I wonder how it is possible that some products are sold on eBay via auctions for oftentimes half the price that they cost e.g. on Amazon?

The products that I have in mind are headphones by a quality brand that cost ~120 on most sites (including Amazon and their official Teufel website) but on eBay you get them for around 80+ if one uses the "buy now" option and for 60-75 if you take part in an auction. Furthermore the price varies considerably between different sellers for the "buy now option" on eBay.

closed as too broad by Nathan L, JoeTaxpayer Sep 27 at 20:41

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    Maybe next time, provide more specifics with the question. Also select the answer that you accept as solving your issue so that others see it is answered. – garth Sep 25 at 8:52
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    @garth Not sure one should mark an answer as solution already now. The question is just three hours old. The question would surely profit from some examples. – Trilarion Sep 25 at 12:02
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    This doesn't seem to be a question about personal finance, to me. – David Richerby Sep 25 at 13:19
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    Take your pick: the item's condition is not accurate, the item is stolen, the item which gets shipped is a knock-off, It could be a scam (ebay accounts get hacked all the time and hackers post items which cause people to feverishly buy and when the item never arrives or is a literal box of rocks then it can be impossible to get results through ebay's resolution center), the item being sold is an older model, or in the best of cases the seller just really wants to get rid of the item or the vendor is seriously overstocked. – MonkeyZeus Sep 25 at 13:52
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    The question is strange. Why would I buy something on Ebay for more than I would pay on Amazon? I would only buy something on Ebay for less than I would pay on Amazon, as Amazon is safer and more convenient. Since no sensible person would pay more, then prices have to be less on Ebay for any sale to occur. Can you explain why you think prices should not be lower on Ebay? – Eric Lippert Sep 25 at 20:24

10 Answers 10

up vote 72 down vote accepted

There are several possibilities:

  1. The Amazon seller wants a bigger profit than the E-Bay seller.
  2. The Amazon seller has higher costs than the E-Bay seller. This can be a more expensive source, or higher overhead costs.
  3. The items are not really the same, for example the E-Bay items could be old stock, damaged, used, grey imports without warranty or even fake.
  4. The E-Bay seller has reasons to sell at dumping prices. This could be to build his portfolio of good rating or that the odd low-selling item does not hurt his overall calculation (E-Bay charges less for auction than fixed-price)
  5. E-Bay has a low entry-barrier for new vendors. So it may just be that a newcomer misjudges the real sales price he needs to cover all his costs.
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    #3, add there 'stolen from factory', 'not tested OK by QA' and similar causes. What to do with faulty production batch? Code says 'destroy' - but some people prefer to sell these on ebay... – Arvo Sep 25 at 12:58
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    Just as a comment to different sellers between eBay and Amazon, in the areas I shop in on both sites, there have been many instances where the same "vendor" is selling on both sites, with usually only minor bottom-line pricing differences depending on shipping. – Milwrdfan Sep 25 at 14:17
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    @Milwrdfan in fact it's possible to buy on ebay and have the item arrive in new amazon packaging from an amazon warehouse. If you then track it down the same or a similar seller will exist on amazon with "fulfilled by amazon" on the listing – Chris H Sep 25 at 14:31
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    #6: the bidding price seems low but if it's not bid up to something that the seller likes, the goods will mysteriously become "unavailable" just before the auction closes. – CCTO Sep 25 at 18:59
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    @Trilarion: A very general question can only get a very general answer. Anyways, if you want to know what is exactly the case you have to specify the case first, and then find someone who has internal knowledge of the vendor. Bottom line is, the are a lot of reasons, so be careful when you think you are making a bargain. – Daniel Sep 26 at 7:43

Look carefully at shipping charges. When I've seen "prices" that were much lower than comparable products they've often been accompanied by sky-high shipping prices; a $20 item with a shipping cost of $80 adds up to the same $100 as a $90 item with a shipping cost of $10.

