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eBay vs. Etsy: Which is the better sales channel for your business?

Whether you’re building your first eCommerce store or moving to multi-channel from a successful Amazon business, eBay and Etsy are two of the largest options available to you, with plenty of incentives for most sellers. Gross sales in Q2 of 2021 totaled $22 billion for eBay, and $3 billion for Etsy, which leaves plenty of opportunity in both channels.

Choosing between these platforms depends on your business, its customers, and how you intend to market products.

eBay and its customers

eBay is most famous for its auction format, but the marketplace has come a long way since the days of quick sales. Today, the platform allows “Buy It Now” purchases, with formats explicitly set up for products listed by multiple sellers. It also offers product and seller reviews on repeat purchase items, like movies and TV shows, in a format similar to the one Amazon uses.

The platform also has 159 million active buyers as of Q2 2021. Of those, 49% are based in the U.S. Most also comprise deal hunters – people looking for the rare, the hard to find, and the unusual. In fact, while eBay is associated with people looking for the lowest-cost products, Business Research Methodology identifies its top buyer segments as those seeking benefits like “Saving time” and “Accessing a greater range of products.” This indicates eBay shoppers are looking for products they cannot easily find elsewhere.

That’s why eBay buyers are more likely to be rural, to shop for either deals or high-end, luxury goods, and less likely to have easy access to brands and malls.

As a result, eBay lists its best-selling categories as:

  • Jewelry and Watches
  • Computers/Tablets and Networking
  • Cell Phones and Accessories
  • Video Games and Consoles
  • Clothing and Shoes
  • Cameras and Equipment
  • Health and Beauty
  • Music, DVDs, and Movies
  • Automotive

That’s a far cry from Amazon’s top 10, which includes appliances, apps, arts and crafts, home goods, and beauty and personal care. It’s also vastly different from the top products on Etsy, which you’ll see if you keep reading.

Etsy and its customers

Etsy is a much smaller marketplace due to the strict requirements of the marketplace. For example, Etsy listing requirements still state all products must be vintage (at least 20 years old), handmade, and/or designed by you or a craft supply. Despite this, Etsy has a thriving live plants market, as well as small shops and low-volume manufacturers selling handmade goods.

Etsy only allows pre-set pricing on goods. However, you can customize listings to let buyers purchase variations of a single product. This translates to full personalization of products and custom orders, with minimal back-and-forth communication upfront.

As a result, Etsy has a large audience of buyers looking for unique, custom, and handmade goods. If your intent is to sell mass-market merchandise, Etsy is the wrong platform. However, Etsy does offer customer loyalty. According to Forbes, almost 80% of Etsy sales are repeat purchases (across the platform, not individual stores).

With a median household income of $56,000 and 61% of shoppers living in urban environments, Etsy caters to the middle and upper-middle class. And an estimated 86% of buyers are female. That’s a striking difference from most competitors.

That reflects Statista’s list of the top selling categories on Etsy:

  • 25% Home and Living
  • 21% Art & Collectibles
  • 15% Jewelry
  • 11% Clothing
  • 8% Accessories
  • 6% Bath and Beauty
  • 4% Toys and Games
  • 3% Bags and Purses
  • 2% Wedding
  • 2% Books, Movies, and Music

These top 10 product categories are completely different from eBay, with virtually no audience for electronics, household goods, etc.

Shipping requirements

Both eBay and Etsy maintain shipping requirements for sellers. However, for the most part, they’re significantly more relaxed than Amazon or Walmart. That is, unless you opt in to two-day shipping solutions.

eBay

eBay only requires sellers to opt in to specific shipping options and stick to them. This means shipping and handling within the specified time span, and not charging more than the actual cost of handling and postage. eBay automatically issues a five-star rating when products are sent with one-business-day handling, free shipping, and are received within the specified time.

If you opt in to eBay Guaranteed Delivery (which you likely should), you have to build a high performance score, opt in to using a third-party logistics service or an eligible delivery service, and meet performance and delivery scores.

Etsy

Etsy is more relaxed than eBay, as the site assumes you often have to make items to order. As a result, orders must ship within 30 days of being placed. You’re also required to charge what you’ve been billed for shipping and handling. While Etsy doesn’t have many other rules, they do ask you to be up front about total processing and handling times. If customers won’t receive your product for 30 days or more after the order, be clear about it.

Seller fees

All platforms have seller fees, but eBay and Etsy have completely different fee structures. This can make them difficult to compare.

eBay

eBay charges two types of fees, insertion fees and final value fees. These are charges for listing the product and selling it. In addition, some categories have alternative fees.

The base fees are as follows:

  • The first 250 product listings per month are free. Afterwards, you pay $0.35 per listing.
  • Most categories feature a 12.55% fee on the sale plus shipping costs, with a 2.35% fee on any amount over $7,500.
  • Some categories, like sneakers priced over $100, are not given a final value fee.
  • Some categories, like guitars, basses, and trading cards, have lower fees. For example, if you sell guitars, you’ll pay an average of 5.85% in transaction fees.
  • All sales feature a $0.30 closing fee per order.

Etsy

Etsy’s fees are much more straightforward, but still have a few complexities. The standard fees are as follows:

  • $0.20 listing fee or renewal fee per item, per quantity, per period. So, if you list 300 of an item and the listings expire every four months, you can expect to pay $60 every four months to maintain that inventory.
  • 5% transaction fee on all sales
  • 5% transaction fee on all shipping

So, where do the complications come in? You can opt into Etsy programs like Pattern, which essentially advertise and highlight your products. If so, you’ll owe a 15% transaction fee for sales of less than $10,000 over a year, and a 12% transaction fee if you’ve made more than $10,000 in sales. You’ll also pay various currency conversion and payment fees (although eBay has these too).

Seller tools

eBay and Etsy each provide similar seller tools. These include product management, inventory management, listing templates, promotions or promoted posts managers, on-site ads, and off-site ads. eBay adds to this with a seller hub to manage bulk sales and inventory. Both offer sales management, dashboards, seller tracking, and an app. So, although both are relatively similar, eBay is geared towards higher-volume sales.

Seller performance requirements

eBay evaluates sellers every three months when they’ve made 400+ sales during that period. Here, you’re required to have a maximum 2% transaction defect rate. This means no more than 2% of transactions can have late shipping, negative feedback, a return request, a product defect, etc. If your defect rate is under 0.5%, you receive a Top-Rated Seller badge.

Etsy only monitors seller accounts when they begin to collect a large number of negative reviews or return requests. In this case, Etsy will review incidents and will respond to them by limiting or suspending your account. However, Etsy is not clear about what specific standards you have to meet.

Considering business fit when selecting a channel

Now that you know more about what works on Etsy and eBay, you can make a better product-fit decision for your business.

  • Product type and manufacture – If you have new-manufacture or mass-produced goods, Etsy is not a good market fit. Handmade and custom goods work on either platform, but you may have trouble being found on eBay if you don’t possess a well-known brand or advertising campaign.
  • Infrastructure – eBay has much stricter shipping and customer service policies. However, you need to offer fast shipping and a good customer experience on any platform to foster repeat business.

Last, but not least, your product niche is always important. Etsy is a wonderful place for small shops and brands with unique products and goods. eBay offers a better fit for sellers with searchable products that customers already know they want and need. Choose the platform that will best complement and support your niche.

Wrapping up — eBay vs Etsy

Both eBay and Etsy have a lot to offer, and you may want to operate on both. However, many sellers will gravitate to one or the other, based on shop size, demographic, and brand. Take your time in making your decision — then commit to it.

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