We would find it very hard to believe you haven’t at least heard of these three major marketplaces.
In this article, we take on the perspective of a seller who wants to find out which platform is best for them to use for their online business.
We cover how sellers can use each platform, their key features and how they differ from another.
For each platform, we also take a look at:
- Seller fees
- Order fulfillment services
- Level of competition
By the end of this article, we hope you’ll be able to make a more informed decision about which marketplace is the best for your needs!
In this article we talk a lot about dropshipping, which is a popular business model where sellers list items online that they don’t actually have the physical stock of.
‘How does that work?’ you might be thinking. Well, with dropshipping, your suppliers will manage your order fulfillment process from picking and packing orders to shipping them out to customers. You just have to list the products online and market them effectively to get people to ‘add to cart’ and purchase them.
AliExpress, Amazon and eBay can all be used by dropshippers for differing purposes, which we will soon get into.
Another common online selling method is buying products in wholesale to resell. Just to make it clear from the get-go, while the platforms we look at in this article have some fantastic uses for both online buyers and sellers, none of them are the place for wholesaling. If you’re interested in that side of things, you may want to have a look at Alibaba or DHGate.
Now that we’ve prefaced what you can expect, let’s get right into the interesting stuff!
To start, we have come up with a more in-depth comparison table:
|Multiple Shipping Options
|Order Fulfillment Service
|Mobile App Available
What is AliExpress for?
AliExpress is a mega marketplace that you can use to source products to dropship. It has an extensive (and by extensive, we mean in the millions) product range and offers some of the cheapest prices to be found online - enough to make your eyes widen, in many cases.
If you use AliExpress to find a unique product that will solve a problem for your target customers, then you can easily start making money dropshipping it.
What about selling on AliExpress directly? While this is possible, we wouldn’t recommend it in most cases. This is because if you are reselling products on AliExpress (especially if they are sourced from AliExpress) then you will face stiff competition. Conversely, if you sell higher quality products on AliExpress sourced from, say, a US supplier, then you may not get many sales. Why? Because people coming to AliExpress aren’t typically looking for good quality US products, but instead cheaper ones produced in China, which is what the platform is known for!
You’d be better off listing your products on another platform (like Amazon and eBay), which is what we’ll look at soon.
In the next section we do a quick breakdown of the key features of AliExpress that business owners should know about:
Key features of AliExpress
- Cheapest products: It would be hard to find cheaper products anywhere online. This may be the key feature that makes AliExpress such an attractive place to find products to dropship.
- Huge selection: AliExpress has an almost inexhaustible range of products, giving you plenty of room for trial and error and finding new product ideas.
- Extensive search filters: With an ample range of search filters, AliExpress makes it easier to find the products you want.
- Non-vetted suppliers: AliExpress does not vet their sellers, which means that you need to be careful when selecting suppliers to work with. We recommend ordering product samples first.
- No order bundling: There is no way to bundle orders with more than one product, unless those products have the same supplier. This means your customer will receive multi-product orders in separate deliveries which can mean multiple delivery fees.
- Long shipping times: AliExpress states that shipping can take 15 - 45 days. Because this excludes weekends, your customers could be waiting 60 days in total for delivery (that’s 2 months!)
- Lengthy returns process: As a dropshipper, you will be in charge of handling your returns. This means your customer will need to ship their return to you before you can then ship it back to your AliExpress supplier. This process can be lengthy.
- Potential language barrier: Most AliExpress suppliers speak English, but not all speak it fluently which means some may be difficult to communicate with.
Screenshots of AliExpress
Who should use AliExpress?
AliExpress offers a treasure trove of potential products to dropship, but there are certain considerations to be made.
Because suppliers aren’t vetted, you are facing a whole spectrum of differing quality - and it's up to you alone to determine which suppliers to work with. We suggest ordering product samples before taking your relationship with suppliers further. It’s also important to review seller refund and order policies thoroughly to ensure you aren’t going to get stung.
While you can definitely benefit from the cheap prices on offer, make sure it doesn’t come at a greater cost further down the track of unhappy customers who aren’t receiving their orders or are otherwise unhappy with the quality of them.
A solution could be to use a tool which pre-vets dropshipping products. This could save you a lot of time and give you greater confidence about selling these products under your own business’ name.
What is Amazon for?
As a highly trusted online retail marketplace, with huge amounts of monthly traffic, Amazon could be your key to finding and attracting customers, especially in your early days as a business owner.
Sellers can opt in for Fulfillment by Amazon (FBA) where Amazon will store, pack and ship your inventory for you, reducing shipping times and making life easier for you as a business owner. For the privilege of using this service, you will need to be an Amazon Professional seller ($39.99 per month) and pay an additional fulfillment fee per sale, but in most cases, this is worthwhile because of the time it saves you.
So, we’ve figured out that Amazon is definitely a viable option for selling online, but what about the costs?
In order to sell on Amazon you will face two fees, a fixed per-item fee or a monthly membership fee and a referral fee.
If you are on an Individual seller plan then you will pay a fixed fee of $0.99 per item sold. To avoid this fee you can become a Professional seller, paying $39.99 per month. Professional membership would be worthwhile if you are selling more than 40 units per month ($0.99 x 40 = $39.60).
The second cost is the referral fee, which ranges from 6% (Personal Computers) to 45% (Amazon Device Accessories) as a percentage of the item’s sale price. These fees are determined fairly, where products with lower profit margins and higher sale value (such as computers) face lower fees, while if you are reselling Amazon brand items, then you will pay them a larger fee.
