Which e-commerce marketplace is better? This question has been asked by many small businesses in the e-commerce industry.
While there are benefits and drawbacks to both Etsy and eBay, it’s tough to say which one is “better.” No doubt you’ve heard of both of these marketplaces before. You may have even bought items off these platforms yourself.
But, as we will soon see in this face-off, there’s a lot to consider when selling products, and the experience is very different than when you’re there to buy.
Selling a product in itself is really quite easy to do in this day and age. But, it’s the return on your investment and the ability to actually make sales with some sort of velocity that sets the winners apart.
So, let’s get ready to rumble with selling on eBay vs Etsy!
Etsy vs. eBay: The Overview
Before we really get into the nitty-gritty about each of these marketplaces, you need to understand that things do go wrong (and more than likely will) at some point on your entrepreneur journey.
You have chosen to sell on these platforms. It’s their sandpit, and as a result, you need to abide by their rules.
They don’t always get it right, and you may find yourself getting banned off the platform for no good reason. So, be prepared and just stick to the rules as best as you can.
Now with that out of the way, let’s take a look at each of the companies in more detail.
What Is Etsy?
Founded in 2005, Etsy is an e-commerce website where you can sell handmade items, vintage goods (that are at least 20 years old) and craft supplies.
When the world of commerce is becoming increasingly automated, Etsy wants to make sure that human connection is never lost. That’s why they exist. Etsy offers a place where creativity lives and thrives because it’s powered by people.
It helps sellers turn their ideas into successful businesses, while connecting buyers in need with something special for those moments which deserve imagination.
What Is eBay?
One of the founding e-commerce platforms at the birth of the dot com age, eBay is a marketplace for both smaller businesses and larger enterprises.
A unique feature to eBay is the ability for customers to set the price of an item through an online auction. Here, you can find more “mass-produced” items in both the new and used categories.
This attracts not only business-to-customer (B2C) sales but also customer-to-customer (C2C) type transactions. So, there’s a much larger and diverse range of products on the platform.
Etsy vs. eBay: Benefits and Features of Each Marketplace
In this round, let us take a look at how each online marketplace compares when it comes to actually start an online business.
Here is a list of some of the benefits you can find by using Etsy.
- Very Niche Marketplace
Etsy is a great place to sell niche products. You’ll have an easier time targeting customers who are looking for something specific and your community will be able to find you because they’re most likely on Etsy already.
Unless your eCommerce store is into selling vintage items or handmade crafting, there’s not a lot of other products you’ll find here.
- The Amazing Seller Community
Unlike most other online marketplaces where the competition is fierce and generally cold towards other sellers. Etsy sellers are nothing like I have seen elsewhere.
Instead of undercutting each other on the sales price and lighting deals, Etsy has a community forum where business owners can ask questions and get instant feedback from other successful sellers.
While it may be a similar setup to Amazon’s Seller Central, the general feel and atmosphere of the Etsy forum are more friendly in nature towards selling online.
- Easy to Set Up
Opening up your own eCommerce business takes only a few minutes, and there’s no coding or special skills required. You can even use templates to get started and list products in no time.
As you walk through the setup process, you’ll find that there’s not a whole lot you can customize with just a basic shop. There may be a slight push to pay for the premium version, but at this stage of the game, particularly if it’s your first online store, it’s not generally required.
- Turn Your Hobby Into a Profitable Business
In the eCommerce industry, Etsy has a reputation for being more welcoming to artisans than other platforms. Solo entrepreneurs who sell on this site often do so primarily because they’re passionate about their craft and not just looking at it as another way make some extra cash.
If you can get people excited enough by what you have inside your shop before even opening the doors, then success will find them coming back. But, don’t expect too much action right off the bat.
It is important though, no matter how little effort or creativity goes into marketing yourself, there will always be customers ready waiting around the corner until something catches their eye, such as your awesome products!
Now, in contrast to Etsy, let’s take a look at the benefits of an eBay store.
- Long Term Trust
eBay has been around 10 years longer than the Etsy platform. Over that time, the trust built by shoppers has increased dramatically. This means that if customers can shop with confidence, then they are more likely to buy using that platform.
There are even those people who are loyal only to one marketplace. It’s these people who can become potential customers of yours.
- Leverage the Search Benefits
There are two ways you can actually benefit from using the right online marketplace. Firstly, you can potentially piggyback off of eBay’s SEO benefits when someone searches for a product in the Google search engine themselves.