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    This is not the problem – Sebastian Sep 25 at 12:36
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    @0rangetree Are you sure? If the item is being sent from overseas, then you're the importer, so you have to pay customs and taxes. No seller will state that. You may get lucky and post office clerk might believe in "gift" or "value: $5" label, but the customs and tax still apply, you just get away with tax evasion. – Agent_L Sep 25 at 14:09
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    @0rangetree it's not always the case but it certainly happens. – Kevin Sep 25 at 17:02
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    I believe that for this very reason the sort by price + shipping lowest/highest first is a thing. – Matt M. Sep 26 at 3:48
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    @Agent_L: many sellers on Ebay do state that, and even have calculators for the amount. – Martin Argerami Sep 26 at 12:50

Generally one of two cases.

But I'll briefly mention a third: Go-backs. When you return an item, well for any reason, they don't bother noting the reason, and if the reason is "defective" they do not take a swing at fixing it. They throw it in a bin with all other go-backs, and auction off the bin. People buy these bins and resell the items on eBay. Since they are one-offs and not a continuous supply, eBay is the better platform.

Counterfeit goods vs the real McCoy

If you buy an item from Amazon Proper, meaning "Sold by and shipped from Amazon.com", you are fairly likely to get a genuine, legal product licensed for sale in this country. Generally, Amazon Proper has the same quality filters as US retail stores - for instance City Electric will only sell you LED fixtures that are UL listed and pass FCC Part 18 requirements, and usually so does Amazon Proper.

Whereas on eBay/Alibaba/Amazon Marketplace, you get several things, because many of those genuine, legal goods are made by contractors in Asia using subcontractors.

  • Someone sets up a factory to make counterfeit goods, possibly using stolen plans or replica dies (the subcontractor who made the dies for the manufacturer's contractor, makes a few extras for his buddy who sets up a counterfeit line).
  • QA rejects from the genuine article's assembly line that have been dumpster-dived.
  • Genuine items that have been stolen from the factory.

Since the QA and stolen items are "one-offs", eBay is the better platform.

Amazon Prime shipping vs. ePacket delivery

For people with enough money, Amazon will cheerfully give open access to their warehouse infrastructure, even for companies who don't want to be part of Amazon Marketplace (the "wild west"). Someone like FMC Mining might use this to ship specialty drill bits to their 9 customers. But if you do want to be part of Amazon Marketplace, your item qualifies for Prime Shipping -- even though it's Marketplace! And that is attractive to many consumers. However, this "platform access" is very expensive. It is particularly harsh on small/inexpensive items.

If you're like me, you tend to look at mainly/only items with the Prime delivery feature. The sellers of cheap Cheese junk know that. So they pay the premium to have their products in the Warehouse/Prime system, and tack it on to the cost of the item. So it's quite a premium. Yes, this is you paying for Prime. Often the same seller (looking at you, uxcell) will also offer the same item on eBay.

In that case, it ships via "ePacket delivery" from China, which is super-cheap. This is a weird service where the US Postal Service actually has a presence in Shenzhen (right next to Hong Kong) and these "ePackets" are essentially delivered right into USPS hands. Perhaps, like TSA Preclearance, they also clear customs - a lot easier to clear "the usual daily truckload" of 2000 packets of entirely LED lights at the truck in one batch, rather than one at a time in fifty US ports of entry.

EBay items are typically ePacket.

The contrast in price between ePacket and Amazon Fulfillment Services is enough to give you whiplash, and is enough to explain the price difference between eBay and Amazon [Prime].

