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Selling on Amazon.com vs. Ebay - A Seller's Guide

ronpete
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Did you know that some of the top keywords entered into search engines, such as google.com, are "Ebay," "Amazon," and "Half.com?"

I am an Ebay Power Seller.  I used to sell on Amazon.com.  I make more money on Ebay because Amazon.com charges $40/month to list on their site and then they take 15% if you sell anything.

For example if a $105 DVD Set sells on Amazon - they take as a commission - $16.40 and only reimburse you $2.49 for shipping.  As you know a $100 DVD set costs more to ship via Media Mail than a single DVD but Amazon expects you to cover the difference.

There are some benefits to selling on Amazon:

  • More exposure for your products
  • Easy uploading and downloading of information
  • Lengthy informative emails when an item sells
  • Many reports you can access on Amazon
  • Free Amazon Auction listings
  • Amazon handles payments from customers and reimburses you monthly or bi-weekly via direct deposit
  • Customer Feedback that rate you as a seller
  • Zshops

Let's face it.  When it comes to selling books and videos Amazon attracts millions of customers.  Ebay, on the other hand, attracts millions of customers but has several more categories than Amazon.  Ebay is an auction site.  Amazon is primarily a bookselling site with mainly new books, audio books and videos.

Amazon provides sellers with a template for uploading inventory.  The template is easy to download.  It is in Excel Format.  Amazon also provides detailed, printable instructions.  The template is easy to use.  There are only 11 column headings that you must use. (I believe Ebay has more in their File Exchange Template and it is more complicated).

The following are the headers required on the Amazon.com Excel template:

Product-ID; Product-ID-Type; Item-Condition; Price; SKU; Quantity; Add-Delete; Will-Ship-Internationally; Expedited-Shipping; Item-Note; and Item-Is-Marketplace

After you cut and paste your product information into Amazon's template in Excel, you must save it as a text file.  Then you upload it to Amazon.  Easy.  There is however, a glitch when you want to list an item that Amazon does not have a matching UPC/ISBN number, etc. - it doesn't get listed!  If you want that product listed - you must list it by hand on Amazon and upload a picture.  It is time-consuming.  When you need to update your listings - or need to do a purge and replace - these handmade listings are deleted. 

In addition, when you do a purge and replace or send a file with the above template as deletes and not adds - it does not always work.  To ensure your items are deleted you must mark the quantity as 0 in your file before uploading.

Amazon, like Ebay has many rules and regulations you must follow.  They will not accept Adult items unlike Ebay which has a Mature site. 

Amazon has an awful customer feedback system.  Ebay has a great customer feedback system.  Everytime I log onto Ebay and go to My Ebay - I am constantly reminded to leave feedback etc.  This is great.  Leaving feedback for Amazon sellers is purely optional.  It is also cumbersome - you have to go to different screens, etc.  Because it is so cumbersome at Amazon, the only customers that will leave feedback are the dissatisfied ones.  The happy customers don't do anything.  If you want anyone to leave positive feedback for you on Amazon - you must email them with your request - which they can choose to ignore. 

Amazon's feedback system is unfortunate for Amazon sellers because negative feedback determines whether you can sell on their site.  If a seller is only getting negative feedback because no one is leaving any positive feedback, Amazon will close your seller account via computer generated form letter.  They do not call.  They do not have a phone number for you to call.  There is no contact name on any of their form letters.  They don't suspend your account for 3 months like some sites do and then give you a second chance - they just close it and hold your payments for 90 days!  I know this because it is happening to me right now - an Ebay Power seller with 99% positive feedback - selling on Ebay for 7 years.

The following is what happened to me.  I uploaded a DVD catalog (50,000 titles) into Amazon's template and site from a reputable Video Distributor.  In 2 days I had 98 orders (the more you list on Amazon and Ebay - the more you sell).  Unbeknownst to me all of these titles are very hard-to-find.  I started ording the titles from my distributor and they did not have any in stock - everything was backordered.  I called the distributor and was told that I would have my 98 titles in 2 weeks or less.  I immediately deleted their 50,000 title catalog on Amazon because the orders kept coming in and everything was on back order. 

I emailed all 96 Amazon customers and offered to refund their money if they didn't want to wait the 2 weeks.  About half the customers wanted refunds, while the other customers wanted to wait.  I was then informed by a customer that I was supposed to ship my product within 2 business days and not list items that I did not have.  This person then contacted Amazon and left negative feedback - along with all of the other unhappy customers. 

When you order something on Amazon - they take your money upfront.  They don't give sellers a chance to notify the customer that an item is out-of-stock or backordered before money changes hands.  Therefore, Amazon customers get really angry that their credit card has been debited when a seller does not have the item for the customer immediately.  Negative feedback follows and your status as a seller becomes very negative.  You then start receiving Amazon form letters via email.   Here is an example of one:

Greetings from Amazon.com.

We are writing because it has come to our attention that you may not be completing transactions due to stock-outs.

We ask that merchants keep their Amazon.com listings updated to reflect real-time inventory. We realize that from time to time the availability of merchandise may change by the time a purchase is made online. However, we ask that you minimize these occurrences.

