Selling On Amazon Vs Ebay
Amazon and eBay offer very different experiences for both buyers and sellers.
While many new sellers naturally wonder if its better to sell on Amazon or eBay, our experience is that this decision largely depends on the item you are selling.
For this reason, we sell on both Amazon and Ebay.
Here is a post that goes into detail on , including how we decide where were going to list any given product.
Costs Of Selling On Walmart Vs Amazon
The worlds biggest retailer and the worlds most valuable retailer are locking horns and battling it out to become the go-to place for online shopping and online retailing.
Household names Walmart and Amazon have transformed the way we buy and sell online, but with so many similarities between the two , deciding which brings the best benefits for your eCommerce business can be difficult.
Ultimately, it comes down to how much money you make, which is why were looking at the costs of selling on Walmart vs. Amazon.
Understanding Safety And Compliance Requirements
For a long time on Amazon, very little safety testing was required to have your products available on the marketplace.
However, due to the changes in case law and changes in policy, Amazon is now very particular about the kinds of products that are available on the marketplace.
If your product is in regulated categories such as toys or childrens pajamas, you need to make sure that you understand what safety testing is required for your products to be sold on Amazon.
If your product is a topical cream, for example, make sure that you have the correct FDA allowances and youre not making any prohibited health claims.
Be prepared that Amazon may ask for your compliance paperwork and may restrict your selling privileges until they can be produced. This now includes having the proper liability insurance for your products.
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The Conclusion: Seller Fees
Comparing eBay and Amazon on seller fees is a close one to call. Once you account for PayPal processing fees, eBay is only about 2% cheaper than Amazon.
True, those fees are on their way out, but eBay also charges extras to make a listing truly competitive, like the subtitle upgrade. If you choose to pay for FBA, the difference between eBay and Amazons selling fees could be negligible.
This ones a draw, with the right option depending on the type and volume of products you sell.
Amazon Individual Seller Accounts
Geared for occasional and low-volume sellers, Amazon Individual Seller accounts require little setup and have $0 monthly fees. But you have some restrictions compared to the Pro accounts:
- Allows up to 40 product sales per month. This is not the number of product listings, but actual products sold.
- You have to create listings manually in the Amazon Seller Central dashboard. Bulk uploads arent supported.
- Cannot offer gift wrap
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Let’s Talk About The Cost Of Selling On Amazon Fba
Oftentimes, cost is the one thing that holds a lot of people back from selling on Amazon. When you’re first building an Amazon business, there are a lot of unknowns. Tatiana and I have been in the Amazon game for a long time now. Based on our experiences, we know what works and what doesn’t.
We want to help accelerate your success as an entrepreneur so that you don’t have to make the same mistakes that we made. Tatiana and I have a good grasp of how much money it will cost you, on average, to build an Amazon business. However, keep in mind that there are variables that come into play.
Thus, we can’t give you an exact amount. How much it will cost will be based on the product that you choose, how much inventory that you order, and/or how much money you want to invest into marketing.
That being said, we can still give you a rough estimate of what we would recommend. Let’s dive in!
Fulfillment By Amazon Fees
Both Individual and Pro sellers can use Fulfillment by Amazon, or FBA, to stock, pack, and ship their Amazon products. Of course, Amazon charges fees for this, but many Amazon sellers find the FBA fees are quite reasonable for certain items. Plus, it takes time-consuming daily order packing and shipping tasks off your shoulders and even makes your items Prime-eligible.
FBA fees vary based on product size and weight. Like every other facet of selling on Amazon, you need to understand the total fees youll pay to store and ship your products with FBA before jumping onboard.
How does FBA compare to other fulfillment solutions? Read Best Order Fulfillment Services
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Ebay Vs Amazon: The Final Verdict
So, lets review. As weve seen today, Amazon supports sellers by:
- Offering them a vastly larger audience.
- Providing superior shipping and fulfilment support.
- Giving more advanced advertising options.
eBay, meanwhile, is great because it:
- Provides a less hyper-competitive marketplace.
- Makes it much less hassle to sell internationally.
Both being about equal in terms of seller fees, that looks like a 3-2 win for Amazon. But think about the situation critically and assess whats best for your business. If youve got a more niche audience in a lot of global markets, eBay might be right for you.
Now youre armed with the facts, you can make the right call and win more business than ever before.
Amazon Selling Fees: The Biggest Cost Factor
Amazon selling fees are the most confusing aspect for sellers when they carry out the cost analysis of doing business on Amazon. There is an entire list of Amazon fees one has to consider under different conditions to sell on the platform.
