Are you wondering whether or not it would be more profitable to sell on Newegg rather than on e-commerce giant Amazon? Stay with me and I will walk you through the necessary details regarding the two platforms.
Think of a product in your mind and Amazon already sells it. To sellers, it gives an opportunity to expose their products to millions of users in a few minutes. However, getting your product picked by customers is not as easy as it appears. Given the competition level, some may wonder if they should list their item on Newegg – Another popular e-commerce stage. The selection is a bit tricky.
In this, I am going to take you through a straight comparison between the two platforms. I’ll talk about what each has to offer to sellers and which one provides a better opportunity to succeed. So without any more delay, let’s dive straight in.
Table of Contents
- Newegg Vs Amazon: In A Nutshell
- Newegg Vs Amazon: A Quick Introduction
- Newegg Vs Amazon: How do They Fare Against Each Other?
- Newegg Vs Amazon: Which One Should You Pick?
Newegg Vs Amazon: In A Nutshell
|Best for||Computer parts||Miscellaneous|
|Net Sales||~700 million||Over $20 Billion|
Newegg Vs Amazon: A Quick Introduction
Newegg was started in 2001 by Fred Chang as a new way of doing e-commerce business. By the year 2005, the company had already entered the list of top 10 e-retailers for computer products in the USA.
In the early years, the platform was focused on providing computer accessories, physical components, and electronic items but over the years, the company has introduced several product categories such as fashion items, sports equipment, office furniture, digital games, and much more.
However, Newegg is still primarily known for computer parts and peripherals. It has a smaller but faithful customer base who always turn towards the Newegg website whenever they need anything related to computers or electronics.
Here are some features of Newegg:
- Newegg is a relatively small platform, compared to Amazon which means the level of competition is not as fierce as you’d face on Amazon.
- If you are in the computer business, It’s quite easier to sell your products on the platform since it holds good recognition in that category.
- You can customize your product page according to your preference, something that we don’t see on Amazon.
- It’s easier to build a brand and get recognition on Newegg, compared to Amazon where you may not even make a profit for the first few months.
However, there are some disadvantages as well:
- Although there are over 40 million customers, the outreach is not as good as Amazon or some other e-commerce marketplaces.
- Customer service is not up to the mark. There have been regular complaints from the shoppers.
- The overall shopping experience is not as good as it’s on Amazon. There are no fixed shipping dates
Amazon, on the other hand, doesn’t need an introduction. The owner and CEO Jeff Bezos found Amazon in 1994 as a platform to sell used books. In the next few years, the company started selling music and videos and expanding its foothold out of the USA.
The biggest turning point came in 2002 when Amazon launched FBA (Fulfilled by Amazon) which allowed sellers to use Amazon services to sell their items. It gave new dimensions to the way how online business was done before that time. Over the next few years, the company kept adding new product categories, web tools, additional platforms, etc.
Here are some additional services of Amazon:
- Amazon Prime Video
- Amazon Kindle (e-book reading)
- Amazon Music
- Amazon Pay
- Amazon Web Services
Being the largest online marketplace, it brings tremendous opportunities for individual sellers. The popularity of Amazon is such that many sellers have given up their 9-5 jobs and started working as full-time Amazon sellers for a higher income.
Here are some key highlights of Amazon:
- The biggest thing in Amazon’s favor is its popularity and brand value. Customers trust Amazon blindly.
- The platform provides you with extraordinary seller tools to search, list, and sell your products.
- The buying experience is fantastic on Amazon, meaning you’ll always have happy customers.
- Using FBA, sellers can outsource shipping, customer care, and fulfillment to Amazon.
- The customer care on Amazon is remarkable. Whether it’s for sellers or buyers, the support team is available 24/7 to help.
And here are some things that you, as a seller may not like:
- The very high number of sellers means the competition is extremely fierce. It may take a while before you get some recognition if you get it at all.
- It’s harder to get your products noticed and picked. As a seller, you will have to implement unique strategies to attract customers and rank your product higher.
- The cost of selling on Amazon may hamper your profits. There are so many direct and indirect expenses that you may not even know in the beginning.
