eBay on the other hand charges 10% and sellers can ship items the cheapest way. Those same suppliers on Amazon list the their items on eBay for cheaper since they net the same after fees.
This is not universally true. As a seller on Amazon, using both FBA and seller-fulfillment, there is a lot of "it depends" in all of this.
Some items we can ship cheaper, especially to local zones. But as we're on one coast and we have a lot of customers on the other coast, FBA can be a real saver on the shipping charges.
Size and weight of the package affect the shipping charge, but on some products we sell, we find the fulfillment fees to sometimes get as low as less than 1/2 of what it would cost us to ship direct, even by the cheapest method we can use.
If you're looking at the fulfillment fees compared to what you get charged to ship a package, make sure you're also considering that Amazon helps distribute the products to regional fulfillment centers. It's Amazon's employees that pick and pack the orders. Amazon pays for the box it ships in. Amazon handles customer service and return processing, or reshipment if the item is damaged in transit, amongst other things.
Admittedly, this is not easy to consider all of the pros and cons, expenses and savings. FBA can also be a difficult beast to deal with when they don't check in your inventory, temporarily lose 300 units. Having to deal with Seller Support will cost you in terms of stress and its effects on your receding hairline, or your liver if you need to keep a bottle on your desk as you try to get problems resolved.
Also, at least based on my own buying habits, (I know hardly representative) I'm much more likely to feel "safe" buying something on Amazon. But either way,to hit the most audience and maximize global profit, you can simply sell in both venues. Given some of the sales management tools that let sellers manage inventory & pricing across platforms, it doesn't have to dramatically increase the overhead of a sales & fulfillment operation.
As for switching from selling wholesale to Amazon to Marketplace, it may actually result in a net increase in profits because it is probably likely that selling retail via FBA will get more money in the sellers' pockets than the wholesale cost.
It really would be nice if Amazon gave sellers more certainty in this process though. It sounds like details & timing have yet to be fully nailed down, and it's the type of change that a business should be given something like 6 months of advance notice.
FBA is not a prerequisite for Prime eligibility. We sell on Amazon via Seller-Fulfilled Prime. They have pretty strict time tables for fulfillment to maintain eligibility, and you have to print your shipment labels through Seller Central, though you can link your own UPS account so not to pay extra fees.
We signed up for FBA and they charged $5.95 to fulfill each order. Even if picking and packing costs $1-$2, you still make more profit shipping it yourself. We used to have 3 workers fulfill 150 orders a day from our warehouse which equals $0.80 to "pick and pack" and can be sent to any channel.
A lot of eBay sellers actually source from Walmart. I have. I works pretty great... sometimes. Just gotta be quick about getting their clearance items or pricing mistakes.
However, this:
> And after you're accustomed to 1-2 day shipping from Amazon, waiting a couple weeks for an eBay shipment is a non-starter.
Ignores the fact that (at least for the stuff I buy), you can usually get 2 day shipping from eBay sellers. The only time I have to wait more than a few days when ordering on eBay is if what I'm buying is rare enough that I have to buy from an out-of-country supplier -- and those things are rarely or never found on Amazon anyway.
I like eBay well enough and I have my quibbles with Amazon (especially the marketplace) but they definitely have the one-click-and-you-have-it-tomorrow game nailed.
There's no question about that.
But personally, this isn't a big deal for me. That's one of the reasons that I've really taken to "Amazon Day" for shipping -- I rarely need something the next day, and am entirely happy to wait up to a week for my Amazon order in exchange for only having one shipment per week.
My cutoff for "too long" tends to be a week or two, depending.
I was selling off some old PC Magazines and Bytes from when I was a teenager and was surprised that magazines aren't supposed to be shipped via media mail since they've got advertisements in them.
Priority Mail != Media Mail
That's Amazon Prime. Non-prime purchases are, in my experience, deliberately delayed. I'm two days from their New Jersey warehouse, and my last three purchases were all delivered in 7 business days or longer. All items were fulfilled by Amazon.
> waiting a couple weeks for an eBay shipment
As a former seller on ebay (20-30 items a month), getting things out on time is a priority for lots of people. Especially sellers shipping a lot of packages. Namely, because you want those good ratings from customers. Get a bunch of neutral/bad reviews because of shipping, and your sales will plummet.
That assumes equivalent costs in other parts of your operation. But with FBA, isn't Amazon doing your stock-keeping for you? You can avoid paying for warehouse space if Amazon is your warehouse.
If your inventory sits too long in their warehouse, the fees go from "regular" storage fees to "long-term" storage fees. Those fees are much higher, which incentivizes the seller to put the stuff on sale to blow it out of their warehouses, or you can have the inventory sent back to you.
Also, fees vary by category and season. Around the holidays, you'll see them making a push to increase long-term storage fees to make way for the stuff that will actually sell, and on categories which are hot for the holidays, you might see them providing incentives with lower storage fees.
I'm not the primary person that deals with Amazon FBA, but he sits next to me. Don't take what I'm saying as the gospel, but this is based on somewhat second hand experiencing and reading some of the emails that come through. My partner pays more attention to those details.