Coming out of the lockdown, in which e-Commerce businesses affirmed their importance and had to face their shortcomings, many entrepreneurs are now wondering about the steps to take in order to enter a marketplace and whether it is worth it.
Recent statistics are suggesting that half of Italian’s businesses are active on online marketplaces. And the top two most used ones are, unsurprisingly, Amazon (38%) and eBay (19%).
E-Commerce giant Amazon, characterized by a strong brand identity, presents itself as a trustworthy and safe main online reseller. In fact, customers have the perception of buying directly from Amazon and not from merchants.
In 2019, it reported an annual revenue of 280.5 billion dollars. It further recorded a conversion rate of 13%, which is almost seven times more the average of the e-Commerce sector (2,04%).
A user can apply to Amazon through two different programs.
You can be contacted to discuss a Vendor contract. If the first step succeeds, Amazon buys your inventory and deals with the whole sale process.
Otherwise you can apply to the Seller Central: it is possible, if needed, to leave the logistics duty to Amazon through the Fulfilled by Amazon (FBA) service.
It is useless to deny that a product “sold and sent by Amazon” or “sold by X and sent by Amazon” leads inevitably towards more visibility and brings therefore more transactions.
From the other side, an independent merchant (FBM) is exempt from additional costs and this implies higher profit margins.
In the latter case the platform Pricings include a monthly fee for the Professional Plan (€39 IVA excl.), to which a further referral fee, ranging from 7 to 20% (45% for Amazon device accessories), is added.
Brand owners can register their label in order to be able to manage an Amazon Store: an actual website within the platform that showcases the brand’s products.
Additionally, producers that do not have any resellers active on Amazon can escape the fierce competition taking place to get the Buy Box: the “Buy Now” button driving 90% of transactions. The Buy Box is assigned to the reseller with the best price, feedback and logistics.
eBay, with its simple and immediate usage, is displayed as an e-Commerce accessible to everyone, small and unpopular enterprises included.
In 2019, it reached 183 million active users and reported an annual revenue of 10.8 billion dollars.
Born as a marketplace for Auctions, 80% of products currently present on the platform are actually sold with fixed prices, in the so-called “Buy It Now” listings.
Unfortunately, to the present day, eBay does not seem to catch the attention of younger generations: 61% of its worldwide audience is in fact composed by people aged 35-64.
It is a marketplace hosting a very direct relationship between seller and buyer: eBay steps in only to mediate disputes between the two parties.
As opposed to Amazon, here feedback is not assigned to the purchased product but instead to the seller and users are often inclined to trust only merchants with many positive comments. This makes the feedback an attribute of outstanding importance, putting sellers that are in conflict with not-so-fair buyers in difficulty.
Nonetheless, eBay remains a marketplace for bargains, with products displayed at a good price: a consequence of lower fees compared to Amazon. A monthly subscription for an eBay shop is charged only €19.50, to which a further final value fee is added (4-10%).
Overall, the two marketplaces attract different customers and host several product categories, some more suitable for one platform than the other. Amazon best selling items include electronics, beauty and home products. The most popular eBay products are instead replacement parts and various accessories.
Both offer great opportunities for businesses expanding their e-Commerce network or, alternatively, entering for the first time the online markets.
Given that one platform does not exclude the other, enrolling on both marketplaces is not a too much risky step after all.
The e-Commerce Consulting service offered by E-Business Consulting allows to evaluate carefully all the winning elements for the construction of an e-Commerce project that allows to generate profits in a market scene that does not allow evaluation errors. Contact us for a free quote without obligation, we will be happy to help you.