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    "The contrast in price between ePacket and Amazon Fulfillment Services is enough to give you whiplash" Too true. In Germany, I can pick up the usual small electronics (chips etc.) from China, including shipment, for (far) less than it would cost me to post a small parcel to my neighbour city. I understand the logistics up to and including the large container-based shipping, but I don't understand how the last leg (inside my national delivery system) is seemingly working for free... – AnoE Sep 25 at 18:29
  • Do you have anything to substantiate the first paragraph of your answer? That such practices are commonplace on eBay is a fairly big claim to make, and has huge implications if true. The YouTube video you linked to is about liquidation stock, and says nothing of reselling defective items. – Hashim Sep 26 at 1:27
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    If you buy an item from Amazon Proper, meaning "Sold by and shipped from Amazon.com", you are nearly guaranteed a genuine, legal product licensed for sale in this country. Uh, no, no, no, no. – Fake Name Sep 26 at 6:00
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    @FakeName ah, I see where you actually have 4 links there. Still, they don't support your claim, and simply affirm what I said in my answer. They all have the same problem, they are confused and think "Fulfilled by Amazon" is some sort of mark of quality. My answer makes clear why that is not so. FBA only describes how it's it does not change the fact that Amazon Marketplace sellers are shady, and hey are definitely not Amazon Proper. To repeat, Fulfilled by Amazon IS NOT Amazon Proper. You realize this, yes? – Harper Sep 26 at 8:19
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    @AnoE It is because of the Universal Postal Union. This WaPo article explains it. – royhowie Sep 26 at 13:46

A possibility may be that you're dealing with drop shipping. Sometimes this also happens on Amazon. Usually, if an item is sold on Amazon and ships from the US (or your country), this means that someone has taken on the cost and logistics of having the item shipped to them, warehousing it, and shipping it on to the buyer from somewhere in proximity to their customer base. If the item is sold on Amazon Prime, you can be assured that this is the case.

On eBay (more-so than on Amazon, in my opinion), it's very common to see items that are shipped directly from China. The seller never possesses the item. They're just taking your payment and placing an order directly with the manufacturer who ships the item(s) to you. This allows the seller to significantly reduce the cost of doing business. For the customer, it means that your item may take weeks rather than days to reach you and if you have a problem with it, the return process to China is may be much more challenging, possibly to the point where it isn't worth pursuing it. Oftentimes, that's what the price differential buys you.

  • Actually this happens on Amazon too. Many fitness trackers are directly sold from China with the same problems when sending them back. – Trilarion Sep 26 at 6:51
  • @Trilarion I acknowledged that it happens on Amazon too, but at least in my experience, it's much more of the norm on eBay. In any case, it's a factor worth understanding. – Sam Hanley Sep 26 at 14:25

Without providing a specific example, I can only give a generalised answer with some possible reasons:

While Ebay does have buy-it-now products, predominantly it is an auction with lower starting prices, and therefore items may often not reach the sale price or RRP. Ebay includes second-hand items, and people forward-selling unwanted brand new items that they have recently been given or purchased. Also, Ebay may have more competition in various industries especially electronics, and attracts OEMs.

Amazon sells brand new items, and attracts more brand names and authorised resellers of brand names. Also Amazon is a more onerous and lengthy process to be accepted, can be difficult for OEM products, and this is a barrier to some lower priced sellers.

  • It might also be that additionally Amazon takes a larger cut than Ebay as man in the middle. – Trilarion Sep 25 at 11:59
  • eBay BIN items are often very similar in price to Amazon (comparing new items that are unlikely to be fake). The auction aspect makes for a very tempting hook – Chris H Sep 25 at 12:27
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    I'd say it's a long time since ebay was predominantly an auction site. I don't know what the numbers are, but while Ebay started out as an auction site I'd say the majority of listings are now BIN, and over the past five or ten years Ebay has worked quite hard to push that side of things. – Bob Sep 26 at 9:02
  • Yes the number of BIN items have increased, but there are still plenty of auctions constantly happening, and at it's core, it is an auction site. – garth Oct 12 at 1:25

One other possibility that I haven't seen mentioned is that most sellers have a 'manufacturer's suggested retail price' (MSRP) associated with each product. Retailers will have deals with the manufacturer where they cannot sell at less than that price unless they negotiate an exemption. What the retailers pay for those goods is typically much less than this price.

