eBay vs. Amazon

eBay vs. Amazon

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In 2023, eBay generated $10.11 billion in revenue, compared to nearly $574.78 billion from Amazon in the same period. Whereas in 2022, Amazon generated $513.98 billion in revenue, vs. eBay’s over $9.79 billion. In comparison, looking at revenues, Amazon was over 57 times larger than eBay in 2023.

ElementseBayAmazonSimilaritiesDifferencesCompetitive Advantage
Customer SegmentsIndividual sellers, small businesses, collectorsIndividual consumers, businesses, sellersBoth serve individual consumers and sellers, with a focus on e-commerce.eBay primarily connects individual sellers, small businesses, and collectors to buyers. Amazon serves individual consumers, businesses, and sellers while also offering a broader range of services.Broad customer base and seller network (Both).
Value PropositionOnline marketplace, auction format, variety of itemsE-commerce platform, convenience, vast product selectionBoth provide online marketplaces with the convenience of e-commerce. eBay offers an auction format and a wide variety of items. Amazon emphasizes vast product selection and convenience.eBay’s value proposition revolves around its auction-style platform, which allows buyers to bid on items. Amazon offers a retail-focused value proposition with features like Prime membership, fast shipping, and additional services like AWS.Auction format and variety (eBay). Convenience and selection (Amazon).
ChannelsWebsite, mobile app, partnershipsWebsite, mobile app, partnershipsBoth operate through websites and mobile apps, and they establish partnerships to expand their reach.eBay’s primary focus is on connecting buyers and sellers through its platform. Amazon extends its services to include retail, cloud computing, and more.Diversified service offerings (Amazon).
Customer RelationshipsOnline platform, customer supportOnline platform, customer serviceBoth maintain customer relationships through their online platforms and offer customer support.eBay’s primary customer relationships revolve around facilitating transactions between buyers and sellers. Amazon emphasizes customer service and support across various product and service categories.Customer service and support (Amazon).
Key ActivitiesOnline marketplace management, payment processingE-commerce operations, fulfillment, cloud computingBoth engage in online marketplace management. eBay focuses on payment processing. Amazon operates e-commerce, fulfillment centers, and cloud computing services.eBay primarily manages its online marketplace and payment processing. Amazon has a broader range of key activities that include e-commerce, fulfillment operations, and AWS cloud services.Diversified business operations (Amazon).
Key ResourcesOnline platform, user dataE-commerce platform, fulfillment centers, cloud servicesBoth rely on key resources such as their online platforms and user data.eBay’s key resources are focused on its online marketplace and user data. Amazon’s resources extend to e-commerce, fulfillment centers, cloud services (AWS), and digital content distribution.Cloud computing resources (Amazon).
Key PartnershipsPayment processors, shipping companiesThird-party sellers, publishers, logistics partnersBoth collaborate with payment processors and shipping companies to facilitate transactions. eBay partners with payment processors and shipping companies. Amazon collaborates with third-party sellers, publishers for Kindle content, and logistics partners for fulfillment.eBay’s primary partnerships are with payment processors and shipping companies to support its transactions. Amazon has an extensive network of third-party sellers, publishers, and logistics partners to enhance its e-commerce and services ecosystem.Extensive third-party seller network (Amazon).
Revenue StreamsTransaction fees, advertisingProduct sales, subscription services, AWS, advertisingBoth generate revenue from transaction fees and advertising. eBay also earns revenue from advertising. Amazon’s revenue streams include product sales, subscription services (Prime), AWS cloud services, and advertising.eBay primarily earns revenue from transaction fees and advertising. Amazon has a diversified revenue model that encompasses product sales, subscription services, cloud computing through AWS, and advertising.Diversified revenue streams (Amazon).
Cost StructurePlatform maintenance, customer supportE-commerce operations, fulfillment, cloud infrastructureBoth incur costs related to platform maintenance and customer support. eBay’s cost structure is focused on maintaining its online platform and providing customer support. Amazon’s cost structure includes e-commerce operations, fulfillment, and the maintenance of cloud infrastructure (AWS).eBay’s cost structure is simpler, focused on online platform maintenance. Amazon’s cost structure is more complex due to its diversified business operations, including e-commerce, fulfillment, and cloud services.Simplified cost structure (eBay).
ebay-business-modelamazon-business-model

Related Visual Stories

Who Owns eBay

Who Owns eBay?
eBay’s main shareholder is its founder, the billionaire Omidyar, who stepped down from the board of eBay. By 2020, he owned (and might still own 4.69% of the company’s stock) followed by other institutional investors, such as Vanguard (11.41%) and Blackrock (8.51%).

eBay Business Model

ebay-business-model
eBay’s core business is a platform business model that makes money from transaction fees through its marketplaces. In short, eBay primarily makes money by charging fees on successfully closed transactions. For instance, in 2021, on an $87 billion worth of gross merchandise value sold on eBay, the company generated $9.77 billion in transaction revenues at an 11.19% take rate (fee).

eBay Revenue

eBay Revenue
In 2023, eBay generated $10.11 billion in revenue compared to $9.79 billion in 2022 and $10.42 billion in 2021.

eBay Employees

eBay Employees
eBay had 12,300 employees in 2023, compared to 11,600 employees in 2022 and 10,800 employees in 2021.

eBay Buyers

eBay Buyers
eBay had 132 million buyers in 2023, compared to 134 million in 2022, 147 million in 2021, and 185 million in 2020.

eBay Revenue per Employee

eBay Revenue Per Employee
eBay revenue per employee was $822,114 in 2023, $844,397 in 2022, and $964,815.

eBay GMV

eBay GMV
eBay reported $73.2 billion in gross merchandise volume in 2023, compared to $73.9 billion in gross merchandise volume in 2022 and $87.36 billion in 2021.