Newegg Vs Amazon: How do They Fare Against Each Other?
Let’s talk about some areas where both platforms can be judged against each other. From a seller’s point of view, both platforms provide a good opportunity to build and expand e-commerce business but there are significant differences which we are going to discuss further.
The Products You Can Sell
Let’s begin with the basics – The product catalog. As I stated earlier in the article, Newegg started its journey solely focusing on computers and accessories and other electronic items such as gaming equipment, tools for home, toys, etc.
Even though the company makes a large chunk of its profit through electronic and computer items, it has regularly expanded its product lineup to compete with other e-commerce platforms.
Here is a list of Newegg’s complete product range:
- Computer Systems, components, storage, etc
- Computer Peripherals, and gaming equipment
- Networking tools and software programs
- Office/ home solution
- Automotive tools and accessories
- Health & Sports equipment
- Apparel & Fashion
- Toys and Other Electronic items
Amazon, on the other hand, started its journey by selling used books online but soon they realized they could practically sell anything on the platform.
Currently, you can literally find anything on Amazon. As it was famously quoted, “You can’t walk in a dark room without hitting something that Amazon doesn’t sell.”
In terms of head-to-head comparison, Amazon offers a wider range of products including clothing, food, digital content (movies, music, etc), pet supplies, beauty care, books (physical and e-books), music equipment, and much more. There are nearly 30 categories that you can your products in.
What Do They Offer for Sellers?
In terms of seller assistance, Newegg has sufficient tools that one would need to create and expand a store such as listing builder, brand promotion, marketing service, payment facilities, fulfillment, and shipping. The company’s own fulfillment and shipping service (SBN) offers 2-day delivery but only works within the United States, delivering nearly 60k parcels every day.
Amazon, in comparison, is by miles ahead when it comes to seller tools and programs. The company’s own seller central platform provides enough features to list your products, manage sales, collect payments, and much more. For fulfillment, the company offers various seller agreements such as FBA and FBM. You have the option to choose whether you want to use the Amazon fulfillment service to process your orders or you can do it on your own.
Apart from the in-house tools, you can use various third-party seller toolkits to elevate your business and marketing, reach out to more customers, monitor your sales, and profits, manage your inventory, find profitable products to sell, and stay ahead of the competition.
What Are the Payment Options?
When it comes to payments, Newegg offers a variety of options including a majority of credit card and payment processors. For international users, there are Google pay, PayPal, etc.
Amazon has an upper hand in terms of payment services it supports. Being a global marketplace, it supports nearly every payment method available including Google Pay, credit cards, internet banking, etc. The company allows buyers to pay through gift cards and third-party payment platforms as well.
Amazon also has in-house payment methods – Amazon Pay, which is the fastest and most secure way of paying. Customers also can use Amazon Pay Later to complete the payment in a few installments over a period.
Cost of Selling and Profit
Listing your products on Newegg and Amazon will cost you some money, however, there is a significant difference in both platforms. Let me break it down for you.
On Newegg, you will pay a monthly fee for your seller account and a commission depending on the product category. To list your products on the platform, you will need to purchase one of its 3 premium plans –
- Standard – No monthly payment
- Professional – $29.95/month
- Enterprise – $99.95/month
Standard plan comes with limited features and seller assistance while Professional and Enterprise plans offer a 5% and 10% discount respectively on all Newegg shipping across the states.
As for commission rates, Newegg is slightly better than Amazon. The commission rates vary between 10% to 15% for the sellers within the US and a fixed 12% for global merchants.
On Amazon, you have 2 plans to choose from – Individual and Business. The first one doesn’t require you to pay any monthly charge, however, Amazon will take a cut of $0.99 on each order. The business plan will cost you $39.99 for all the items you can sell within a month.
Apart from that, you also have to pay the referral fee which lingers somewhere between 8% to 15% except for the apparel and Amazon accessories. For clothing and fashion, the commission rate is 17% while for Amazon accessories it can go as high as 45%.