The other way is that you are putting your product in front of millions of people per month with their credit cards in their hands, ready to buy.
- Achieve the Highest Amount Possible
A very unique feature to eBay is the ability to sell an item under auction conditions. This can create a level of scarcity amongst bidders and cause a higher premium to be paid for your product than if you were to put up a fixed price.
- No Competition From eBay Themselves
It’s a big pain point on the other marketplace where they have created their own private label product (known as Amazon Basics). They then use their own data and go up against the niches that are selling the most as a way to put even tougher competition into the space.
eBay, however, doesn’t do this, so you can be sure that you can sell online in confidence, knowing that you’re not going up against a giant online retailer.
Etsy vs eBay: The Customer Base
Whether you’re selling online or in an actual brick-and-mortar store, it’s essential to know who your customers are going to be before you go into it.
A good way to think of this is, it’s better to deliver a product your target audience wants, rather than developing a product and then trying to figure out who to sell it to.
Customers shop here looking for very specific products with the marketplace broken up into three main sections: handmade, vintage items and supplies.
Of course, given the pandemic in 2020, the amount of sellers has almost doubled, however, the gross merchandise sales volume (GMV) on Etsy’s platform had pushed it to a whopping 10.28 billion U.S. dollars. This is up from just 314 million US dollars back in 2010.
By comparison straight off the bat, eBay’s GMV stands at around 90.2 billion U.S. Dollars. This is to be expected though where there are multiple categories in which to buy and sell products.
Of course, the other side of the coin is that customers may just be looking for mass-produced items. These types of shoppers are generally driven by getting the item for the lowest cost possible, rather than a beautiful unique item.
What ends up happening is a competition between sellers, and the race starts to happen when driven by price.
Etsy vs eBay: What Can’t You Sell?
Believe it or not, there are actually items you cannot sell on these platforms.
As has been mentioned before, everything on the platform must either be handmade by you, be of vintage age (at least 20 years old) or craft supplies. You aren’t even allowed to resell handmade items.
As of late, there have been many complaints from other sellers that there are some businesses making their way onto the platform and putting up “mass-produced” items for sale. So, Etsy has been cracking down on this policy and redefining each of the categories in what can be sold.
You can take a look at their policy here.
There are 39 listed prohibited and restricted item policies that you must abide by before setting up an eBay store. This includes verything from food to real estate.
Just in case you’re thinking of selling your home on eBay, the actual sale must be taken off eBay (image the commission you would have to pay!), however, you can put it up for rent. What an age we live in.
Etsy vs eBay: Shipping Options
One of the most exciting parts after achieving the sale is actually sending off the item to the customer. Fortunately, both eBay and Etsy offer great shipping options.
Etsy makes delivery and order fulfillment a fairly easy process and allows you to partner with postage companies to ensure timely deliveries for your customers.
By using Etsy’s postage label service, you can ship your orders with USPS and FedEx (U.S Only) and with Canada Post (Canada Only) and save up to 30% on shipping.
Once you buy the label, then Etsy will mark the order as dispatched. You can then print the shipping labels out, and your item is ready to be delivered.
Once your item is out for delivery, you can keep your customers up to date and put their minds at ease with visual tracking updates.
There are many ways you can send items to your buyers. You can send it through the post or get them to pick it up from your location. You can also filter out buyer requirements.
For example, if a buyer has a history of unpaid items, you can exclude them.
When you use eBay for shipping, you get access to an exhaustive list of domestic and international carriers with trackable services.
eBay customers are always on the lookout for a bargain or extreme value from their purchases. To help with this, eBay allows sellers to lower their unit price but pay for shipping, or to list a competitive price and offer free shipping instead.
As a business owner, this is up to you to determine what entices your customers better.
Etsy vs eBay: Seller Fees
When you list your business on the back of these giant platforms you can expect to pay selling fees for just about everything. This is an important step in figuring out if it’s actually viable to sell your product for a profit within a particular niche.
There are a lot of different fees that apply to an Etsy shop, so let’s look at some of the more common Etsy charges that will apply.
- Listing Fees
A $0.20 fee is charged for every item on every listing you put up on the website or mobile app. Unless you make it a private listing, you’ll only be charged the listing fee when you sell the item.
- Transaction Fees
When an item sells, Etsy will charge you a transaction fee of 5% of the price that you display including any delivery and gift-wrapping services you provide also.
