In my last Amazon vs. eBay post I explained why Amazon is the right horse to bet on.
In this post I want to shed some more light on this claim. From the demographic viewpoint the conclusions become pretty clear:
Amazon users are:
1. More Educated - 36% of its users hold Bachelors and/or Graduate degrees. Only 27% of eBay users falls into this category.
2. Wealthier - 20% of its users earn household incomes of over $100,000. 17% of eBay users earn the same.
3.Younger - Analyzing the trends shows that eBay users are generally defined as older, whereas Amazon users are generally defined as middle-aged.
4. Diversified - 44% of eBay users are female – compared to 51% of Amazon’s. Overall, Amazon’s population is mixed, whereas eBay’s is mainly masculine.
eBay users are:
1. More Loyal - 54% of Amazon’s users are defined as Passers-By by quantcast. Only 33% of eBay’s users are defined as such.
Although eBay users may be more loyal (58% regular visitors and 9% “addict” users), Amazon has 46% regular users and almost no “addict” users. Amazon’s chief officers are aware of these figures and efforts to preserve clients has increased over the last 2 years. Features such as “Amazon Prime” are intended to increase the Amazon user’s loyalty.
It appears that Amazon wins in 4 out of 5 criteria. See the charts below to get better visual indication on this:
eBay vs amazon- source: Google ad planer
eBay vs Amazon - demographics
amazon vs eBay- source: Quantcast
What’s The Bottom Line?
eBay users may be more loyal, but Amazon gets more new visitors every month. Amazon users are also more educated and wealthier. Amazon wins in an almost flawless knockout (4 out of 5 criteria). So I think it is safe to say (again) that our main bet for the 2010-2012 leading marketplace remains Amazon.
I would love to hear your thoughts and predictions about this trend. You are welcome to discuss this issue with our team of eCommerce experts.
Amazon.com is steadily becoming the most prominent player in the retail marketplace. During the past few years, Amazon has gradually diminished the gap itself and eBay, and now even starting to grab the lead. In this race Amazon appears to be the winning horse.
How do we know?
Amazon has been growing at an average of 29% each year, for the past 4 years. That’s a staggering statistic, especially given the fact that the #1 marketplace – eBay – has a significant lower growth rate than Amazon.
In fact, Amazon is growing on average 27% faster than eBay (based on monthly GMV calculation). While eBay is struggling to keep its head above the water in terms of growth rate (Q4 2008, Q1 2009, Q2 2009, Q3 2009), Amazon is maintaining a healthy growth rate of average 28% in the last 12 months (Q3 2008 – Q3 2009). Amazon’s growth is made even more impressive considering the current economic climate.
#1: From Google Insight comparisons, we clearly see how Amazon is closing the gap on eBay’s lead (Q4 2008 is the point where Amazon starts to close the gap).
#2: Here we see a tied battle during the last year. However, in Q4 2009 Amazon actually overtakes eBay when comparing the number of unique visitors to it’s website.
sources: Compete.com, Google insight
So it appears clear that Amazon is growing faster then eBay, and will probably become the online marketplace retail leader by 2012.
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The question remaining is how does amazon compares to the rest: internet, eCommerce and retail? Well, since Q3 2006, Amazon is growing faster then eCommerce itself (which is growing faster then retail sales).
This is quite a stunning conclusion and I feel it bears repeating: TheeCommerce market is growing faster than the retail market… and Amazon is growing faster than the eCommerce market.
Amazon earnings clearly reflect this trend:
Amazon earnings
Why Amazon?
There are 2 main reasons for Amazon fast grow results, as Scot Wingo from channeladvisor indicates:
1. 3rd Party Marketplaces: Amazon strategy is to lean heavily on 3rd party merchants who wants to sell their inventory in the Amazon marketplace. Recently, Amazon was smart enough to let 3rd party merchants sell more on it’s marketplace – a good strategy to avert inventory risks during the economy down turn. Now that the economic climate is improving, Amazon can roll back and return to selling more of its own inventory (33% of amazon sales are 3rd party merchants).
2. Prime Shipping: Amazon’s free shipping strategy has proven to work. Amazon offers free 2-Day shipping on all items that are eligible for amazon prime, and most items are eligible for amazon prime (since most items are amazon items and not 3rd party items).
What Should I Do As A Merchant?
It appears safe to say that by 2012, Amazon’s marketplace will reach the size of eBay’s marketplace. Our best advice is get into the Amazon marketplace as fast as possible, and combine that with the current business strategy of your online retail business.
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If you’re already selling on Amazon, then we advise you to Win the Buy Box - as this is a key element to increasing your Amazon profile and bringing more traffic your way.
Finally, you can always consult our team of eCommerce experts for additional resources.
imOnline’s full-service program is an performance-based model program, where we analyze and evaluate the relative strength and weaknesses of each merchant.
We mainly look for small to medium-sized companies that already generate $50K- 250K+ per month in online sales or $100K-500K in offline sales. We aim to boost sales by at least double.
We offer clients with this kind of potential to join our full-service program.
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