SAN FRANCISCO — EBay’s once-loyal merchants are moving more of their business to Amazon.com, saying they get more for their money by selling merchandise via the Web retailer.
Amazon’s pool of merchants doubled to about 2 million in 2014, while the number of sellers on eBay has remained flat at 25 million in the past two years. Businesses that at first set up online storefronts on eBay say they’re surprised how quickly sales surge on Amazon once products appear on both sites.
The move to Amazon, which boasts a bigger user base and offers more ways to ship merchandise, poses a threat to eBay, which pioneered the idea of an Internet marketplace where merchants big and small could hawk wares.
“We saw sales drop 10 percent on eBay and gain 10 percent on Amazon,” said Chance Knapp, chief executive officer of Vivo Technology, a laptop parts and accessories business, about a few product lines he moved last year. “It was like customers were actually shifting from eBay to Amazon.”
EBay is already under pressure, chalking up lackluster holiday-quarter sales and suffering a marketplace traffic slowdown that CEO John Donahoe blamed on changes in the way Google handles shopping-search results. EBay is spinning off its PayPal division this year after pressure from activist investor Carl Icahn, who lamented sluggish gains in the online shopping division.
Moving storefronts doesn’t come cheap. Amazon charges a premium for its logistics services, which include storage, packaging and ensuring products are shipped in a timely manner. Both companies have complex price formulas that vary by product category. While eBay typically charges about 10 percent of each item’s final sale price, Amazon takes 15 percent in most cases, with additional fees for optional storage and packaging.
Many sellers say Amazon is worth the extra expense to achieve greater sales volumes and that it’s cheaper to let Amazon handle logistics than do it themselves.
ChannelAdvisor, a Morrisville, North Carolina consulting company that helped 3,000 merchants sell $6 billion in merchandise last year, saw the migration to Amazon from eBay begin last year. Slowing sales growth on eBay encouraged sellers to move inventory to Amazon, and the gap widened, according to Scot Wingo, ChannelAdvisor’s CEO.
By the last three months of 2014 — critical for retailers because of holiday shopping — ChannelAdvisor saw its clients’ Amazon sales rise 33 percent from a year earlier, compared with 5 percent growth on eBay.
“EBay remains a good part of the business, but it’s on life support and the growth is on Amazon,” Wingo said.
Chris Matsakis, president of daily-deal site DealGenius.com in Chicago, said that as recently as 2013 sales on eBay exceeded those on Amazon’s marketplace. Last year, his revenue via Amazon grew fivefold, and are now four times greater than sales on eBay, he said.
“We’re seeing significant growth on Amazon where eBay has sort of plateaued,” Matsakis said.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