- Subscription Fees
Although the basic store is free, if you feel like you’re growing quite well and could benefit from additional extras such as a free “.store” domain, then you’ll be up for a $10 payment paid monthly on top of any other Etsy fees.
- Advertising and Promotional Fees
In an effort to get your product in front of as many eyes as possible, many new sellers use the leverage of paid advertising. This is especially effective when you’ve got a brand new site and not a lot of people know your brand name yet.
If you’re just using Etsy’s platform to advertise on, then the management of your ads is fairly straightforward through your seller hub. You set the budget limit that you want your ads to run on a daily basis.
Where things start getting tricky is where you want to purchase offsite advertising space using Google Adwords or Facebook ads, for which Etsy is a partner. There are a few hoops to jump through, so be sure to read it carefully if you decide to use this route.
When you take a look at all of eBay’s fees, it’s really quite simple. It’s free to list up to 250 items per month. Everything else costs money.
Let’s take a look at some of the eBay charges you might encounter.
- Insertion Fees
This fee for most people to start with is not going to cost anything. As I mentioned above, you get up to 250 free listings per month. As your business grows and you need more, then you’ll start paying a $0.35 insertion fee per listing.
- Final Value Fees
When you make a sale, then eBay will keep a portion of that sale. How much depends on the category you are in, but for most categories, expect a 12.55% fee of the sale price plus an additional $0.30 per order. This is your final value fee.
- Advertising Fees
eBay has made this super simple, it’s free to list your item as an advertisement, and you only pay an ad fee if your item sells.
- Optional Listing Upgrades
When you create your listing eBay offers you the chance to select certain upgrades such as subtitles or setting an auction reserve price. These fees will get charged, regardless if you make a sale or not.
Etsy vs eBay: Customer Support
When you’re new to an eCommerce marketplace, there will no doubt be plenty of questions on your mind. In this round, we look at the different customer support options available to you.
But, what if there’s an issue and you actually need to message your customer directly? Can it be done?
First up, Etsy has a customer support hotline in which both buyers and sellers can contact with regards to any account issues or any information regarding an order.
If calling up is not your thing, then through the Etsy app, you can contact customer support that way.
One of the best things about Etsy as an online marketplace is that buyers and sellers are free to message each other about anything to do with the order. This is a feature many other marketplaces don’t allow to protect the buyers from spam messages.
Once someone has purchased an item from you, then you are free to send them a message. You can do so by clicking on a button or sending them an email through their buyer alias email address.
eBay has a comprehensive customer support FAQ section that will filter you through a rabbit hole of related articles to help. If by the end, your question still hasn’t been answered, then you can either get them to call you or use the chatbot on the screen.
Getting Paid From Etsy and eBay
Once you’ve made your first sale, you’ll want to get paid! If using Etsy, then you’ll need to sign up for Etsy Payments. This allows customers to use most payment options to purchase from your shop.
Just be aware that this service isn’t free and attracts payment-processing fees, so be sure to check before you enroll.
You must be in an eligible country to use Etsy Payments, otherwise, you can still use PayPal.
eBay is a little different in that once you make a sale, those funds will get transferred straight to your nominated bank account via PayPal. So, you may be subject to some PayPal processing fees instead of eBay fees on your sale, as it gets deposited.
One way to bypass the payment processing fee is if you meet up with your seller and get paid cash in hand. Otherwise, it’ll have to go through your eBay account.
Bottom Line: Which Platform Should You Sell On?
When to Sell on Etsy
If you’ve got wholesale items or a very niche audience, then this is a great place to start. But, you need to be aware that Etsy is the smallest marketplace, and there won’t be as many sales as some of the other giant marketplaces.
But, there still are plenty of Etsy users who are active buyers in looking for second-hand items and handmade goods.
When to Sell on eBay
Having an eBay shop allows you to sell different products online in different categories, all within the same site. Because eBay offers such a diverse range, online sales are much bigger in comparison to Etsy, however, this also attracts a lot more competition.
With the emergence of many digital platforms, it can be hard to stay competitive as an eCommerce seller, and starting off with your own website is incredibly tough.
However, if you know who your target audience is and offer products they want at affordable prices, many successful sellers have created success on these platforms, and there’s no reason why you can’t, either.
It’s not easy, though, so do some research before investing in any big marketing campaigns or product launches.
Keep reading on MikeVestil.com: Want to learn more about various eCommerce platforms? Check out my review on Shopify vs. Etsy for more information.