Perspective

Amazon

eBay

Fees

MORE EXPENSIVE

- Listing Fee: Low for volume

- Commisions: High 15%

Better for high volume // High rotation items

CHEAPER

- Listing Fee: Low for individual listings

- Commisions: Low 8%

Better for High price // Low rotation items

Format

Fixed Price Format

Fixed price + Auction

Auction: Better for Antiques and Collectibles. Ebay moving into Fixed Price direction

Average sale Price

BETTER

Buyers pay more on average for the same items

WORSE

More price competition

Payment Methods

LESS OPTIONS BUT EASIER TO MANAGE

If Amazon can’t collect the payment, the seller doesn’t have a sale, and the item remains listed.

MORE OPTIONS BUT MORE COSTLY

eBay sellers can accept PayPal, money orders, cashier’s checks or cash. However, they’re responsible for managing collections, which means investing more time and labor into each transaction.

Return Policy

WORSE

Tight claim and quality control. If many clients solicit returns, they can be kicked out of Amazon

BETTER

Not obliged to return. The only penalty could be a bad feedback

Shipping / Fulfillment

BETTER

Amazon fixes the shipping credit, per category, regardless of what actually the shipping cost ends up being

WORSE

Seller fixes shipping price, but supervised by eBay

(to avoid overcharging)

Client Follow Up / Marketing Info

WORSE

Sellers are not allowed use the contact information for follow up marketing actions. This is a big setback for any seller because in each transaction, the seller is selling an item, but the customer is acquired by Amazon, not by the seller.

MUCH BETTER

Billing information is managed by the seller itself. The seller can decide what to do in terms of follow up marketing actions. The long term relationship will be between the seller and the client, not between the platform and the client.

Conclusions and final thoughts

• Although in general Amazon seems to have better quality of service and a more options for sellers, It’s more expensive and doesn’t allow follow up marketing actions; two things that are not trivial for sellers. In other words, It might be better… but at a cost.
• The other very important point is that the clients of both platforms tend to be loyal to their marketplace, which means that if you’re a seller on eBay and decide to start selling on Amazon, you’ll reach millions of NEW customers. Sell on both platforms, you have nothing to lose, only millions of new customers to reach.
• As a final conclusion, I could argue that both platforms should be used only to generate incremental sales, and not become the only source of income. To be so dependent on only one sales channel, has always proved to too risky….

Question about amazon

Amazon is one of the most trusted online businesses. As leaders in the field on internet retailing, Amazon has the e-commerce technology and the traffic to sell your products to a global market. If you’re an internet marketing newbie, quickly read through following features that Amazon offers for product sales.

Amazon Features

To give you a feel for the site, let us first take a look at the basic features offered by Amazon. Feel free to visit the site right now – do a search for any product and see what appears on your screen. Features to notice:

• Results always contain a professional photo or some sort of graphic of the product.
• The price is made visible and it is combined with an offer, i.e. free shipping. Notice how the amount that is saved off of retail is made visible. This is an established advertising strategy – Amazon is telling people what the product is worth and that it´s presently selling for less than the amount that it is worth.
• Amazon mentions the number of items that are in stock and the estimated time that the product will take to get to the customer. Shoppers are more inclined to buy an item when they are aware that the product’s quantity is limited. Time expectation is also a useful feature for most customers and sellers.
• Amazon makes use of Cross-Selling and Up Selling. This refers to a concept of selling that is based on product similarity or asking the customer if they would to purchase another product that compliments the first one that they bought i.e. when a customer considers one product; Amazon makes a mention of another product that might also interest the customer.
• A ‘Look Inside’ feature is offered to customers who are shopping for books. This life-like feature allows the customer to have a closer look at the book.
• Reviews – The ‘Editorial Review´ section describes the product in great detail. Amazon also allows customers to review a product. These reviews are usually reliable, fair and act like testimonials about the product. All kinds of feedback can be useful for the seller.
• Added Extras – Amazon includes various other types of cross-selling and interactive devices i.e. customer discussions, a Listamania feature, Wiki Info etc. All these extras can be used to create interest around specific products or topics.

What CAN and CAN’T be sold on Amazon

Amazon permits sellers to place their products in the following categories: Books, Music, DVD, Video/VHS, Automotive, Baby, Camera and Photo, Electronics, Everything Else, Health and Personal Care, Home and Garden, Musical Instruments, Office Products, Software, Sports & Outdoors, Tools and Hardware and Video Games.

Please note that you will need to get a prior authorization in order to sell in the following categories: Apparel, Beauty, Cell Phones and Accessories, Gourmet, Grocery, Jewelry & Watches, Personal Computers (in Electronics category), Shoes & Accessories and Toys & Games.

The following products cannot be sold on Amazon: Magazines and Newspapers, Adult Toys, Gift Cards and Gift Certificates, Guns and Ammunition, Photo Processing, Prescription Medication, and Tobacco and Alcohol.

How it all works:

• Registration

For you to start selling your product on Amazon, the first thing you need to do is register. This is a simple process that requires you to fill out a short online form to register as an Individual seller. If you think that you will need to process more than 40 orders per month you should register as a Pro Merchant.

