The business model of Amazon vs. eBay

business model of Amazon


Using eBay or Amazon is more accessible than yard sales of the past, whether you list items from the comfort of your own home, have money transferred directly to you or drop products off in the mail. Which primary e-commerce site, though, is the best? Understanding how each of these businesses produces money could be beneficial. For more information, you can visit the below link:

Key points you should know about eBay and Amazon.

  • Over the years, eBay has made it easier to sell on its site by introducing a more straightforward system for determining the charge for things sold.
  • Amazon’s fee structure is a little more sophisticated, with variable referral and closure fees, the latter of which is determined by the product’s weight.
  • Buyers can purchase directly from the Amazon website, and sellers can even have Amazon fulfill the order if they wish to store it at one of Amazon’s warehouses.
  • eBay now allows sellers to create more personalized listings and have eBay personnel create listings for them.
  • As an Amazon seller, you’ll get money placed directly into your bank account, but eBay still uses PayPal for most payments.

Know about eBay

Since its inception in 1995, eBay has acquired several companies, including PayPal, Kijiji, and StubHub, and as of the second quarter of 2021, it had 159 million active buyers. In 2017, PayPal was spun off from eBay. eBay’s money transfer/payment service is highly profitable, accounting for over half of the company’s income. With a 2.9 percent + $0.30 fee for each sale, PayPal fees can swiftly eat into a seller’s profit margins. But let’s concentrate on the aspect of eBay that is similar to Amazon: the Marketplace. The eBay Marketplace used to charge consumers an insertion fee based on the starting bid for an item and a final value fee when the item was sold. Every eBay seller now receives numerous free items.

Know about Amazon

Amazon’s charge structure is considerably more complicated than eBay’s. Sellers have two options for listing with the company: they can make either list as Individuals or Professionals. Individuals pay $0.99 for each item to list, plus a referral fee that varies between 8% and 45 percent based on the item’s listing category.

Furthermore, there is a variable closing cost of $1.80 per item for BMDV (books, media, DVD, and video) products, which is not flexible. Other items are subject to a variable closing cost based on the item weight.Vendors can list their things in 20-30 different categories (whether they’re selling as individuals or professionals) and have Amazon establish and collect shipping fees for BMDV sellers. These fixed shipping rates are ideal for purchasers who know that when purchasing BMDV items on Amazon, the total price can be determined easily without looking for each seller’s shipping prices.

Amazon allows sellers to list their products simply by providing the UPC or SKU number of the item they want to sell. Because the required information has already been input by Amazon personnel, this method reduces the time it takes for a seller to construct a listing. Amazon’s Fraud Protection program safeguards periodic bank transfers to the seller’s account, complete payments, and sellers.

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