Shipping Costs on eBay & Amazon

Based on my experience, ISTM that it’s very common for eBay sellers to offer free shipping, even on relatively low cost items, but on Amazon unless you hit their free shipping threshold or have Prime it’s very rare.

One might assume that the eBay sellers are including shipping in the cost of the item while Amazon sellers itemize it. But my experience is otherwise. I’ve found that items which are below Amazon’s free shipping threshold tend to be cheaper net-net on eBay, while Amazon is generally competitive on things above the threshold. And today, I needed a specific item which was $13.99 plus $5.49 shipping on Amazon, and $15.99 with free shipping on eBay, from the exact same seller.

What sense does this make? Why would the net price on one platform be different than the net price on another platform at one price point but be the same at another?

Seller fees are significantly higher on Amazon. This is likely a way for the seller to get the same margin on both platforms.

But wouldn’t seller fees be a percentage of the sales price? If that’s the case, then the price comparison should be the same at different price points.

If Amazon has a fixed per-sale fee, then it would make sense that they should be higher for lower cost items.

Non-pro sellers were unable to alter shipping costs on Amazon when I last sold. So only high volume amazon sellers who pay a monthly fee even have an option to offer “free” shipping.

Seller fees include a base fee, a percentage fee, and (in the case of FBA) storage fees. There is nothing simple about those calculations except that net cost to sell an item on Amazon is always more than it is to sell on Ebay.

If you’re an Amazon vendor, their fees are based upon what you charge Amazon for the item, not what you charge customers for the item.

In addition to the specific eBay vs. Amazon tidbits brought out above …

You’re implicitly assuming the sell price is directly tied to the seller’s actual marginal costs. It never is.

The seller’s marginal costs form a weak lower bound on what they’ll sell something for. They may go below that direct cost for overstocks, last-season items, loss-leaders, etc.

The upper bound on price is determined by competition from other sellers, and by buyers’ willingness to pay. Both of which matter mostly on each sales platform separately, but with some cross-pollination between platforms.

Bottom line, there’s a whole host of factors beyond your simplistic “same item by same seller must equal same price” idea.

A Planet Money episode on Amazon sellers said that many use software to determine prices. The software compares prices with other similar items and will adjust prices accordingly. (Sometimes it glitches and you’ll see an item for a ridiculously high amount.)