eBay vs. Amazon: More Than Just Rivalry

Amazon and eBay, so similar but so different.

Both have a successful eCommerce platform that serves millions of people, however each one has its own different philosophy and vision which will determine the kind of company they are and their future impact on our economy and life (for the best and for the worst).

Amazon, prefers buyers over sellers

Amazon works as a retail store that has to be in control over its inventory. It offers today about 100M different items for sale. This is a huge number compare to offline retailers but compared to eBay, its is a very low number (eBay offers over 1 Billion items).

Tough Amazon opens its eCommerce platform to many sellers, they treat them just like suppliers and less like partners. Whoever tries to sell on Amazon will find a very demanding process that includes many steps and regulations to follow.
Whoever do sell on Amazon, knows that Amazon doesn’t really care about its business too much. Amazon first decides what is best for Amazon profits and for its buyers and only then give a room for other sellers. Amazon competes with its own sellers by promoting Amazon’s inventory over others, it means that Amazon is not a real fair marketplace for sellers.
The only way sellers can compete and promote their inventory is by creating a sponsored listings, meaning, paying Amazon for advertising listings in higher search results ranking. Therefore sellers have to pay more in order to compete with Amazon, on Amazon website. Not surprising that Amazon became the 3rd biggest online advertiser in US after Google and Facebook.
Needless to say, these strict regulation and unfair ecosystem deters many sellers from using Amazon, and in particular casual sellers that would like to sell unique and 2nd hand inventory.

To sum it up, Amazon is first of all a retailer, it think and act like any retail store by putting all their focus on buyers. They don’t care about offering everything, they don’t care about small sellers, and they don’t mind competing with their sellers and put them out of business.
For me this is the essence of Capitalist thinking, profit above everything by delivering a great buying experience on the expense of not being an inclusive fair place for small businesses.

eBay, stuck between buyers and sellers

eBay was founded more than 20 years ago as a marketplace where anyone can buy and sell their stuff. Today, eBay continues to invest in maintaining this image of being the place for everyone, where you find anything you want and can sell almost anything you want. We can find on eBay new, used and refurbished items, branded and unbranded items, devices, spare parts and accessories. As of Today eBay has over 1 Billion different items for sale, which is huge, 10 time more than Amazon.
This vast offering is not an easy task to manage, in particular when it is offered by over 25 million sellers from all around the world. eBay invests greatly in making it easy to search on site, to have great prices and a fast delivery. In most cases eBay is doing great and anyone can find great bargains that will be delivered very fast. However, because of the crazy amount of different sellers, including such who sell 2nd hand items, eBay cannot maintain the same value proposition as retailers like Amazon.

eBay CEO, Devin Wenig, repeatably expresses his vision that eBay is not Amazon and won’t be one. Wenig says that eBay has to maintain its position as an inclusive place for everyone to buy and sell anything. The practical meaning of this decision is that eBay is trying hard to balance the need of having a great buying experience and the need of giving a place for any seller to sell very easily its items, and with a fair chances to compete.
Not meeting the new buying standards in the market as set by Amazon has taken its toll, sales growth wasn’t high enough and eBay, tough it grows every year, has lost market share to Amazon.

By maintaining the “Socialist” promise to small and big sellers alike, on the expense of its competitive capabilities, eBay is facing a tough decision that it has to take.

Critical decisions that have to be done by eBay and Amazon

Both eBay and Amazon operate in a capitalist world in which profits are mainly invested in the growth of the companies. Even tough both are eCommerce giants, they differ in how they treat their most important partners – their sellers.

Amazon has redefined the rules of global eCommerce by setting the buyers expectations very high. Amazon is very focused and has a clear capitalist agenda that pays off tremendously, it is getting stronger and stronger on the expense of brick and mortar small businesses (and online small competitors as well). Tough Amazon has some Social initiatives, its long term impact on the economy and its workforce is very significant (and not only for the better).
I am expecting Amazon, as one of the biggest retailers in the world, to understand its potential negative impact on the economy and on the welfare of many people and do the needed corrective actions without the need of a government intervention (that may not arrive).

eBay, on the other hand, is in a place where it must take some critical decisions in order to continue growing:

1. eBay can choose to play according the Amazon’s redefined rules and change its core “Socialist” values to a more “Capitalist” ones. Meaning simplify its inventory offering, invest in logistics and have stricter rules for sellers who want to sell on eBay.
2. eBay can maintain its values and find a different way to the buyer’s heart. For example, eBay can invest much more in nurturing markets where Amazon does not operate, like the 2nd hand market that is screaming for a disruption – check my previous article about “How Can eBay Dominate The C2C Market For Years?“.

eBay has to understand that the market has changed and it is never late to redefine the type of buyers it would like to serve. This critical courageous decision by a giant like eBay will reshape the industry and can open the door for eBay’s new future.

On a personal note

All of us will be impacted by Amazon and eBay decisions, or the lack of decisions. I truly hope that Amazon knows that it carries a great burden on the shoulders and it has a great responsibility for the entire international economy and community.

eBay has the responsibility to stay strong and be the balancing force to Amazon. In order to do that, eBay has to change and I really hope it will not compromise its core value of being an inclusive place for all of us.

If you’ve read it till here, it means that you might found this article interesting. I would appreciate you personal opinion on my ideas, share, like, comment as much as possible 🙂 Thanks. Ori.

Ori Feldstein is a senior manager, experienced in eCommerce and in management of multi-million dollars programs in various industries – Big data, e-commerce and Defense. He is a co-founder of two family owned websites in the B2B eCommerce of chemicals (cheta.biz ; chemcenters.com). Follow him on Linkedin, @ori-feldstein. 

Disclosure
This article does not represent eBay/Amazon and their business information in any way. This Article share my personal opinion regarding eBay and Amazon as key players in the eCommerce market based on public sources, and my own opinion and insights regarding future opportunities in the eCommerce market.