Watching eBay and Amazon battle it out for market supremacy is going to get more and more interesting in the coming years. Since the dawn of e-commerce in the mid-’90s, the two companies have become titanic competitors, despite dealing with different types of merchandise.
Early on, eBay emerged as the dominant force, growing from an auction house into a clearinghouse for resellers. But in the intervening years, Amazon has distinguished itself as a monolithic retailer, outpacing eBay in terms of influence and total sales.
eBay's Moves to Compete With Amazon
The biggest thing these two companies really have had in common is the fact that the revenue for both eBay and Amazon is chiefly dependent on the sales of third-party merchandise. Beyond that, their offerings are notably different.
Amazon has become known as an outlet for new merchandise and everyday items, while eBay has primarily provided a platform for the sale of used items. The business model of both companies is continuing to evolve, however, and this is where things are bound to become more interesting. Amazon is sharpening its focus on shipping, continuing to innovate to push itself further ahead, while eBay is shifting gears in an effort to compete more directly.
Amazon has found tremendous success with its Amazon’s Fulfillment by Amazon (FBA) program. The company has built up a small army of resellers who deal in retail arbitrage, which essentially involves the sellers buying clearance items from brick-and-mortar retail outlets and shipping them directly to Amazon for resale. From there, Amazon handles storage, fulfillment, and shipping. In July 2109, eBay has announced plans to get into the game with its own Managed Delivery fulfillment service in 2020.
For its Managed Delivery service, eBay has partnered with “expert logistics partners” to warehouse items to store, pack, and ship products to customers. According to eBay, the service is geared toward sellers who deal with high-volume items such as electronics, home and garden accessories, and fashion. Perhaps taking a cue from Amazon, which plasters its branding on the boxes it ships, eBay’s packages will be delivered in eBay branded boxes.
Managed Delivery is one of the “three pillars” of the Managed Marketplace approach that eBay plans to implement to become more competitive. The company is also working on transitioning its sellers over to Managed Payments from PayPal, which is the current standard of payment processing on eBay.
With Managed Payments, all of eBay’s transactions will be managed in one place, and different payment options will become available for buyers. The third element eBay is working on is Managed Catalog, in which customers will be able to better search for products using streamlined listings that use artificial intelligence technology to deliver more refined choices.
How Amazon Continues to Innovate
Amazon, meanwhile, is putting its emphasis on shipping and delivery. In June 2019, Jeff Wilke, Amazon Worldwide Consumer CEO, gave a keynote talk at the RE:MARS (Machine Learning, Automation, Robotics, and Space) conference in Las Vegas, in which he offered an update on the progress of Amazon's drone delivery efforts.
As he showed footage of Prime Air Delivery Drone, the company’s autonomous electric drone that’s outfitted with thermal cameras, depth cameras, and sonar capabilities, he explained how the aircraft can deliver packages that weigh less than five pounds (75–90% of the packages delivered to Amazon customers) with a 15-mile radius within 30 minutes. Drone delivery is still years away from happening, but Amazon is getting closer to its goal, having been granted testing privileges in designated areas for a year by the Federal Aviation Administration.
In the meantime, Amazon is working on perfecting its own delivery process. According to reporting from CNBC, Amazon has amassed a fleet of 50 airplanes, 300 semi-trailers, and 20,000 delivery vans, as it moves away from third-party delivery services. And the company is continuing to hone automation efforts at its 175 fulfillment centers across the country.
The Benefits of Shopping With Amazon
There are numerous distinct advantages to shopping on Amazon versus eBay, particularly if you sign up for Amazon Prime, which runs $12.99 per month. Prime subscribers (100 million and counting) are eligible to receive free same-day delivery (in select cities) and one- or two-day shipping on 100 million different items. With a Prime membership, you also have access to stream music, watch movies and TV shows, try clothes on before you buy them, order two-hour grocery and restaurant delivery, get scheduled in-home and in-car delivery, and take advantage of discounts at Whole Foods, along with getting 20% off of diapers, baby food, and more.
Although Amazon and eBay both have apps with image recognition capabilities (you can take a picture of an item, and it will search for results similar to your item) making shopping simpler, Amazon offers the added convenience of Alexa, its voice service. Instead of having to visit Amazon’s website, log into your account, search for an item, and put it in your cart and pay for it, you can skip a few steps. If you have an Echo smart speaker (or Amazon Fire smart TV, Firestick or tablet), you can place orders with simple voice commands such as, “Alexa, please order shampoo.”
Another big advantage is the payment processing when you place an order. Unlike eBay, which currently relies on PayPal for its processing, Amazon offers multiple payment options, including:
- All major credit cards
- Electronic payments with checking account
- Flexible Spending Account and Health Savings Account Cards
- EBT cards
- Amazon.com store cards
- PayPal Cash and business debit cards
Returns are also easier with Amazon. Any items ordered from Amazon.com can be returned for a full refund within 30 days of shipment. Any product purchased with Alexa is also eligible for free return through the return center. Amazon will automatically reimburse the cost of shipping any items within seven days of receiving your refund for the product you originally purchased.
Buyers can also take advantage of the collective critical takes of other Amazon customers who frequently add reviews of the different products being offered. So rather than just wondering if an item will meet your expectations, you can see how other consumers feel about the product and make a more informed decision.
The Benefits of Shopping on eBay
Although it is making strides with the overall shopping experience to compete with Amazon, eBay still has the best game in town when it comes to getting deals on used items or finding one-of-a-kind items or vintage stuff. Shopping on eBay as opposed to Amazon is like shopping at the flea market versus the mall. As such, the selection of what’s being sold is just massive.
eBay has an incredibly wide variety of stuff, whether it's antiques, collectibles, clothing, shoes, games, collectible coins, sports memorabilia, musical instruments, consumer electronics, cars, boats and trucks, industrial equipment, or real estate. You name it, eBay’s got it. Regardless of what you’re looking to buy, chances are you’ll find somebody selling it at a price that’s usually negotiable. With Buy It Now and Best Offer options, you can typically find what you’re looking for at a fraction of the retail price.