Often the retailer would like to sell at a lower price because they think they will sell more units and make up the difference e.g. undercutting the competition. But if they do that without the manufacturer's permission, it would endanger their relationship and possibly and/or be a breach of contract.

It's possible that what you see on Amazon is the MSRP. The fact that the price there matches the manufacturer's website tends to suggest that this is the case and the Ebay seller is not subject to the MSRP or is using this as a back-channel to get rid of excess inventory.

Most of the other answers here are also plausible. This is just one possibility.

  • Surprised no-one else has mentioned this. I've purchased expensive electronics on eBay before (e.g. surfacebook 2) for hundreds of dollars less than elsewhere - and from reputable sellers. We're talking brand new, sealed, registers online, delivered promptly, perfect condition devices here. I suspect they're just selling at below MSRP. – NPSF3000 Sep 28 at 5:05

Marketplace sites (including both ebay and Amazon) are full of sellers selling questionable merchandise. Sometimes it is counterfiet. Sometimes it is last years model. Sometimes it is a "grey import" of a product intended for a different country. Sometimes it is a used product advertised as new.

The difference between eBay and Amazon is that while both have marketplace operations, Amazon are also a seller in their own right. This means that big brands have far more leverage over Amazon than over ebay.

As I understand it this means that there are certain brands that the general public simply can't sell on Amazon (At least as "new") because Amazon lets the brand owner remove listings at will and the brand owner removes listings that don't come from Authorised dealers.

Because seller vendors sites like Ebay and Amazon are some of the biggest gateways to fraud on the internet and everyone thinks of them like common household names.

These sites below are sources for many people who buy knock off products and sell them on venues like Amazon and Ebay every day, all day, and there's very little regulation on the subject.

http://www.alibaba.com/

https://www.aliexpress.com

https://www.dhgate.com/

If you EVER want to buy anything on a website that allows anyone to register and sell things, search on alibaba, aliexpress and dhgate. If you can find it there, it IS a knockoff. Even if the statistics on that are not 100% correct, the frame of mind you should adopt is that they are knock offs plain and simple.

If you're OK with that, then go ahead and buy it up. Otherwise, order from a legit source like the company's home page, best buy, etc. NOT Amazon. NOT ebay. Or heaven forbid just go to a store if they exist offline anymore.

Also keep in mind that sites that source knock offs come and go. The ones I mentioned may not be the go-to source anymore but I promise you the wholesale distributors of knock off products always have their channels to get the products here. It will be a long time before sites like Amazon have this epidemic under control. In the meantime, they tend to have excellent customer service principals and return policies so take advantage of those.

If the price is too good to be true, it is definitely because that product was manufactured and sold for a lot less. Almost positively not through the rights holders, but not necessarily at a loss of quality. It just depends on what you're getting.

eBay has lots of fake headphones. Expensive headphones are a perfect product for counterfeiting - you only need to recreate their case and a lot of people will never notice that something is wrong.

I personally had an experience of buying headphones from eBay which were advertised as new, and cost about 20%-30% less than in a retail store.

When they arrived, I was surprised by the bad sound quality they had. They cost about $150, but had a sound of the cheapest $10 headphones.

The look & feel of the headphones themselves was almost genuine (at least I couldn't find a difference), but the included manual and other accessories definitely looked like a copy.

In the end, I was able to get a refund by following eBay's dispute resolution process.

Another scenario that I haven't seen in an answer so far is one that a family member of mine encountered recently:

The "seller" purchases an item at full price using stolen credit card information and has it shipped directly to you. They collect the steeply-discounted price from the buyer through an online payment system and pocket the money minus any transaction fees.

This could be what has happened when the following are true:

  • The genuine item is received from a well-known distributor such as Amazon, CDW, etc.,
  • The customer on the enclosed invoice is someone the buyer has never heard of, and
  • The price on the enclosed invoice is higher than what was paid by the buyer

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