So, letâs just break down all those fees in as short and simple descriptions as possible.
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Additional Costs To Sell On Amazon: Shipping
As mentioned above, there are 2 ways you can handle shipping: a) let Amazon do it for you or b) do it yourself . If you want to handle shipping yourself, you need to do it according to Amazons rules. These depend on product categories:
A) Non-media items You can decide between 2 different fee types:
- Weight-based shipping: set a charge for either per-pound or per-item handling
- Price-based shipping: set a charge for price bands
Once you decided on the shipping model, you can adjust shipping charges for different regions. The default charge for standard shipping within mainland US is $4.49 and $0.50 per lb. If you have a Professional Seller Account, you can change these settings in your Seller Central Interface. And we recommend doing so, as your actual shipping costs are likely to be higher than the default settings.
B) Media items In the past, the shipping rates for BMVD items were set by Amazon and could not be changed. Now, sellers with a Professional Account are able to migrate to a new shipping settings and activate seller-set shipping rates.
What Is The Buy Box On Amazon
Being in the Buy Box means being the featured listing when a buyer visits a product page. In other words, your inventory is added to the buyers cart if they click the main Add to Cart or Buy Now buttons.
The majority of sales happen through the Buy Box some estimates put it at over 4 in every 5 sales.
If you want to increase your sales, its important to make sure you are eligible to earn the Buy Box and follow our simple formula for winning the Buy Box more often.
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Setup Your Llc & Tax Information
The first step is actually an optional step. But keep in mind that if youre serious about selling on Amazon FBA, you need to protect yourself. Not only legally. Also financially. You need to separate your business assets from your personal assets. Of course, you dont have to do this from day one. But you eventually do need to do this.
To setup an LLC in the United States is rather straightforward. You pick a state and you setup your LLC in that state. An LLC stands for Limited Liability Company. And it does just that. It limits your liability. Wyoming is a good state because there is no sales tax to pay in Wyoming so many people opt for Wyoming.
Find a registered agent and setup the corporation through either BizFilings or LegalZoom or any others. Your choice. But youll also need an EIN. That stands for an Employer Identification Number. Essentially thats your tax number in the US and most other countries have something similar to this so figure out what you need where youre at and get setup.
You can expect to spend anywhere from $100 to $300 setting up your company in the US. Other countries have different fee structures so check with your local government or ask your accountant.
How Much Does It Cost To Sell Something On Amazon
The start-up costs for both online retail in general and selling on Amazon are very low compared to other businesses.
A commonly cited figure for starting a business is $30k, but this figure is highly variable based on the industry you are getting into.
JungleScout recently showing that the average Amazon seller only spends $3,836 to get started! But a lot of people cant even afford to spend that. If you dont have $4k sitting around to invest in a product, thats okay!
The strategies we recommend for getting started dont even cost this much in fact, you can get started with less than $100!
Later in this guide, well discuss this more. You should also grab a copy of the book Im offering about getting your first sale on Amazon.
Well also discuss the but there are options for getting started where you only pay once an item sells.
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What Are Common Amazon Fba Fees
Amazon charges all sellers 15% of the products selling price on each product sold, regardless of the ecommerce fulfillment method.
Outside of the seller fee, Amazon FBA charges two main types of fees: fulfillment fees and inventory storage fees.
The FBA fulfillment fee includes the entire picking, packing, and shipping process for each order shipped.
FBA inventory storage fees include storing your products in Amazon fulfillment centers.
Here is what exactly each fee means and why prices for each can vary so wildly.
Types Of Amazon Fulfillment Methods
If you , you have three fulfillment methods to choose from:
Each of these Amazon shipping options has its own pros, cons, and pricing structures.
Disclaimer: This article and the included calculator are meant to serve as an example of the fees Amazon FBA sellers may encounter. The fees discussed within for both FBA and ShipBob will vary depending on several factors, including a sellers industry, products, seasonality, sales channels, order volume, and more. Rates and types of fees are subject to change.
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How Can Refund Retriever Help Reduce Amazon Seller Fees
In addition to FedEx and UPS refunds, Refund Retriever now offers a solution to all your FBA reimbursement needs. We manually check the entire inventory lifecycle to ensure all inventory is available for sale. Youre already paying Amazon enough to sell your products. Now, receive reimbursements for all improperly received or miscounted items, refunds issued when the customer never returned the item, and failure to issue the 20% restocking fee. All of this without having to do a thing on your end!.
