Amazon Vs Alibaba: Which E-Commerce Platform Is Right For You?
You might want to sell on multiple platforms to grow your online business. You know you can sell on Amazon, yet you've also heard that Alibaba, which has become more popular recently, is a competitor. You start to wonder whether Alibaba or Amazon is better. We'll look at the arguments for and against Alibaba and Amazon to assist you in determining which one is most suitable for your company. Read on to find out!
Whats the difference between Alibaba and Amazon?
The major difference between Alibaba and Amazon is who they sell to. Amazon works with regular people, while Alibaba works with businesses. Amazon has a marketplace called Amazon Business for business-to-business (B2B) sales, but the marketplace is popularly known for selling consumer goods.
Alibaba vs. Amazon: A Brief Overview of Alibaba
Alibaba is one of China's most popular online stores. This company is used for over 80% of all online shopping in China. Alibaba has a lot of online stores that cater to different kinds of customers, like:
- com: This is the company's main website. This website is a business-to-business (B2B) company that allows suppliers to list their products for other businesses to purchase.
- AliExpress is an online market where Chinese companies can sell their goods to people worldwide. This platform is similar to eBay, as sellers can post their items on the site.
- Taobao is another e-commerce site that Alibaba owns and runs. This site is set up to sell to Chinese people. It has everything to make, from one-of-a-kind designer items to branded items.
By offering products and services through its e-commerce platforms, Alibaba has made more than $248 billion.
Alibaba vs. Amazon: A Brief Overview of Amazon
Amazon is a big business that sells stuff online and helps other businesses worldwide. This online store sells everything from electronics to digital content to home goods. Currently, 40% of all online shopping in the U.S. is done through Amazon.
Members of Amazon Prime receive many perks for their membership fee, including but not limited to the following:
- Free shipping within two days.
- Exclusive deals
- The delivery of groceries
- Streaming services for music, movies, and TV shows
- Free books
- Free games and things for games
Amazon sold over $280,5 billion worth of goods and services thanks to these perks and services.
A Comparison of Alibaba and Amazon
Now that we've discussed Alibaba and Amazon let's see which is better for your business.
If you look at who Alibaba and Amazon serve as customers, you'll see they are very different.
Alibaba's business model
Alibaba is mostly an online store where businesses can buy and sell goods. Even though they have some business-to-consumer sites, their main focus is on the business-to-business site Alibaba.com. Even though their business with consumers is growing, the B2B market is still where they are most important.
Amazon's business model
On either hand, Amazon is focused on the market where businesses sell directly to consumers. They allow companies to sell things to people who shop on their sites. Even though businesses can buy things for their own business on Amazon, the B2B market isn't a main focus.
Which is better: Amazon or Alibaba?
Who you serve will determine which of these multiple systems is best for your business. If most of your sales are to other businesses, Alibaba might be the greatest option for your company. On the other hand, if your objective is to sell mostly to consumers, Amazon is a better choice.
The fees are the next factor when deciding between Amazon and Alibaba. When you want to sell your goods on multiple marketplaces, you normally have to pay a charge to utilize those sites.
Using Alibaba for business purposes costs money. There are two plans to choose from:
- Basic Plan ($2399 per year)
- Premium Plan ($4199 per year)
These plans include putting up products, getting questions and answering them, reporting on data, and more.
There are a few fees to think about if you want to sell something on Amazon.
Amazon can sell in two ways:
- Individual ($0.99 per item sold): This strategy is for businesses that sell fewer than 40 items per month.
- Professional ($39.99 per month): This Plan is for companies selling over 40 items.
Amazon vs. Alibaba: Which is better?
When you look at the fees that Alibaba and Amazon charge, you can see they are very different. Most of Alibaba's fees come from an annual fee, while Amazon's fees are based on what people sell. As you sell more on Amazon, the fees may increase, costing you more in the long run. On the other hand, putting your products on Alibaba costs a big, one-time fee. Ultimately, you'll have to figure out how much it will cost and how many products people can buy on the platform.
The market's place
When choosing between Amazon and Alibaba, you must look at who they serve to make sure your products are in markets that reach your target audience. In the Alibaba vs. Amazon debate, let's look at where Alibaba and Amazon both stand.
Alibaba's Market Location
China is the main market for Alibaba. As was already said, Alibaba makes up 80% of China's online shopping market, so they put much effort into that area. AliExpress is a website run by Alibaba that sells goods to places other than China. On the other hand, only people in China can buy from its official site and Taobao.
Amazon's Market Location
Amazon is very popular worldwide, and people worldwide can market their products on the site. But the United States is their biggest market. In 2020, the United States will have made $263 billion in net sales. But although Amazon has a small market share in Europe, most of its customers are in the U.S.
Alibaba vs. Amazon: Which is best for my business?
After comparing Alibaba and Amazon, you might still wonder, Should I stick with Alibaba or Amazon? There's no easy answer. Among the essential considerations to think about when making a choice is your platform is who you want to reach.
It would help if you focused on Amazon or Alibaba based on where you will most likely reach your target audience, individual consumers, or other businesses. Considering how much money you will spend on each area and how many of your target clients you can reach would be beneficial.
Will you sell using Amazon or Alibaba?
Now that you understand both Amazon and Alibaba, you can begin considering which is best for your company. If you need help getting started, WebFX can assist with selling online.
We've been making this for over 25 years, so you can be confident that we can assist you in selling better on internet marketplaces. We know how to create campaigns that get what our clients want. In the past five years, we've generated over $3 billion in revenue and processed over 12.9 million e-commerce orders.