Amazon vs. eBay: A Shopper's Perspective

By Carol Kopp

NEW YORK (Minyanville) -- Five years ago, Amazon (AMZN) stock was worth about $30 per share. Now it's above $190. Five years ago, eBay (EBAY) shares were a little below $40. Now they trade around $36.

You probably know many of the reasons why Amazon is (again) beloved by investors, while eBay is still stuck in a no-man's-land of investor discontent. There's no shortage of investor analysis and chatter about both companies' strengths and weaknesses.

But there's one key piece of information that seems to have been overlooked, and to me it seems essential. That is: Which one is a better place to shop?
More from Minyanville
Did Facebook Buy Instagram Just to Keep It Away From Google?
How Much Money Has Rick Santorum Cost Mitt Romney?
Drive, Talk and Surf? Automakers Pushing Media Gadgets Despite Dangers

I'm here to help you with that. In my opinion, most analysts, being male, may avoid analyzing the shopping experience as much as they avoid the shopping itself. They get deep into the numbers, but perhaps in the end, they lose sight of the product, and it's the product that counts.

Barring another contender appearing sometime soon, one of these two names is going to dominate Internet shopping for everything, the way that Sears ( SHLD) dominated catalog shopping for everything a century ago. Sears brought fashionable hats and frying pans to rural Americans at the beginning of the 20th century. Whether we are on the farm or in the city, we still need those things, but we want them with one-click checkout and a reliable feedback system, too.

Amazon is often called the Wal-Mart ( WMT) of the Web, and there are downsides to that. That's why I'm betting on eBay, the underdog. Because it's not Wal-Mart. It's Harrods of London, the Grand Bazaar of Istanbul, and the Brooklyn Flea Market all in one.

Amazon started as a bookstore, and it was and is the biggest and most comprehensive bookstore ever. It built on that brilliantly, piece by piece, until it became a superstore for all media, selling even the device that plays the media and the cloud that stores it. Like Apple ( AAPL), its biggest competitor in the space, once you get sucked into this world you're never getting out.

Meanwhile, eBay began by building the online auction and collectibles market, and it's hard to see anyone ever displacing it there. But along the way, it built a worldwide community of millions of people regularly buying and selling, from established companies to spare-room entrepreneurs to old ladies cleaning out their china cabinets.

In my opinion, through a prism of the shopping experience, here are some of the ways eBay is better:

Product Range: Once you stray out of media and electronics, Amazon is stocked mostly with lower-end utilitarian products. Despite its large number of "partners," major categories like Home, Garden & Tools and Clothing, Shoes & Jewelry are, in fact, Wal-Mart quality. Its purchase of Zappos.com helped in the shoe department, but that's one niche.

Try searching for a prestigious furniture brand -- say Henredon. Amazon has four matches; eBay has 346. Or a popular style, like Mission oak. Amazon has plenty of matches, all made of cheap "oak color" veneer. eBay has signed antiques and high-quality reproductions as well as the cheap stuff.

Or, try a designer fashion name like Ralph Lauren ( RL). Amazon has mostly the mid-range department-store selections. eBay has that, plus a huge selection of the brand's high-end labels, vintage and couture, runway fashions and designer samples, "lightly used" merchandise, and last-season bargains.

To be fair, some of the better quality stuff is there on Amazon, but it's just too hard to find. That's where usability comes in.

Usability: eBay simply has superior search capability. eBay asks all the right questions -- on size, color, shape, fabric -- to pinpoint what you're looking for. Amazon does that too -- sort of -- but it's a tedious and time-consuming process. And on Amazon, the best matches are likely on an "external site," which wipes out the whole benefit of "one-click" checkout.

Product Presentation: The whole eBay community ethos demands that sellers provide exhaustive descriptions, detailed specifications, photos from every angle, personalized page design, and your questions answered on demand. Amazon encourages one photo and a description so terse you have to worry about taking a chance on anything that costs more than $19.95.

Seller Options: There's nothing wrong with a fixed price -- if you're buying a hairdryer or a jug of detergent. But eBay's other options -- like auction, buy it now, and best offer -- can be as addictive as gambling, especially on high-ticket items.

Shopper Experience: One thing that draws shoppers back to eBay time and again is the sheer wild variety of the goods. It's a browser's paradise, and it even has a category called Everything Else that seems to be designed for people who have lost their minds.

Amazon has one big edge over eBay. It's built for a quick and easy shopping experience, so shoppers can pile up a long and varied shopping list in a hurry. Amazon Prime makes it even easier.

So if Amazon is the big-box store of the Web, eBay is the whole mall -- plus Main Street and the big-city downtown -- all without the commute.

--Written by Carol Kopp of Minyanville.

More from Investing

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

Jolt: Tariffs, Trump and Ford

Jolt: Tariffs, Trump and Ford

Amazon's Big Weakness in the Supreme Court Sales Tax Ruling

Amazon's Big Weakness in the Supreme Court Sales Tax Ruling