EBay’s loss is Amazon Marketplace’s gain
Merchants are leaving eBay for Amazon’s Marketplace. While eBay was the first to create a marketplace for sellers big and small and offers lower rates to participate, the company is losing business to Amazon for a number of reasons, the biggest being that merchants moving to Amazon are increasing their sales.
"We saw sales drop 10 percent on eBay and gain 10 percent on Amazon," Chance Knapp, chief executive officer of Vivo Technology, told Bloomberg. Vivo is a laptop parts seller that moved its business between the two sites. "It was like customers were actually shifting from eBay to Amazon."
In the past, sellers have been wary of participating in the Amazon Marketplace because they saw Amazon as a retailing rival. Last year, a study by Upstream Commerce concluded that Amazon was tracing third-party sales on its site and using the insights gleaned from the data to directly compete with marketplace members.
In the end, however, sales count, and Amazon has used programs such as Prime to attract shoppers and drive revenues for itself and the third-party retailers on its site.
"EBay has lost its sight," David Epstein, e-commerce director for Watchwarehouse.com, which sells on both sites, told Bloomberg. "EBay doesn’t think as a retailer, but Amazon does because so much of its business is retail."
Amazon saw its number of merchants double from one to two million between 2013 and 2014, according to Bloomberg. EBay’s number, which includes many more small sellers, has remained flat at 250,000 over the past two years.
EBay, which plans to spin off its PayPal business this year, saw Marketplace gross merchandise volume in the U.S. grow three percent in the fourth quarter. "Traffic was impacted by both the decline in new users due to SEO changes and the occasional buyer not returning to our site or being met with increased friction due to the password reset when they did come," according to the company’s earnings release.
Amazon’s sales during the fourth quarter were up 15 percent and the company announced that the number of sellers using Fulfillment by Amazon (FBA) grew more than 65 percent year-over-year in 2014. Forty percent of third-party unit shipments were through FBA in the holiday period.
- EBay merchants switching to Amazon.com – Bloomberg/The Seattle Times (tiered sub.)
- eBay Inc. Reports Fourth Quarter and Full Year Results – eBay Inc.
- Amazon.com Announces Fourth Quarter Sales Up 15% to $29.33 Billion – Amazon.com, Inc.
- Study: Amazon goes all predatory on marketplace sellers – RetailWire
- PayPal and eBay to go their separate ways – RetailWire
Would you advise sellers to move all or some of their marketplace business from eBay to Amazon? What do you see as the relative strengths/weaknesses of listing with each marketplace? What will it take for eBay to bring more buyers to its site in light of what Amazon is doing?