While these fees are generally higher than eBay’s, there are some key differences. On Amazon you only need to pay the fixed fee if your item sells. Additionally, you only face the really steep referral fees if you are reselling brand name Amazon products, otherwise referral fees are generally only slightly more than on eBay.
Additionally, Amazon purchases can be completed without leaving the platform (unlike eBay, where you pay via PayPal) and there are good security features to ensure that sellers actually get paid without any issues. This and its higher volume of traffic is likely to make the slightly higher fees worthwhile.
Key Features of Amazon
- High traffic volume: In 2021, Amazon was the most visited eCommerce site in the USA. That means millions of monthly visitors and potential customers.
- Set prices: You sell items on Amazon at a fixed price, which gives you full control. On eBay, many products are auctioned, which offers less control.
- Streamlined product galleries: Your products will be listed in a uniform manner right there alongside Amazon’s own, creating a sense of cohesion for buyers.
- Trusted: Amazon is a reputable company, which means that you might have a higher chance of closing sales there than on your own business website, which customers may feel uncertain about.
- Fair fees: Amazon has a fair fee structure which depends on the category of the product sold. The referral fee can be as low as 6% of the value of the sale.
- Fulfillment by Amazon: Amazon offers an order fulfillment service where you can ship your inventory to them to be fulfilled for you when a customer places an order. You will face an additional fee per order for the privilege.
- Lots of competition: Amazon is a huge marketplace, which means lots of competition. You really need to differentiate your product to stand out, or to attract customers via alternative marketing channels rather than just through Amazon.
- Price undercutting: On Amazon, generally the sellers with lower prices win the customers, especially if their items are similar or the same as their competitors. This creates an incentive for suppliers to continuously undercut each other’s pricing. However, this does not benefit any seller in the long term.
Screenshots of Amazon Marketplace
Who should use Amazon?
Amazon is a great place for new business owners to try their hand selling on a reliable platform that draws in major traffic.
The flexibility of Amazon allows you to sell on their platform, while also selling on your own business website (just be careful about your inventory numbers), which means you can make sales through multiple channels.
Amazon can be a good place to establish your credibility and get some customer reviews before you may decide to start driving your customers to your own website where you don’t have to pay seller fees.
What is eBay for?
eBay is less than a year younger than Amazon, launching in 1995. While it has long been known as an auction site, as opposed to a retail platform, over recent years it is beginning to resemble Amazon, with more buy-it-now listings and streamlined product galleries.
eBay, like Amazon and AliExpress, has a global reach and is well trusted. eBay supports customers being able to contact sellers should they have any queries they haven’t been able to find the answer for, which is not offered by Amazon.
Unlike Amazon, eBay does not offer an order fulfillment service. In 2019, they tested a pilot fulfillment service called eBay Managed Delivery, but it fizzled out and since then nothing of the sort has been offered by eBay. You can, however, choose to work with third party distributors who integrate with eBay, such as Deliverr or Huboo.
Selling on eBay you will usually face two fees: the insertion fee (when you list an item) and a final value fee (when you sell an item). As with Amazon, the amount that is charged depends on the selling price of the good.
The insertion fee is a set fee charged per item if you sell over 250 items per month. If you don’t sell over this volume then you will not need to pay this fee. This fee depends on the value of the good, its category and any listing upgrade features you use.
The second cost is the final value fee, which all sales are eligible for. This fee is a fixed value of $0.30 + a percentage of the sale price. This is generally 3 - 15% for lower ticket items, whereas sales over certain thresholds such as $7,500 face lower fees (0.5 - 9%).
It’s tricky to directly compare eBay and Amazon’s fees as there is so much variability. This difficulty may be deliberate on the part of the two eCommerce giants as they don’t want to make it easy for sellers to favor one over the other. It could be said that, in general, you will pay higher fees on Amazons, though.
Key Features of eBay
- Auction pricing: You are able to sell products on auction, where customers place bids instead of buying right away.
- Buy-It-Now pricing: You are able to set fixed prices for your items.
- Less cohesion: eBay product galleries are less uniform than on Amazon, which creates the feeling of it being a marketplace made up of third party sellers.
- Fair fees: eBay has a fair fee structure, which is based on the order value and category. Its fees are generally lower than Amazon’s.
- Trusted: eBay, while it may not be as beloved as Amazon, is generally trusted.
- Option to contact seller: Customers will be able to reach out to you with any additional queries that have not been answered on the product description.
- No order fulfillment: eBay does not have an Amazon FBA equivalent, which means you will either need to fulfill orders yourself or enlist a third party that integrates with eBay to do it for you.
Hint: SaleHoo pre-vets millions of dropshipping products and suppliers, so you can skip the need for samples and get right into the good part - actually selling! Find out more about SaleHoo Dropship.
Screenshots of eBay Marketplace
Who should use eBay?
eBay is a reputable marketplace that provides a great opportunity for new sellers to get on their feet and start making some sales.
Even though it may be frustrating that eBay doesn’t have its own fulfillment service, there are plenty of third party options out there.
eBay does appear to be taking Amazon’s lead in a lot of areas, so it is definitely worthwhile considering using the platform. You may even want to sell on both to see which one you like better.
At the end of the day, you don’t have to choose between these platforms. You can actually use them all at the same time!
However, alternatives do exist, which you may also want to find out about. In the box below we have linked to our most up to date list of the best places to sell online.
Wow, we’ve made it to the end! Have any further questions about how AliExpress, Amazon or eBay might be able to help you? Reach out to our live 24/7 customer support team and we will be happy to help you out.