eBay has close to 500,000 eBay Store/Shops globally and is the top Store platform in the world. The biggest advantage eBay Stores have over their competition is that items listed in your store will get some exposure in eBay search. Over the past couple of years though, this exposure has been very limited, bringing the value of an eBay Store down. While this comparison will certainly not be an Apples to Apples comparison, I'm sure you will be able to see the major difference and decide which is the best option for the online seller. You will also see my preference pretty easily.
- $59.99 monthly fee plus a 7% FVF (Amazon calls it a commission, which is more accurate) You can put an unlimited number of items in your Amazon WebStore for no additional cost. You can also have multiple WebStores for no additional cost. The 7% fee on each sale also includes any transaction related fees including merchant fees.
- It has a shopping cart and uses the same technology that has made Amazon an online retail leader. You can merchandise your products (offer discounts, highlight specific products) and have access to effective marketing features like product recommendations, customer reviews, and recently viewed items for your own store.
- Lots of flexibility with the look and feel and you don't have to be a "techie" to get up and running.
- Amazon's close to 80 million active users can buy on your WebStore with their existing Amazon account and your customers are protected by the Amazon A2Z guarantee.
- Designed for SEO (Search Engine Optimization) Helps your items show up in Google and Yahoo natural search.
- There is no Amazon WebStore search and your items are not available on Amazon.com so with a Webstore you would have to do marketing yourself.
- You get more margin control because you are not competing directly with other sellers in search this gives you flexibility in your mechandising and promotions.
- Different monthly fees based on exposure level and features. I will use the Premium Store (formerly Featured Store) for this comparison as it is the closest to an Apples to Apples comparision. Premium Stores have a monthly $49.95 fee, eBay also charges 3 cents per listing for items with a sale price of $24.99 or less, 5 cents a listing for items priced $25 to $199.99 and 10 cents a listing for items price $200 and up (these are the new listing fees that begin on March 1st.) Each listing runs for 30 days, so if you relist after 30 days you will incur the listing fee again. eBay also charges 12% FVF on the sale of each item, this does not include transaction related charges like PayPal or merchant services etc. When you add PayPal fees or merchant fees to the mix your total fee could be as high as 16%.
- eBay Stores do not have a shopping cart, which can make it difficult to merchandise your items.
- A Featured Store gives you 10 custom pages: "Use customizable pages to boost your brand, communicate store policies, and connect with customers."
- eBay Stores give you a feed to submit to Google Product Search
- eBay Stores get limited exposure in eBay Search (When 50 or fewer CORE listings are found eBay will display up to 50 related Store listings and lowest price generally gets the sale but store items are competing with CORE items for exposure.
- Store Items to get exposure in Google natural search
- Lower prices get the sale on eBay because you're competing directly with other sellers in search.
Okay, so now that we have seen the two different stores and their features and benefits, lets look at what happens when a seller of widgets has 1,000 items to sell and all of them sell for $24.99 in price (for ease of comparison they both have free S&H) and they sell 300 items per month. So lets look at the fees a seller would incur in this scenario. In both cases the seller sold $7,497 worth of widgets in the month and after subtracting COG (cost of goods) they were left with $3748.50 in Gross profit because they had a 50% Gross Margin. (I'm just rying to make the comparison easy to understand) So now lets consider the eBay Stores and Amazon WebStore fees as a Marketing Expense and call it COS (Cost of Sales)
- $59.95 per month fee, no listing fees, unlimited items, pages etc. 7% FVF. The total monthly cost on the Amazon WebStore would be: $59.99 plus $524.79 FVF for a total of $584.78. (COS) or 7.8% of Sales leaving the seller $3,163 in Gross Profit.
- In the case of the WebStore if the seller wasn't able to drive enough traffic to their store to sell $7497 worth of widgets their total cost would be $59.99 plus whatever they spent on marketing.
- $49.95 per month for Premium Stores, 10 Custom pages, no shopping cart, 3 cents per listing and 12% FVF. The total monthly cost on the eBay Store platform would be: $49.95 plus $30 for listing fees ($.03 x 1,000 listings) plus $899.64 FVF and an estimated $299.88 in PayPal fees for a total of: $1279.47 COS (cost of sales) or 17% of sales, leaving the seller with $2,469.03 in Gross Profit.
- In the case of the eBay Store, if the seller didn't get enough exposure in search to sell $7497 worth of widgets their total cost would be $49.95 plus the $30 in listing fees for a total of $79.95 (The eBay Store provides the perception that you don't have to risk money marketing your items.)
So the major difference I see, is that eBay takes the percieved marketing risk out of the equation. The Amazon WebStore seller may have to spend $694.69 or more in Advertising etc. to get the same sales as they would in an eBay Store. The difference being that the customer who buys from you at your Amazon Webstore is your customer and you can offer them deals to your hearts content. The marketing expense becomes customer acquisition rather than strict advertising.
On eBay the customer is eBay's and they place limits on your communication with that customer and you will have to pay the same amount in fees if that customer buys from you again, everytime that customer buys from you again. With an Amazon WebStore your marketing expense is going towards getting new customers rather than selling to your old customers. Developing a brand that you benefit from not Amazon.
With the Amazon WebStore you become an independent online seller who controls your own destiny, rather than having to jump through hoops with every change made by eBay. The beauty of this is, you can still sell on eBay by using CORE for those items that are best suited for that platform; if you choose.
I've been over the math several times so if you see any errors please let me know. Remember the comparision and the numbers were just to show the difference between the two platforms (your results may vary) :)
Update: I forgot one very important point: With an Amazon WebStore you can use Yahoo's PPC (PayPer Click) advertising program to reach out to eBay's buyers. In many cases PPC ads get better exposure than eBay Store listings.
Just my 5 cents!