If you are just venturing into eCommerce, the biggest question on your mind is choosing the most profitable marketplace to use. Online marketplaces such as Etsy and eBay have disrupted the way consumers shop. And even if you have a brick and mortar shop, it’s expedient that you follow the trend and establish your business online.
You have the option of setting up your own store using a platform such as Shopify or going the way of selling your products on online marketplaces like eBay, Esty, and Amazon. Marketplaces are ideal for beginners since they have a ready market for your products and spend millions of dollars to drive traffic to them. There are other advantages and disadvantages to both options, but that is another topic altogether.
If you have decided to go in favor of selling on online marketplaces, bear in mind that competition could be fierce with lots of other people who sell the same stuff you do jostling for a share of the market. Hence, you must start off with the right marketplace optimized for the type of merchandise you sell.
How to choose marketplace based on your products
eBay and Etsy are two marketplaces popular with the eCommerce crowd. Due to their popularity as the two largest online marketplaces, you may want to ask, “if the duo are competitors?” It is common to hear people asking, “what is the difference between Etsy and eBay?
Etsy vs eBay: The Major Differences
To understand the differences between Etsy and eBay, we have to consider major differences in their operational policies, sellers’ opportunities and liberties, payment policies, and other criteria.
Line of products
Take it this way, one of the most noticeable differences between the two largest online marketplaces is the diversity in their areas of products they sell and the types of audiences they attract.
Identifying this difference and selecting the right platform is a considerable determinant of your success in eCommerce. But as a newbie, you may find that tough. But it’s not that hard.
Etsy permits sellers to showcase only handmade products or items that are over 20 years old. This makes Etsy very unique as an online marketplace, attracting a special audience.
However, eBay is an open online marketplace where anything sellable can find its way in. This gives eBay a multi-purpose edge where you can easily find a large range of products both brand-new and used.
Start by researching your target audience. Find out what works for them, and why they buy what they buy. Then look at the items you intend on selling
If you’re looking for an online marketplace to sell your wholesale items, vintage products, antiques, handmade items, and other items, Etsy will be your best bet. If you have a large range of different range of products, eBay will accept them and create a site for all the items because of their flexibility policy.
Etsy vs eBay: Product Offerings
When you have identified your products and studied your target prospects, it’s time to see whether they conform to the type of item Etsy or eBay specializes in. This is most especially true with Etsy. Let’s profile their product types:
Etsy was created to sell 3 broad categories of products – vintage items, handmade goods, and craft supplies. As clearly stated on Etsy’s home page – “If it’s handcrafted, vintage, custom, or unique, it’s on Etsy.”
Vintage items sell particularly well on Etsy. Think ’80’s fashion, vintage jewelry, and other knick-knacks. Note that items have to be older than 20 years old to qualify as vintage on Etsy.
The second category of products sold on Etsy is handmade goods, which gives the site a definitive boutique feel. It’s ideal for you if you love to sell or create unique, one-of-a-kind items.
Etsy also hosts sellers who deal with supplies and tools used by artists, designers, and craftspeople. That is, the stuff used in making the handmade goods and crafts that Etsy is known for.
In contrast to the uniqueness that is the hallmark of Etsy, eBay is more of a mass-market marketplace. They offer a wide variety of goods ranging from used items, antiques, and vintage to brand new, mass-produced products.
eBay is more concerned about building a marketplace where you can get any product you can possibly think of at a bargain. Their target customers are searching for good deals rather than unique finds. This makes it intensely competitive since your products are being sold by hundreds of other sellers. eBay is more flexible and will allow you to sell a diverse range of merchandise on the same site.
The different offering by eBay and Etsy creates two clearly defined categories of customers. The trick to generating sustainable sales is to use the platform that your target prospects prefer. The two platforms are great for selling online, but you must sell the right type of products.
Product pricing is another factor you need to check before deciding on a marketplace. Etsy favors higher-priced products. While selling costly items on eBay might not get as much traction as selling them on Etsy since eBay customers come to the site expecting bargains and rock-bottom prices. But then, if you want a higher sales turnover, eBay is the way to go.
Etsy vs eBay: Fee Structure
- Transaction Fees: Every sale you make on Etsy attracts a 5% transaction fee of the displayed price and includes the amount you charge for shipping and gift wrapping.
- Listing fees: Etsy charges a non-refundable listing fee of 20 cents for each item you list. The listing fee expires after four months and can be renewed at the same price. Relisting sold items also costs 20 cents, and there are no fees for editing a listing.
- Subscription Fees: Etsy offers reputable sellers an opportunity to sign up for Etsy Plus, a premium subscription package that gives you additional tools and support to grow your brand. An Etsy Plus subscription will cost you $10 monthly.
- Insertion or Listing fees: eBay charges 30 cents to list an item. However, sellers enjoy zero fees for their first 50 listings.
- Final value fees: This is what eBay charges for each sales transaction. The fee is calculated as a percentage of the total amount the buyer pays, including shipping and handling charges. The sales tax is not included in this calculation. The final value fee for most categories on eBay is 10% (up to $750)per sale. Books, DVD/movies, and music CDs are charged at 12% (up to $750) while heavy machinery is charged 3% (up to $300) and music gear 3.5% (up to $350).
Before you decide finally on where to sell your products, you need to consider their fee structure. How much will it cost to list an item, relist, and ultimately sell a product?
It is a known fact that eBay charges more operational fees than Etsy. eBay charges seller’s insertion fees (membership fee), final value fee, and still take a portion of whatever you charge for shipping. On the other hand, Etsy is open with its sellers’ fee policy. They don’t charge any membership fee meaning there is no insertion fee.
Not factoring in the cost of doing business in any marketplace is negligent and will ultimately cost you.