Is eBay Profitable?

eBay Net Income
eBay was profitable in 2023, as it reported a profit of $2.77 billion. Compared to a net loss of $1.27 billion in 2022, a net income of $13.6 billion in 2021, and a net income of $5.67 billion in 2020.

eBay Revenue Breakdown

ebay-revenue-breakdown
In 2022, eBay generated $9.77 billion in transaction revenue and $650 million in marketing services revenue.

How Much Does eBay Take?

eBay Take Rate
In 2023, eBay’s take rate was 13.81%, 13.25% in 2022, and 11.19% in 2021.

eBay Bidding System

how-does-ebay-bidding-work
eBay bidding is a way for buyers to bid on a product whose sale price is decided by auction. The bidding process itself is automated, with eBay acting on the buyer’s behalf.

eBay Organizational Structure

ebay-organizational-structure
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

Etsy vs. Ebay

etsy-vs-ebay

eBay vs. Amazon

eBay vs. Amazon
In 2023, eBay generated $10.11 billion in revenue, compared to nearly $574.78 billion from Amazon in the same period. Whereas in 2022, Amazon generated $513.98 billion in revenue, vs. eBay’s over $9.79 billion. In comparison, looking at revenues, Amazon was over 57 times larger than eBay in 2023.

Amazon Business Model

amazon-business-model
Amazon has a diversified business model. In 2023, Amazon generated nearly $575 billion in revenues while it posted a net profit of over $30 billion. Online stores contributed over 40% of Amazon revenues. Third-party Seller Services and Physical Stores generated the remaining. Amazon AWS, Subscription Services, and Advertising revenues play a significant role within Amazon as fast-growing segments.

Amazon Mission Statement

amazon-vision-statement-mission-statement (1)
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Customer Obsession

customer-obsession
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!

Who Owns Amazon

who-owns-amazon
With 64,588,418 shares, Jeff Bezos is the primary individual investor. Owning 12.7% of the company. Other top individual investors include Amazon’s CEO Andy Jessy, who has 94,729 shares. Top institutional investors include mutual funds like The Vanguard Group (6.6% ownership) and BlackRock (5.7% ownership). 

Amazon Revenues

amazon-revenues
Amazon generated over half a trillion dollars in revenue in 2023, of which $231.87B from online stores, over $140.05B from third-party seller services, $90.76B from AWS, $46.9B from advertising, $40.21B from subscription services, $20.03B billion in physical stores, and $4.96B from other sources.

Amazon Profitability

is-amazon-profitable
Amazon was profitable in 2023. On nearly $575 billion in revenue for 2023, Amazon generated a net profit of over $30 billion. Since 2014, Amazon hasn’t recorded a net loss, but it did record a net loss of over $2.7 billion in 2022, while it recouped that in 2023.  Indeed, in 2014, Amazon reported a net loss of $241 million, and it would be profitable until 2021. In 2022, Amazon turned unprofitable again and highly profitable again in 2023. 

Amazon AWS Business

amazon-aws-platform-business-model
Amazon AWS follows a platform business model that gains traction by tapping into network effects. Born as an infrastructure built on top of Amazon’s infrastructure, AWS has become a company offering cloud services to thousands of clients from the enterprise level, to startups. And its marketplace enables companies to connect to other service providers to build integrated solutions for their organizations.

Amazon Prime Revenue

amazon-prime-revenue
Amazon subscription revenue in 2023 was over $40 billion, compared to over $35 billion in 2022 and nearly $32 billion in 2021. Amazon Prime grew from a $4.5 billion revenue segment in 2015 to an over $40 billion segment in 2023.

Amazon Advertising Revenue

amazon-ads-revenues

Amazon Cash Conversion

cash-conversion-cycle-amazon

Working Backwards

working-backwards
The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

Amazon Flywheel

amazon-flywheel
The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

Jeff Bezos Day One

jeff-bezos-day-1
In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

Regret Minimization Framework

regret-minimization-framework
A regret minimization framework is a business heuristic that enables you to make a decision, by projecting yourself in the future, at an old age, and visualize whether the regrets of missing an opportunity would hunt you down, vs. having taken the opportunity and failed. In short, if taking action and failing feels much better than regretting it, in the long run, that is when you’re ready to go!

Network Effects

network-effects
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Platform Business Model

platform-business-models
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model’s success.

Jeff Bezos Empire

jeff-bezos-companies
Jeff Bezos was best known for founding eCommerce giant Amazon in 1994. However, the entrepreneur owns companies in several industries, including health care, retail, robotics, real estate, and media. Many of these companies have been acquired by Amazon over the years, but some have been the result of direct investment from Bezos himself (through his investment arm is called Bezos Expeditions).

Amazon Subsidiaries

amazon-subsidiaries
Amazon is a consumer e-commerce platform with a diversified business model spanning across e-commerce, cloud, advertising, streaming, and more. Over the years Amazon acquired several companies. Among its 12 subsidiaries, Amazon has AbeBooks.com, Audible, CamiXology, Fabric.com, IMDb, PillPack, Shopbop, Souq.com, Twitch, Whole Foods Market, Woot! and Zappos.

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