Marketplace seller: Amazon vs eBay vs etc...

This post is intended to provide some additional introductory eCommerce information so that the reader has a more complete appreciation of the Amazon selling experience.

There are many flavours of online stores. I will quickly & arbitrarily group them into the following categories:

  • producer brand
  • vendor
  • marketplace

In my world a producer branded storefront is an online presence that represents a specific producer. Wolford is a good example. In this category the online storefront presents a single product brand. Sometimes a branded storefront will present a family of brands from the same producer. Many wine producers like Church & State Wines have several product lines, all of which are represented together.

Vendor storefronts feature products from multiple producers, hence multiple and often competing brands. A common retail example is department stores. An iconic Canadian example is Hudson's Bay. As technical people we should not confuse the concepts of vendor brand with manufacturer brand. High end vendors like Saks Fifth Avenue also claim to have a brand. For our current discussion, we just need to remember that they are not primarily a producer, even if they have a house brand.

A Marketplace is neither brand nor vendor specific. They provide a common marketplace for multiple vendors and brands to collect together. Amazon.com, eBay.com and Alibris are some examples. Note that some marketplaces may specialize in the products they offer. Alibris specializes in books, music and movies while eBay sells just about anything.

Amazon is a marketplace. Why do marketplaces exist? Why not just brand or vendor sites? A downside of a marketplace is that the seller loses all brand awareness. I routinely purchase bluetooth earphones from Amazon. I do not remember the actual vendor or brand of my last purchase. I think of them as no-name clone earphones. I buy from Amazon. Amazon gets all of the "brand" recognition.

So why would someone choose to utilize a marketplace? The producer / vendor fades into the background. The bonus for the seller is that buyers are able to easily find their product (or something equivalent - oops) and make a purchase. It is very difficult for a small specialized vendor such as Fun-In to make their online presence known. Selling products on a well known marketplace increases their visibility and hence their potential to make a sale.

Now that we know marketplaces are a good idea, let's talk a little bit about eBay vs Amazon. They are both online marketplaces with international presence. Other than auctions versus buy now, they appear very similar to a casual buyer. But they are fundamentally different from a seller perspective. Let's consider the following:

eBay:

  • everyone is a buyer and a seller
  • content is a random free for all
  • content is randomly assigned to one or more arbitrarily (slowly changing) predefined categories

Amazon:

  • you are a buyer by default
  • becoming a seller requires a special signup process, and has ongoing associated minimum fixed costs
  • content is structured (mostly): everything gets an ASIN: Amazon Standard Identification Number

The above concepts make the sellers world very different depending upon their chosen marketplace. Later posts will delve deeper into issues in the Amazon marketplace. The ultimate battle is to compete for buyer eyeballs. That is the fundamental reason a seller would utilize a marketplace. A marketplace can provide more buyer traffic than a branded or vendor eCommerce site.

As a marketplace seller, all you need to do is stand out among the crowd...

Teaser: I will eventually start to talk about utilizing the Amazon Product Advertising API and the Amazon Marketplace Web Service from Drupal.