One of the most effective ways to grow your ecommerce business is to join an online marketplace—or add another one to your multichannel operation. Businesses that build and scale on a marketplace are poised to serve thousands of customers they otherwise wouldn’t have reached.
Customers are flocking to online marketplaces, and they don’t seem to be slowing down. Consider these stats from Marketplace Pulse:
- Sellers on Amazon brought in $295 billion in sales in 2020—accounting for over 60% of the company’s GMV.
- After being in decline for a few years, eBay also saw tremendous growth in 2020 as shoppers turned to the veteran marketplace for everyday necessities and collectibles.
- In 2020, Etsy doubled its GMV from the previous year as users seeking face masks were hooked by the marketplace’s other artisan offerings.
- Small but mighty, Walmart’s marketplace had 70,000 sellers at the end of 2020, doubling in size from the previous year.
When weighing which marketplace is right for your business, it’s crucial to wrap your head around the various fees each platform charges, from listing fees to fulfillment and everything in between. How does each marketplace stack up? We went straight to the sources and compiled all the nitty-gritty fees at four top marketplaces.
First things first:
💡 Joining one of these online marketplaces is free, but extra perks come at a price.
The good news? It’s free to create a seller account on each of these platforms. As you explore the marketplace, however, you may bump into paywalls where you can’t proceed without upgrading your account. Whether or not to sign up for a premium membership depends on your business goals, like the number of products you plan to list and whether you want to take advantage of in-app advertising.
Walmart currently does not offer a monthly subscription service, but selling on its platform requires initial approval. Some products require approval on Amazon as well. An Individual plan on Amazon does not cost a monthly fee, but sellers must pay $0.99 per item sold. The Professional plan costs $39.99 a month and includes perks like the ability to run free shipping promotions and in-app ads, customize shipping fees, and add additional users to your account.
eBay notably offers five different subscription tiers, ranging from a $4.95/month plan all the way up to $2,999.95/month enterprise plan. The five plans offer scaled benefits such as lower fees and more free listings—the pricier the plan, the better the perks. Etsy’s premium service Etsy Plus is a flat $10/month and offers credit for in-app advertising and listing fees, along with features to make your shop stand out from the crowd.
💡 A listing fee (or insertion fee) is what a marketplace charges a seller for each item posted for sale on its website, regardless of whether or not the item sells.
Before you even make a sale, some marketplaces charge you a fee for listing an item on their website, known as a listing fee. Although listing fees might initially scare you away, keep in mind that these fees help ensure that the product catalogs are higher quality and limited in number. Adding just a small fee per item can encourage a seller to reconsider posting items that may not satisfy consumers’ needs.
Etsy charges a listing fee of $0.20 per item listed for sale. If an item doesn’t sell after four months, the listing auto-renews and you’re charged the listing fee again. This helps keep postings fresh and can encourage you to optimize postings that are not performing well.
eBay allows free accounts and “Starter” users to post 250 items per month for free. This threshold is higher for subscribers of eBay’s other membership plans. Any listings over that number are charged an “insertion fee” based on the category—most are $0.35 per listing. Check out the full list of eBay’s insertion fees.
Walmart boasts that it doesn’t charge any fees other than when an item sells. Amazon lets sellers have up to 1.5 million active listings per month for free. Any additional listings are charged a high-volume listing fee, a monthly fee of $0.001 per listing over the 1.5 million threshold.
💡 A referral fee (known as a “transaction fee” on Etsy, and a “final value fee” on eBay) is what a marketplace charges a seller when an item sells. The fee is generally a percentage of the sale price based on the category of the product, but can be combined with an additional flat fee.
So you’ve got your listing up for sale. Congratulations! Now, what happens when someone actually buys it? The top four marketplaces are alike in charging you a certain percentage of the total sale, known as a referral fee, when an item you list on their site sells. The name makes sense—the marketplace effectively referred your product to the customer, so they want a piece of the pie.
Let’s break it down.
Note: The sale price is the listing price of the item, plus shipping and gift wrap charges.
Etsy makes things easy to understand by charging 5% of the sale regardless of what type of product you sell. That means even if you sell a $5 face mask or a $500 table, Etsy will take 5%.