Apart from the referral fee, you will have to pay a fulfillment fee and storage fee if you’ve opted for the FBA seller agreement. If you have your own fulfillment facility along with trained staff, Amazon allows you to list your products under the FBM agreement but your products won’t fall under the Prime category.
The biggest disadvantage with Amazon is that you need to pay heavy additional costs such as closing fees on digital items, inventory damage fees if you want to move your damaged inventory, and so on.
The maths here is simple – If you have products from a specific category, you might be better off with Newegg. Amazon may have a smaller commission rate, but the hidden costs may eat up all your profit.
When it comes to seller support, Newegg has a dedicated team that is accessible to all sellers at any time of the day. You can reach out to the support team through email, or social platforms, by filling out a query form or even give them a call directly. For professional and Enterprise plan sellers, there is a dedicated account manager that will take care of your financial and seller account-related concerns.
Amazon seems to care about its sellers a bit more than Newegg. It has round-the-clock customer service with some highly skilled associates. Whether you are struggling to navigate through the seller dashboard, listing your items, or concerned about refunds, or FBA costs, the team is always at your disposal. There are multiple ways to connect including a direct phone call with an Amazon expert, email, query form, or an Amazon support forum.
As far as the customer service for buyers is concerned, both Newegg and Amazon offer 24/7 support through email, private chat, and calls.
Promotional Offers & Returns
In order to market your product and make a profit at the same time, you need to promote your items in creative ways. With Newegg, you can market your products through promotional emails, everyday flash sales, 24-hours deals, Shell shocker, etc.
Amazon has a wider range of tools to attract buyers’ attention and make a profit. You can use Amazon PPC marketing and Amazon advertisements to expose your items to a wider audience. For better sales opportunities, you can include discount offers, gift cards, and complementary products on the checkout page.
In terms of return policies, both platforms are extremely lenient. Meaning as a seller, you will have to deal with a high return rate.
Your customers can return the item any time within 30 days of the delivery. Mind you, apart from products from specific categories, the return is unconditional and you are required to issue a full refund to the customer.
Amazon, being the most trusted brand, offers easy returns to customers. That’s why you are more likely to deal with heavy returns than on Newegg. Also, you will be required to pay the return fee to Amazon on each canceled or returned order.
Overall Performance: Popularity, Global Footprint, and Ease of Doing Business
Newegg is a popular e-commerce platform but in terms of global outreach and popularity, it’s nowhere near Amazon. The latter sees more than 200 million unique visitors a month and has created a faithful customer base over the years through its exceptional service, ever-expanding product range, better customer support, and diversity.
Newegg has over 40 million monthly unique visitors which is quite impressive but just can’t be compared to Amazon. Type the name of any product on any search engine, and the first 2-3 listings will always be from Amazon. While with Newegg you need to refer to the website to find if the particular product is listed on it or not.
But don’t get mistaken by the big crowds on Amazon. The competition is tough and there are hundreds or even thousands of sellers for similar products to be able to compete with them, you will need an extraordinary business approach.
Newegg, however, is a relatively easy platform to sell on. Its favorite customers already know what they are going to buy and you get a better chance to attract that customer.
My verdict is that Amazon is a tricker platform to sell products and make a profit. Yes, there is a big product range and better seller tools but with the level of competition that persists, it might be very hard to sell your products.
Newegg Vs Amazon: Which One Should You Pick?
After the comparison, one thing is definitely clear. There is no direct competition between Newegg and Amazon, when it comes to popularity, product range, opportunities, etc.
Amazon is a clear winner in many regards but, as I mentioned, be prepared for a shaky start if you are planning to sell on Amazon. With more than 10 million worldwide sellers and thousands joining every day, it’s not easy to make a sale right from the get-go.
Newegg is a choice for Pro computer users, simply because of the range and variety available on the platform. So if you are planning to sell computer and electronic items, you will be better off with Newegg, for the initial launch.
- If your target audience is American youth, gamers, or computer geeks
- If you are trying to sell electronic items
- If you are using refurbished/second-hand products
Amazon is the right platform for you:
- If you want to work as a full-time online seller
- If you want to have a wider range of products to choose from
- If you want to sell on a global scale
- If you want to reach a wider audience