Amazon's Marketplace Is Growing, but Most of Its Sellers Are Active on eBay, Too

When looking at the largest US ecommerce sites, eBay is a distant second to Amazon. But as third-party sellers become more prominent on Amazon’s marketplace, many want to expand to other platforms, a possible silver lining for eBay.

In April 2019, intelligence platform Feedvisor asked US Amazon marketplace merchants what their business goals were for this year. While the top answer was expanding an existing product line (65%), more than one-third (35%) said they wanted to diversify to other platforms—a significantly larger percentage than those that wanted to go direct-to-consumer (D2C) and launch their own ecommerce website (12%).

And for Amazon merchants, eBay is already the most popular secondary option (56%), per Feedvisor, outshining personal sites, Walmart, brick-and-mortar stores and smaller online marketplaces.

“For sellers who want the broadest reach possible, eBay and Amazon are the two most important marketplaces in US ecommerce," said Cindy Liu, senior forcasting analyst at eMarketer. "But unlike Amazon, eBay operates strictly as a marketplace—they don’t sell their own inventory of products—which allows brands to manage their own relationships with their customers.”

This year, we expect eBay’s total ecommerce sales in the US will reach $35.89 billion, or 6.1% of all US ecommerce sales. That’s relatively small compared with Amazon's 37.7% share. But eBay remains larger than up-and-coming ecommerce players like Walmart and Wayfair.

Reporting from Bloomberg has also sparked rumors that Amazon plans to significantly cut down on wholesale purchases in the immediate future, leaving many of its smaller suppliers to pivot to other marketplaces.

eBay was one of the original pioneers of the online marketplace model. Operating as a pure marketplace, where sellers don’t have to compete against private-label brands, could make eBay a desirable place for merchants to expand.

“We don't take an inventory position. We don't manufacture any of our own products; this is truly a marketplace,” said Scott Kelliher, head of brand advertising and partnerships at eBay.

However, eBay isn’t the only marketplace for Amazon merchants to expand to. Retail behemoth Walmart has a growing online presence, and Google is positioning itself to expand as a marketplace.

While it makes sense that sellers will want to appear on as many marketplaces as possible, the marketplaces themselves still have to compete to attract consumers. Given that more than half of US households will be Amazon Prime members in 2019—and are already paying a premium for the convenience of faster shipping—it may prove difficult to get them to shop elsewhere for the same products.

“It will be an uphill battle for eBay," Liu said. "With Amazon growing its marketplace and offering extensive tools to help sellers, eBay will need to focus on the things that differentiate it from Amazon.”