The Pros and Cons of Selling on eBay and Etsy

Thinking about starting an online business for your side hustle? Get your feet wet by selling through a marketplace like Etsy or eBay first.

Why? Well, there are two big advantages of selling on a marketplace:

● Setting up a shop is quick and generally pain-free
● Getting discovered by customers can by easier and faster

Before you get started on deciding which marketplace is right for your wares, there's a crucial step that you must complete - getting a domain name.

We can hear you now:"Why should I get a domain name when I’m not building a website?" Here are the reasons why domain names matter even when selling on a marketplace:

● You can advertise your products on social media and let the link redirect to your product page on the marketplace
● You can start building your brand
● You'll already have your domain name locked down when you're ready to move over to your own ecommerce website.

Photo by rawpixel / Unsplash

You can take this one step further and get a domain name on a new extension, such as .STORE, to build a more impactful online brand. Using a .STORE domain name will not only give you a short, relevant and brandable address, but it will also help you stand out in the sea of competitors.

Go grab your domain name right now. Seriously. We'll wait.

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Got your domain name? Great. Now, back to the big question: what marketplace should you start out selling your products on? Here are the pros and cons of the big three.

Amazon

Amazon has consistently ranked number one amongst all online marketplaces. It’s the first choice of buyers and sellers, so that means competition is high. But if you can figure out a way to stand out here, you might never need another sales channel to keep growing.

Pros of selling on Amazon

Huge traffic: Amazon’s monthly visitors beat out eBay and Etsy handly. This means more visibility, more attention and higher chances of a successful sale.

Trust: Over the years, Amazon has become synonymous with online shopping. Almost every buyer’s first instinct when thinking of a purchase is to check on Amazon. Therefore, Amazon as a brand holds immense trust.

Product recommendations: If you tag your products correctly, they can organically show up under recommended purchases when someone is looking for a similar product.

Fulfillment by Amazon (FBA): As a small business, you can save big by storing your products at Amazon’s warehouse. Moreover, FBA orders are also shipped and fulfilled faster, giving you an added advantage.

Cons of selling on Amazon

Exorbitant fees: Amazon charges a fee for every item listed and sold. If you choose to go for FBA option, then those fees may make it a losing venture for small retailers.

Zero brand visibility: When selling on Amazon, Amazon is the brand. Building your seller profile while being a reseller can be a challenge. eBay and Etsy get more points here, as both these platforms allow you to make a seller page which helps your brand from a visibility perspective.

No interaction with buyers: Amazon does not give you any buyer database, so your customers will continue to buy from Amazon whether it’s from you or another seller.

Poor product visibility: On Amazon, many retailers sell products with the same ASIN (Amazon Standard Identification Number), so there is a good chance that your product might not get noticed and lose out to competition that has better ratings or prices.

Is Amazon the right marketplace for you? If your answer to at least four of the following questions is ‘yes’, then it is:

Do you have enough margins to sell through FBA?
Are sales and increased profits more of a priority to you than building a brand?
Can you afford to lower prices by a considerable margin to compete with other sellers?
Do you wish to sell through online marketplaces for an indefinite time period?
Can you fulfill an order on a short timeline?

Photo by Artem Bali / Unsplash

eBay

In business for over two decades and with website traffic running into billions of users, eBay is an attractive marketplace to consider.

Pros of selling on eBay

Global reach: eBay boasts a portfolio of customers from around the world who swear by its products and service quality. You get access to buyers across the globe the moment you list your products.

Ease of use: The interface used by eBay to list products and view inventory is intuitive and easy to use. Many retailers are of the opinion that eBay is the best case of a plug-and-play marketplace.

Integration of PayPal: PayPal makes it easy to accept payments in real-time, and the seller protection that it provides is a perfect value-add.

Cons of selling on eBay

Unstable fees: Depending on the add-ons to your products and how you choose to sell them, eBay’s fees can go up to a massive $250 in some cases. You may end up giving away all of your profits.

Payment issues: One of the biggest cons of eBay is non-paying customers. Due to check-out errors on the website, you may think you have made a sale but end up not making any money or shipping the product out.

Is eBay the right marketplace for you? If your answer to at least four of the following questions is ‘yes’, then it is:

Do you sell products that can garner global attention?
Do you have high-profit margins?
Will you be listing 50 products or less every month?
Can you showcase your product through a video?
Would you, in the future, want to set up your own store within a marketplace?

Photo by rawpixel / Unsplash

Etsy

Etsy is a handmade product haven. It offers the distinct advantage of catering to customers around the world that are looking for handmade goods. As a result, your buyer is already moving through the conversion funnel with the right intent.

Pros of selling on Etsy

Cheaper option: Etsy’s listing and selling fees are more in line with eBay. If you don’t need warehousing, then Etsy is definitely cheaper than FBA.

Well-targeted audience: People who come to Etsy know what to expect. Moreover, if the chief target audience of your products is women, then Etsy is the marketplace to be on.

Cons of selling on Etsy

No brand differentiation: On Etsy, all the shops look similar. Therefore, building an exclusive brand can be difficult.

Tough competition: There are multiple sellers selling the same products as you. Additionally, since the shops look similar, buyers can get confused between sellers.

Is Etsy the right marketplace for you? If your answer to at least four of the following questions is ‘yes’, then it is:

Do you specialize in handmade products?
Do you have the resources required to upload your products manually?
Can you forego some sales because of the high competition?
Do you have products that stay on the shelves for less than 3-4 months before new ones come in?
Do you plan to build your own web store in the future?

Photo by Charles 🇵🇭 / Unsplash

When it comes to selling online, there is no one-size-fits-all solution. Depending on your inventory, budgets and objectives, one or maybe all three marketplaces can prove beneficial.

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