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Pros and cons of selling on Amazon, eBay and Etsy

Jennifer Lonoff Schiff | Oct. 21, 2014
E-commerce business owners and digital marketing experts discuss the pros and cons of selling on Amazon, eBay and Etsy vs. selling on a standalone site -- and why it can pay to do both.

Similarly, "Amazon affiliates will link customers to [your product] through blog posts, Facebook posts and Twitter," says Kathy Pickus, owner, Dot Girl Products, which provides products and information for girls experiencing their first period. "This relieves [you] from the headache of maintaining an affiliate program."

Cons
Fees. "On Amazon, fees start at a minimum of one dollar and go up to as high as 25 percent of the item's price," says von Bernuth.

And "if you decide to do Fulfillment by Amazon, where Amazon warehouses and fulfills your product, you pay a listing fee plus typically a few dollars in fulfillment fees depending on the item," adds Lowe.

"I calculated our current total cost per transaction just last week through our FBA business and after adding up the seller fees, warehousing fees and other transactional costs, we pay on average 26 percent for every dollar of revenue we get from that sales channel vs. around 8 to 10 percent on average for Sewelldirect customers," says Cameron Postelwait, marketing director, Sewelldirect.com, which sells connectivity solutions.

You're a commodity. On Amazon, "you're mostly a commodity and subject to someone undercutting your price," says Mike Kawula, who has sold on Amazon and eBay as well as his own site and is now a business consultant. "You're [also] competing with Amazon directly if they decide to sell your product," which can hurt your sales.

No control over branding. Another disadvantage to selling on Amazon vs. your own site: "There aren't many branding options on Amazon," says von Bernuth. "The only thing you have control of is your products' photos and text description. Everything else is Amazon branded."

"Customers rarely see who the end vendor is when shopping through Amazon," adds Andrew Van Noy, CEO, Warp9, a provider of Magento mobile commerce services for midsize online sellers. "This disconnects you from the customer, and therefore does not strengthen your brand."

You can't capture buyers' email address or remarket to them. "Amazon does not let you capture a buyer's email," says von Bernuth. "On your own site you can set up an email newsletter and encourage customers to sign up for it."

Lack of customer loyalty. "Customers are loyal to [Amazon] and not your brand," says Van Noy. So "you lose the repeat business or the ability to up sell/cross sell."

eBay
Pros
Ease of use. EBay's easy-to-use selling, listing and inventory tools make it easy to sell your products on the site -- and do it quickly.

Immediate access to millions of potential customers. On eBay, which has over 149 million active buyers located around the world, you have "built-in traffic and customers -- [and often get] above average conversion rates," says James Applegath, who sells on both eBay and his own site, Defunkd, a vintage t-shirt collective.

 

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