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Many eCommerce sellers often wonder where they should start their online businesses. Is eBay or Amazon more suitable for them? If you are having difficulties choosing between these two platforms too, hear out Willy’s take about this issue in this episode. 

In this episode, Willy is going to cover:

  • The different customer profiles on eBay and Amazon;

  • Which platform is more suitable for building your brand;

  • The fulfilment processes available for both platforms and how they can help with your business

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TRANSCRIPTION

All right. So today's podcast, I'll talk about Amazon versus eBay. Where should you sell and where should you start your e-commerce business?

All right. I started my e-commerce journey in early 2012, and at that point in time, I started selling on eBay first. So I drop shipped on eBay, and how do I do the eBay business is I buy products from Walmart, Amazon, Target, Sears, and I sell to eBay customers. So I put up my listings on eBay as a normal standard listing. It's not those kind of auction types where people bid and you just sell your products based on auction, right. So I just list my products, and those products are from Amazon itself, from Walmart, from Target.

And the thing is that these products, when customers buy from them, I have to ship it over from Amazon, Walmart and this kind of small suppliers. And when I was selling on eBay, the profit is still okay-ish, is like 5% to maximum about 10%. But there's a lot of price wars and you need to know your keywords when you list your products on eBay itself. But majority is price wars because competing sellers on eBay, they will try to copy your listing and you have identical listings all over eBay. More or less, the difference is only the price, so the price difference. Okay. So this is how I started my e-commerce business on eBay and is based on the model of drop shipping, right.

So at that point in time, I was thinking, should I also sell on Amazon, because I buy from Amazon suppliers. So I was thinking, okay, maybe I should try to sell on Amazon to see how it goes because I want to supply to eBay sellers. At that point in time there's a lot of eBay sellers. I think until today there's still a lot of eBay sellers also, and they might buy products from Amazon to fulfill their eBay orders. Okay. So it's still the same practice until today.

And when I opened my Amazon account... at that point in time, I still selling on eBay. So when I opened my Amazon account and I want to supply to eBay sellers my Amazon products, right, I found that my profit margin can be higher because I own my own listing. I can complain to Amazon saying that, "Hey, there's another seller who's using my keywords or rather my pictures on my Amazon listing," because Amazon really clams down on this, kind of like copyright the products, or rather they call it the DMCA. Right, it's more towards, they want to protect creators in regards to this.

So the difference is that when you sell on eBay, eBay customers, they are there to get a good deal. Generally, the mindset of eBay customers, they are bargain hunters. They want to get a good deal. They want to get the most affordable products. I wouldn't say “cheap products”, they want to get the most affordable products from eBay, and if anything goes wrong, PayPal covers them. But the customers on Amazon is on another kind of mindset. On Amazon, customers want to have a customer service experience, right. So whenever things goes wrong or when they receive the wrong product or when the products came on date of arrival, DOA, they can complain to Amazon and say that, "Hey, the product that I receive is damaged. It's not working." Amazon will refund their money and they can return the product easily. Okay. Somebody will actually pick up the product from them and send it back to Amazon. Right.

So for eBay is a bit of a difference, because eBay, they will encourage the sellers to take back the product. But the returns, refunds process will take some kind of hoops to gradually go through, right. I'm not sure about now because right now I'm not selling on eBay. I'm majority selling on Amazon with my own websites and all that. But the thing is that the experience at a point in time for buyers is different. Okay, like what I mentioned, eBay, they are bargain hunters. Customers on Amazon, they want experience, they want security for their money. So whenever people buy things from Amazon, they want that safety measure, right.

So it's like recently I bought a laptop. So that laptop, it actually crashed, the hard disk crashed, I think about in about 60 days. So I complained to Amazon said, "Hey, the $2,000 laptop that I bought from you, the hard disk crashed and I'm not able to retrieve anything, and it's just like 60 days." Right. So I asked Amazon, "How can you guys help me?" So Amazon say that, "Hey, you can actually send this laptop back." Somebody will actually come and collect from you and we'll investigate and you'll get your money back. So after another 30 days after I returned the laptop itself, I'm able to get my money back in full. So this is the experience that I want when buying from Amazon, because Amazon enforce customer service.

And the thing is that because I've been selling on Amazon for the last nine-ish years, Amazon is able to help you to build a brand. So when customers buy from Amazon, they feel safe, especially those customers in the US where they are very used to buying from Amazon. They feel safe buying from you because your product is on Amazon, even though your brand is not known anywhere else. You just have a small website. You just have a new Facebook page with only one like. You only have Instagram account with only one follower. As long as your product's on Amazon, and if you have no reviews, customers still can buy from you because they know that, hey, the product's is more or less secured. Their money's more or less secured by Amazon itself.

And the other thing is that for the past couple of years, if you are selling on eBay, you can’t store your product on eBay. I'm not sure about now. Maybe they have arranged some kind of warehouse deals arrangement nowadays, right. But the thing is that I don't think anybody can beat the fulfillment network of Amazon because it spans the entire globe. They have fulfillment networks all over the world and they are very, very established in the US, right. The thing is that for sellers like us, we can actually fulfill our products through Amazon's FBN network, either automatically or manually.

So automatically, as in, when you sell on Amazon, the listing, (Amazon) will actually fulfill the products for you. But manually, that means if you sell on your own website and you have some manual orders that come through your website, you can use their multichannel fulfillment to fulfill for you. So even though you're a seller selling on Amazon and you are also a seller on eBay, you can use the multichannel fulfillment to fulfill your products to your eBay orders also and you can store your products.

So the thing is that I don't store my products at home. My products are stored at Amazon warehouses where they can actually do all this kind of things for me. And if there's any mishap happen to my products in their warehouse, Amazon is able to fully compensate me back for the item value. Like a couple years back, they have a FBA centre that have some kind of fire mishap and my products are damaged. I think I was reimbursed back over $2-3,000 in product value. So I know that my products are stored Amazon warehouse, (and) whenever if there's anything happened, Amazon will pay me back for my products. Right.

Yeah, so that's the difference, and I believe that if you want to start a viable e-commerce business with a very vast fulfillment network, you should try it out on Amazon. So especially for, if there's any eBay sellers who are selling on eBay right now, you can actually try to register an account on Amazon, and fulfilling your orders on eBay will be much easier versus you do it manually or you drop ship from Walmart and this kind of stuff. Right. But, of course, when you sell on Amazon, not eBay, where you sell on Amazon, the profit margin is going to get higher. At that point in time when I started business, my profit margin when I started on eBay is like 5 to 10%. When I sell on Amazon site, it went up to 30% for every order. Okay. So this is how I'm able to scale upwards to seven figures of annual profit right now. All right.

Yeah. I hope this podcast is able to give you some insights about the differences between Amazon versus eBay and where should you sell. So I'll see you in the next podcast.

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Strategy Session With Our Office Today!

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