Pros and Cons of Etsy
- Higher margins: Since items generally sell for higher prices on Etsy, and you can make more profit per item sold by trading with a higher margin. This niche-based shopping limits the number of users on Etsy. Unlike eBay customers that flood their website looking for a bargain, shoppers in Etsy are more prepared to pay a little higher for their chosen items.
- The large targeted base of active buyers: Although not as large as eBay, Etsy is a sizable marketplace with about 40 million active buyers who are interested mainly in boutique and handmade products. Etsy operates globally too with office bases in Australia, France, Canada, Germany, UK, Ireland, and the US. You listed unique antiques, handmade crafts, and other interesting items that get international attention and popularity to attract interested buyers. Etsy users are in nearly all the countries of the globe. Their pre-defined audience makes it easier to get sales.
- The easy brand set up: As a seller, you can set up a brand in minutes complete with payment options without any knowledge of CSS or HTML.
- Easily list items and ship to buyers: Listing items on Etsy is a breeze. It is very simple, and cheaper than eBay and it is fixed for all items. You pay no membership fee. For every item you want to list, you pay only 20 cents and that covers your listed item for a period of 4 months. If perchance the item is not yet sold at the end of the 4-month listing period, you renew with another 20 cents for the same period of time. You can also quickly generate shipping labels and ship orders to buyers.
- A wide variety of payment options are available: Buyers have a variety of payment options to choose from. These include Apple pay, Google pay, PayPal, and more.
- Active community forums: Sellers have a lot of community forums where they can go for solutions to issues, learn, and connect with others.
- Excellent customer service: Quick response to sellers issues and round the clock support.
- Risk of being copied: It is so disheartening seeing unscrupulous people infringing on your unique brand and product on Etsy. Your wonderful ideas can blatantly be copied and make a rebrand of your products especially when it is doing very well in the marketplace. These copycats go further to make their copies look exactly like your original brand in features, colors, and photos. They may eventually offer the copied item at a far cheaper price. This unethical practice can dampen the zeal of a creative seller.
- Listing products can be time-consuming: Each product requires a separate listing to be created, which takes up time and resources.
- High fees: Etsy’s final sale charge of 5% is lower than eBay at 10%, but it can go higher with another 3% payment charges and an additional $0.25. These additional fees still make the fees high. This arrangement will add up to make to affect the selling cost. In addition, there are PayPal processing fees, which can significantly add to overhead costs.
- Lots of promotion required to sell items: If you have less than a hundred items listed on Etsy, you’ll need a lot more advertising to sell them.
It is not all a bed of roses when deciding on Etsy or eBay for your items. You need to check what the downsides of each of the two marketplaces are before deciding.
Pros and Cons of eBay
- Broader marketplace: Unquestionably, eBay has a huge potential for its sellers as millions of both old and new users access their online website for shopping. With over 180 million active users and 25 million sellers, eBay is a marketplace with great potentials for these sellers to reach millions of potential buyers worldwide.
- Easy product listing: It takes little effort and time to list products since product listing can be duplicated allowing for better visibility of your items and consequent sales improvement. You can enjoy efficient and straightforward sales of your products through the effort of the listing manager.
- Wide sales outreach and more global audience: eBay has greater international popularity and will display seller’s listings to customers around the globe. This gives you an edge because you can sell products that are not available in some parts of the world. Your products can potentially become more popular.
- High fees can add up: What you want to sell on eBay depends so much on fees you are charged. Though the start-up fee of 35 cents is low but higher than that of Etsy which is only 20 cents. The listing fee of eBay is not fixed unlike that of Etsy. Also, the final sale charges are really high at 10% compared to 5% charged by Etsy. If you make sales of $3,000, 10% is $300 while on Etsy it is only $150. Although, there are still some other charges over the shipping arrangement. Therefore, selling more expensive products means you lose more money than if you sell through your own store.
- Buyers unreliability: Some buyers may commit to making a purchase but fail to go through with it. The platform allows the buyer the choice of not paying straight away. This can be expensive and a waste of time if it frequently occurs, which it sometimes does. A common occurrence of this incidence can frustrate a seller and consequently dampen his trust and confidence in the marketplace.
- Dispute resolution favors buyers: To keep their customers, eBay tends to support them over sellers in disputes putting the sellers at the receiving end. This has led to increasing complaints by sellers. Despite a recent move by eBay to rationalize this issue, sellers too are allowed to post their feedback. But this does not really rationalize disputes in regards to shipping, postage and missing items which still favor the buyers’ interest than the sellers.
Etsy vs eBay: Which Is Better for Your Business?
With no much ado, your line of products is the first criteria to look at before you know if eBay or Etsy is better for you. Again, your sales expectation is another thing to consider. Are you expecting to sell large volumes of ‘relatively cheap items? Or is your expectation is to sell some-worthy unique items? Then, you have to consider how quickly you want to sell your products.
Selling your items on eBay may be quicker than Etsy but that also depends on the niche of your product. The cost of selling your product at eBay is much higher than Etsy due to various fees charged by eBay.
As a budding eCommerce entrepreneur, online marketplaces like eBay and Etsy offer a quick and easy platform for you to start selling. However, you need to research your products and target customers to ensure that you only sell items that qualify for a particular marketplace. This could mean the difference between failure and success of your online venture.
But as you learn the ropes with time and become more experienced in eCommerce, you can consider building your own online store. Shopify and WooCommerce are some of the many platforms that allow you to create and run your own store. While selling on the marketplaces offers you more exposure for your products, running your own store places you in more control, and you won’t have to pay the high fees associated with selling on eBay or Etsy.
No system is completely faultless; eBay and Etsy are no exception. With the above well-articulated analysis, you are adequately guided to understand and make an informed decision of which of the two marketplaces will serve your interest better. The choice is absolutely yours.