Please note that should we continue to receive reports from buyers whose transactions have been cancelled by you due to outdated listings, it may negatively affect your selling account.

Thank you for your cooperation and your interest in Amazon.com.

Regards,

Item and Seller Quality

Amazon.com

To continue with my story - 2 weeks passed and I only received 5 of the now 40 backordered titles.  I mailed the 5 DVDs.  I called the distributor about the rest of the titles.  I was informed that it could take from 6-8 weeks to get them.  I immediately emailed all of my Amazon customers of the situation and offered to refund their money.  All but 5 customers wanted their money back - so I started refunding money. 

For some reason Amazon does not or did not notify everyone of their refund and I started getting emails asking for money back.  I had to email these people and tell them that Amazon had their money and that I had already refunded it.  One person did not believe me and contacted Amazon.  I then received an email notice from Amazon informing me that they would be holding my funds for 30 days if I did not provide them with tracking numbers and order IDs on an Excel spreadsheet.  They also suggested I contact customers for positive feedback.  I did and only 2 or 3 people bothered.

I then went through all of my orders and copied them onto an Excel spreadsheet with tracking numbers - some orders had been shipped via Media Mail so I did not have tracking numbers.  The following email came from Amazon:

Greetings from Amazon.com

Thank you for providing us with tracking information. This information will be used in our evaluation, and you will be notified upon completion of the review.

Please know that all funds in your account are currently reserved in your Amazon selling account due to a high return rate of over 100%, an excessive amount of negative feedback greater than 25%. Your funds are on hold until we are sure all items have shipped. While reviewing your account, we will continue to be evaluating feedback on your account, success of transactions and contacting buyers to find out how their transaction is proceeding.

While our evaluation is still ongoing, you may further help expedite this review by providing additional information about other channels through which you sell, or past experience in such sales.

It is important that you continue to fulfill your orders and only list items that you will be able to deliver during the review process. We look forward to your continued cooperation in this matter, but we do remind you that funds can be held for a maximum period of 45 days.

Many sellers are able to minimize this time by cooperating with the merchant review process and quickly establishing a successful presence on Amazon.com.

We appreciate your assistance with this process.

Best Regards,

Amazon.com

The next day I refunded more backorders because I was beginning to feel like a crook or a con-artist.  I then received the following Amazon email form letter:

Hello from Amazon.com.

This is an auto-generated message to let you know that we have blocked your Amazon.com seller account and ended your listings.You may no longer sell on our site. We took this action because your seller performance has been below our performance standards.

You may have received notification in previous months that your feedback, A-to-z Guarantee claims, and/or refund rates were out of compliance with our seller Performance Standards. You may have been provided with suggestions for operational improvements to help you meet our standards.Unfortunately, any improvement in seller performance has not been consistent and has failed to meet our Performance Standards.

If you still have items to ship, please take appropriate steps to resolve your pending sales. Your Seller Account will remain accessible and you are encouraged to refund or ship pending orders.

Your funds are being reserved in your Amazon.com account pending receipt of any Guarantee Claims or chargebacks for which you may be responsible for.

If you have questions regarding any funds that may be due you, please contact us at payments-funds@amazon.com.

We take such steps in the interest of maintaining a free and fair venue for all participants. Please note that the blocking of your account is a permanent action.

Regards,

Item and Seller Quality

My account was closed.  They have $757 in payments they are holding for 90 days that is due to me (all of these orders were filled).

I know that I brought all of this on myself with the mistake of uploading that catalog of 50,000 titles.  But I really feel that Amazon treated me very badly.  Ebay would never do this.  Ebay does not take customer's monies before an auction is over or before the seller is notified to send an invoice.  Ebay fairly balances negative feedback with positive feedback.  You can call Ebay and talk to a real human being.

I know that Ebay sellers complain about Ebay raising fees but Ebay does not charge $40/month just to list and take a commission!  You can have an Ebay store for $15/month.  Ebay does not take as much as 15% when your item sells!  Ebay wants you to make money.  Ebay is very seller friendly.  Ebay lets you have almost total control over your listings.  You decide on shipping costs based on either a flat rate or a calculated rate.  Sellers on Ebay do not lose money on shipping the way that sellers on Amazon do.  Ebay allows sellers to cross promote items - Amazon does not.  Ebay allows you to list on Half.com for free! Ebay has Paypal that sellers control.  Amazon has total control of sellers' payments. Ebay has seller newsletters, blogs, chat rooms, contests, ebay power seller program, etc.  Amazon does not. 

Ebay's product is the seller.  Ebay does everything to make sellers happy.

Amazon.com's product is what Amazon sells.  Amazon's inventory is always listed first on searches.  Sellers are listed last.

In conclusion, selling on Amazon can be great if your sales record is perfect and customers leave positive feedback and you don't mind paying part of the shipping costs.  So, if you are a retailer that can guarantee 100% fulfillment and guarantee 100% that an Amazon customer will receive the item through the mail within 4-5 days - you will do well on Amazon.com.  If you are like the rest of us imperfect retailers, by all means, give Amazon a try, but DO NOT EVER CLOSE YOUR EBAY SELLER ACCOUNT!

 
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