What To Sell On Amazon
Picking what to sell on Amazon is one of the most difficult steps of getting started for most people.
It doesnt have to be.
Most people run into problems because they try to start with a strategy called private labeling.
Private labeling means putting your own brand on an easily manufactured product. This generally involves little to no modifications to an existing product design.
When this idea was first catching on, it was easy to find profitable niches. As time has gone on and more people have learned about the supposed ease of this strategy, the competition has grown incredibly fierce.
While building your own brand remains a highly profitable strategy if you are successful, it requires a lot more experience and skill to do well. It isnt as simple as plugging in some numbers into a tool then heading over to Alibaba to order whatever product the tool told you to.
You need to understand the market, and you need a plan to add value for customers.
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How Do You Get Paid By Amazon
When your Amazon Seller Account is settled and you have a positive balance, Amazon sends the money to your bank account using an ACH or electronic funds transfer. It can take up to five business days for the funds to appear in your bank account after Amazon initiates a payment.
Before Amazon pays you, you must add a valid bank account as the deposit method within your seller account settings. Amazon cannot make payments to a credit card or online payment system, such as PayPal.
How To Calculate Amazon Fba Seller Fees
As mentioned above, all Amazon sellers must pay to sell on the marketplace. When you sell something on Amazon through the Professional plan, Amazons seller referral fees are 15% of the products selling price. For example, if your product sells for $100, Amazon would take a $15 cut of the sale, leaving you with $85 in revenue before other fees.
But as you now know, theres more to Amazon FBA than selling fees.
Are you leaving money on the table or even losing money by selling and shipping via Amazon FBA?
Whether youre launching a new product or are a veteran FBA seller, make sure you do the right research and calculations for each product you sell.
This includes taking into account all of the fees mentioned above, plus order revenue, production costs, platform costs, and more.
Because FBA fees are so variable, if you dont stay on top of how much youre paying Amazon, you may find that your profits are lower than expected, or even that youre barely breaking even.
Thats why we built an to show you how much youre spending on Amazon FBA. Below is instructions on how to use it.
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The Early Stage Costs To Sell On Amazon
You canât sell on Amazon as you do on Craigslist where there are no checks and balances on sellers. Everyone can sell anything there without needing to fulfill any requirements. With Amazon, you need to take care of a list of prerequisites to get off to a flying start as a seller. Sorting out those prerequisites also entails expenses. Therefore, you should always include them in the accumulative cost of selling on Amazon.
Pricing Strategies On Amazon
The way you price your items on Amazon will have a huge impact on your profitability. After the items you source, pricing is the next most important factor in my opinion.
My default recommendation with pricing is to price in line with the competition if there are other sellers on the same listing.
To do this, find the lowest price offer using the same fulfillment method that you will be using, then match their price or add 1%.
For example, if there is a seller on a listing at $49.99 selling the item FBA, and you will be selling the item via FBA as well, I would price between $49.99 and $50.49.
When you set your price to match or price above the other sellers on the listing, you avoid something known as the race to the bottom. The race to the bottom happens when multiple sellers on the listing are constantly trying to be the lowest price on the listing. This can turn into an endless battle and erode all of the potential margin.
An example of how this goes:
Seller 1 is priced at $19.99, seller 2 prices at $19.95, seller 1 lowers their price to $19.89, seller 2 lowers their price to $19.75, and on and on, and before you know it there is very little margin left.
Pricing at or a bit above the competition helps to maximize the margins you will see on sales.
Here are some other tips I recommend when you are pricing on Amazon:
These tips should help you to get started pricing in a way that will generate sales and will maximize your profits.
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How Many Units Should You Order Moq
The question that most people ask me is the following. What MOQ should I order? My answer is always the same. Go after 500 to 1000 units at the start. Then you can re-up your supply after that. But in the beginning, you cant expect to have 200 units on hand and get anywhere fast.
Why? Because you need to invest in your listing by discounting your products and offering coupons. Thats the best way to get people to buy in the beginning. Especially when you have zero to very few reviews. People dont want to buy products that dont have loads of reviews because, why should they?
Unless you give them an irresistible offer, its going to be hard to score that business. That needs to be clear upfront. So, depending on your initial MOQ, the cost to start selling on Amazon FBA is going to vary. If you order 500 units at $3 per unit, thats $1,500 in initial inventory. But thats not your only cost. So keep that in mind.