The Big 3 Online Marketplaces

If you don’t want to create your own ecommerce website to sell your product or service, you can tap into the enormous customer bases of third-party online marketplace such as Amazon, eBay or Etsy.     

There are several advantages to placing your product on an online marketplace. First, you can start now, with few upfront costs. The customer base is huge, but you can tailor your ads to specific audiences. You can outsource fulfilment and returns and reach across the globe. 

The sites make the listing process as straightforward as possible, as it benefits them to do so. They also offer detailed suggestions and advice on selling.   

While the top three marketplaces in the UK are global behemoths, you may not have heard of some of the sites further down the top ten list, but they are worth a look as well. You do not have to sell on just one site and if you have a lot of product to move, some suggest spreading your reach over more than one. While there are differences between fees, shipping and product categories, the decision on what site to use will largely be dependent on what type of product you are selling.

Below we take a closer look at the top three marketplaces in the UK, but first here are a few more to consider. 

Online Marketplaces

1. Amazon

2. eBay

3. Etsy

4. Folksy

5. Not on the High Street

6. Wish

7. Fruugo

8. OnBuy

9. Cratejoy

10. Newegg

Amazon: The Giant

Amazon is the most popular online marketplace in the world. It sells products directly while also serving as an intermediary for other sellers, taking a cut of each sale.

Amazon’s numbers are colossal. As of January 2022, Amazon had 9.7 million sellers worldwide, of which 1.9 million are actively selling on the marketplace, and 300 million customers. In 2020, third-party seller services were responsible for £67.25 billion in sales. Spurred by the pandemic, sales for independent businesses selling on Amazon grew over 50% compared to 2019. The US has the most active sellers on Amazon (1.1 million); the UK comes in second (281,257), and Germany, third (244,425). The UK is Amazon’s third largest market (£26.65 billion), with the US first (£262.31 billion) and Germany second (£31.16 billion).  

Those numbers are Amazon’s biggest advantage, but there are others.

Selling on Amazon

Pros	Cons
Lower fees	Limited categories
Buyers’ trust	Fulfilment fees
More branding opportunities	Can be difficult to list products
Fulfilment services	Very competitive; price driven

Amazon Fees

With the Individual plan, you pay a certain price every time you sell an item. The Professional plan is a monthly cost, no matter how many items you sell. For both plans, Amazon also collects a referral fee on each sale, which is a percentage of the total transaction and varies by product category, typically 8-15% of the purchase price. The individual plan is recommended if you sell less than 35 items per month. You can visit Amazon’s pricing page here for details.  

There are additional costs if you wish to use Amazon’s fulfilment service.   

Ebay: Everything including the kitchen sink

Despite starting out as an auction site and gaining a reputation as being the world’s best boot sale, today 81% of eBay’s 1.1 billion listings are brand-new items. Not as large as Amazon in terms of revenue or number of sellers and customers (no one is – yet), eBay is still an enormous global retail platform. In 2021, eBay had 159 million users and 19 million sellers worldwide (double the amount of Amazon) – 31% of those sellers are from the US and 29% from the UK. For the year ending March 2022, eBay’s annual revenue was approximately $10.3 billion, which is dwarfed by Amazon’s revenue of $477.75 billion for the same period.   

Ebay will allow you to sell just about anything as long as it is legal.

Selling on eBay

Pros	Cons
Branded presence	Fees can add up
Seller and buyer protections	High competition on price
Reliable feedback features	Potential for unreliable buyers
Easy to set up, easy to use	Final costs to seller may vary
Customisable
Use of auctions

eBay Fees

EBay charges a listing fee when you create a listing, and a final value fee when your item sells. Other fees may apply if you add upgrades to your listing, or if your item sells or ships to a buyer in a different country.

Private Sellers:   Private sellers can list for free on eBay. Once you have used your monthly allocation of 1,000 free listings (or more if you have an eBay Shop), you’ll be charged a certain amount for each new listing created.

You pay one final “value fee” for items you sell on eBay, which is calculated as 12.8% of the total amount of the sale (which includes the item price, postage, taxes and any other applicable fees), plus a fixed charge per order. If the total amount of the sale is over £2,500 for a single item, you’ll pay 3% for the portion of the sale price above £2,500.

You can visit Ebay’s fees for private sellers here.

Basic eBay Shop: fees can be found here.

There are add-ons such as adding a reserve or buy-it-now price, as well as subtitles, larger pictures and listing in more than one category. Use caution, as these extras can quickly add up.

Etsy: For the creatives

Etsy is more niche than its rivals in the big three. Focusing on creative products, Etsy only allows handmade goods, craft supplies or vintage items that are 20 years or older. That focus on unique items offers the seller a more tailored audience than Amazon or eBay. In 2021, Etsy had over 120 million items in its marketplace, and connected 7.5 million sellers with 96.3 million buyers.   

Best-selling categories on Etsy include the following. Note that many of these are lighter weight and less expensive items, which makes shipping more cost effective and your bottom line bigger.

1. Stickers
2. Notebook and journals
3. Jewellery 
4. Home decor
5. Digital designs/graphic prints
6. Posters
7. Toy and baby items
8. Vintage items 
9. Organic cosmetics
10. Sewing and crochet patterns

Selling on Etsy

Etsy Fees

Etsy selling fees can be found here.  When you sell, there is a 6.5% transaction fee on the sale price (including delivery). If you use Etsy payments to collect payment, there will also be a charge of 4% + processing fee.  For low priced items these costs can be prohibitive.  

Give it a go with little risk

There is no one right answer when deciding on an online marketplace. All three of these platforms offer enormous audiences to connect with and powerful selling tools at your disposal. The decision as to which to use will mostly be driven by your product and its intended audience. As there are very few up-front costs and most are easy to set-up, you can start selling as early as today with little risk.