• Upload Product Inventory

Amazon has made it really simple for you to upload your product inventory. After your registration, you have three options for submitting information that is related to your product:

Option 1: Use the Add a Product feature on Seller Central to create one product at a time. If you are unfamiliar with Seller Central, all you need to know is that it is Web interface used to deal with all aspects of selling on Amazon.com. You can use this tool to add product information, make inventory updates and later on, handle orders as well as payments though it.

Option 2: Make use of the Seller Desktop. This is a free and user-friendly desktop application that you can use to add products in bulk or individually to your inventory. Option 3: If you want to submit info about many products simultaneously, make use of the inventory files to create multiple products.

• Your Products get Spotted

By listing your products on Amazon, they reach millions of potential customers 24/7 – Amazon’s traffic, now also becomes your traffic.

• Your Product gets Purchased

Buying a product from Amazon is not only convenient, but also really simple and quick. Your product is easily purchased at the click of a mouse.

• Shipping

Essentially, you are in charge of shipping your product to its new owner. Amazon will notify you about the purchase via email when an order has been placed. All you have to do is, pack and ship your product to the customer. If you would prefer not to handle this section you could opt for the Fulfillment by Amazon option.

• Money in Your Pocket

Amazon then does the payment to you via a direct deposit into your bank account. You will also be notified about this deposit via email as soon as your payment has been sent.

While we are on the subject of money, let me give you an outline of Fees involved in becoming a Seller on Amazon… There are 2 major ’seller’ packages that have been made available by Amazon. If you are looking to sell only a few products or expect to have less than 40 orders placed per month, you would want to register as an Individual seller. The only fee involved here is a ‘per product sold’ fee of $0.99 – this means that you only pay $0.99 per product that you sell. On the other hand, if you think that you will be selling much more than 40 products per month, you should sign up to be a Pro Merchant. Here you should expect to pay a standard monthly subscription fee of $39.99 as well as a minor referral and closing fee when your products sell. These fees are related to your products category.

Remember, for both selling options, there are no individual item listing fees and no credit card processing fees.

 If you are new to e-commerce, you may be a bit concerned about the idea of doing financial transactions over the internet. Not to fear though- Amazon has developed a few handy features that may help set you mind as ease.

• Fraud Protection

Amazon offers its sellers a world-class payment fraud protection service. They have devised a system that is ridden with personalized notifications that tell you exactly what is going on with your orders and payments at any given time.

• Credit Card Facilities

Naturally, Amazon is licensed to perform secure transactions with most major credit card providers.

• A-to-z Guarantee Program

This program is particularly designed for the safety of the customer but it is important to be aware of a program of this nature as it has been created to establish a sense of business confidence between the customer, Amazon and you. The A-to-z Guarantee Program has been fashioned to handle situations where a customer: 1) Never receives a product or 2) Receives a product that is different to what was ordered. The customer is initially encouraged to contact you (the seller) personally if this type of product arises. If you cannot resolve the problem, the customer can then file an ‘A-to-z’ claim to Amazon. Amazon then sends you an email, which outlines the customer’s claim. You are requested to respond by mailing the order’s basic information and an outline of the fulfillment process. Amazon will then decide how the claim will be settled – this may result in you having to refund the customer.

So now that you know how to get yourself started, you need to learn a few tricks of the trade… It’s all about the SALES, so what can you do to make sure that your products sell like hot cakes?

Tip 1) Keywords

Appropriate keywords are vital to high product sales over the internet. Keywords drive potential customers to your product, thus it is important to try to add product specific keywords to your Amazon product description as well as anywhere else that you may be writing about your product. If you want to get really high traffic from search engines, you might need to do a keyword phrase analysis of your main product. This can be done by using Google’s external keyword tool, or WordTracker’s free tool. It is essential that you choose suitable keywords, with the highest rankings.

Tip 2) Write about your Products

The more online content available about your product, the better it is for sales. It is important that you write interesting content that will appeal to your market, and make sure that it contains your product’s keywords. The next step is to publish this info all over the web. You can make use of the ‘Listamania’ or ‘So you’d like to%u2026guide’ features provide by Amazon, but you can also feel free to blog about your product or make use of social media sites for further product publicity i.e. make friends or start a group with people on Facebook who possibly have an interest in the type of product that you are selling.

Tip 3) Online Product Promotion Companies

Feel free to do a Google search to find a list of top product promotion companies. There are many companies available that will aggressively market your product online – with this type of external help; you won’t have to personally take on the marketing of your product. The only downside about making use of these types of companies is that most of their services require you to fork out a hefty bundle of cash.

As most Sellers actually opt for this kind of product promotion I would like to introduce you to an interesting company called RankTracer. They offer product promotion as a FREE, extra service, while the company primarily offers sales tracking for any product sold on Amazon.

RankTracer has been designed as a dynamic analysis tool. It allows you to track the sales of a variety of products on any of the Amazon locales – providing you with useful reports of sales rank statistics, complete with interactive alert systems and flash based graphs. If you are a selling anything on Amazon, the interpretation of this info will give you transparent and instant access to your actual sales figures, which is information that Amazon does not release. If you would like more info about RankTracer services simply visit www.ranktracer.com

Question about amazon