Choosing Amazon Over eBay

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Includes: AMZN, EBAY
by: Randy Smythe

I've been asked by several readers why I'm writing more positive posts about Amazon (NASDAQ:AMZN) than I do about eBay (NASDAQ:EBAY), so I thought I would list the reasons. I still believe eBay can be a fantastic business again but I don't see that turnaround anytime in the near future.

Why I Prefer Amazon over eBay

In regards to management:

  • Amazon thinks long-term while eBay managers, manage by the quarter.
  • Amazon is entrepreneurial while eBay is a consultancy.
  • Amazon takes chances while eBay manages risk.
  • Amazon is a technology company while eBay thinks they are a technology company.
  • Amazon is proactive while eBay is reactive.
  • Amazon manages the business while eBay manages the stock.
  • Amazon takes responsibility for their business while eBay deflects responsibility.

In regards to online sellers/merchants:

  • Amazon is easy to manage (from the seller perspective) while eBay requires so much more effort.
  • Amazon customers are low maintenance while many eBay customers are high maintenance.
  • Amazon generates higher ASP's then eBay for the same items.
  • Amazon makes their money on sales success while eBay makes their money regardless.
  • Amazon understands retail while eBay ... doesn't.
  • Amazon is growing while eBay is floundering.

eBay is still a huge marketplace, where you can find just about anything, but many professional sellers are changing their eBay plans. For many eBay sellers, eBay is becoming more of a customer acquisition or a liquidation channel.

Amazon is not perfect, I'm sure, but I much prefer the way they conduct business.

Just my 5 cents!

Disclosure: none

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