The other three marketplaces vary their transaction fees by category, so it’s important to look up the fees for the products you’ll be offering. Walmart and Amazon offer nearly identical fees to each other, but eBay’s rates are less varied with 12.55% across most categories.
The table below includes the pricing for some popular product categories. View the full list of each marketplace’s referral fees:
Snapshot of Referral Fees by Product Category
Finally, eBay and Amazon charge an additional flat fee per item sold. Amazon charges $0.99 per item sold for users who are not subscribed to the monthly Professional plan, and eBay charges $0.30 per order (note that an order can include multiple items).
Shipping Fees (Fulfilled by Seller)
💡 Shipping fees are the cost of postage and transportation used to ship a product to a customer.
Most marketplaces allow sellers to set the shipping rates customers will pay for each product. Sellers may choose to set their shipping rates to most closely reflect what they themselves will pay when shipping the product, based on the shipping provider used, the size of the package, and the distance it must travel. Or sellers may choose to offer free or reduced-price shipping to encourage a sale, or add signature confirmation or insurance for an extra fee.
*See full list of Amazon shipping credits here (click “Fulfillment by Seller” tab).
Sellers on Etsy and eBay can purchase shipping labels directly from the marketplace at a reduced price than third-party shipping partners. Unlike Professional plan members, Individual plan members on Amazon cannot set their own shipping rates. Amazon sets shipping rates automatically based on the product category and shipping service selected. The seller then receives a credit for the shipping amount charged.
Fulfillment Service Fees
💡 Fulfillment service fees are costs associated with partnering with a fulfillment program, including managing the inventory of your products, fulfilling orders, and shipping products to customers.
Businesses that sell multiple products can quickly become bogged down with the labor and time involved with personally shipping products: packaging the product, writing out the customer’s address, and going to the post office. In this case, it is more financially efficient to pay extra upfront to simplify the shipping process by using a fulfillment service.
Both Amazon and Walmart offer fulfillment services: Fulfillment by Amazon (FBA) and Walmart Fulfillment Services (WFS). Sellers who use a fulfillment service ship their inventory to a fulfillment center for warehousing. The fulfillment center organizes, maintains, and manages the inventory of the sellers’ products. When customers make a purchase, workers at the fulfillment center select the products from the warehouse, package the items, and ship them to the customer.
Walmart Fulfillment Services (WFS) Fulfillment Fees
Fulfillment by Amazon (FBA) Fulfillment Fees (non-apparel, abbreviated**)
*Packaging weight (i.e. weight of box and packing materials) is included in the shipping weight of Walmart’s fulfillment fees but not Amazon’s. This means that the same product may be in a lower cost tier with Amazon than with Walmart.
**See the full list of Amazon fulfillment fees here.
Fulfillment services also charge sellers a fee for storing inventory. The prices are dependent on the time of year that you store your inventory. Prices are higher at both marketplaces during the busy holiday season of October–December. Walmart differentiates its fees depending on how many days your items will be stored in its facilities during that season.
Inventory Storage Fees
Since eBay and Etsy don’t offer fulfillment services, storing inventory for the items you want to sell on those marketplaces is entirely your responsibility. This might mean you manage the inventory yourself if you have a small number of products, or you partner with a third-party logistics (3PL) provider.
Overwhelmed by all the numbers? Never fear. Here are a few conclusions to lead you in the right direction.
- Best fit for: Brands, growing retailers and new businesses
- Pros: Greatest customer reach, robust fulfillment services
- Cons: High level of competition with other sellers
- Best fit for: Resale products, select categories
- Pros: Flexible membership options, 250+ free listings per month
- Cons: No fulfillment services, not growing as fast as other marketplaces
- Best fit for: Artisans, crafts, curated and unique products
- Pros: Lower cost, simple fees, focus on artisan goods (if applicable)
- Cons: No fulfillment services, limited membership features
- Best fit for: Brands, growing retailers, expanding beyond Amazon
- Pros: No listing fees, less competition than Amazon, fulfillment services
- Cons: No premium membership options, less reach than Amazon
Whichever way you choose to go, the great news is that you have options for growing your ecommerce business with a marketplace presence.
(Note: All fees listed were compiled at the time of writing this piece. For the most up-to-date information, visit the marketplaces’ websites.)