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Amazon vs. Alibaba Comparison in 2024

The main difference between Alibaba and Amazon is the audience
Table of Contents
The behavior regarding consumption and leisure has completely changed after COVID-19, generating new dynamics of digital purchases from the beginning that, without a doubt, are here to stay. Thus, Marketplace platforms have become an excellent tool for companies to gain visibility from anywhere in the world. Alibaba and Amazon are currently two of the main digital titans of retail, which represent a high percentage of global e-commerce. Given the unprecedented growth they have experienced, today's companies and sellers need to understand the differences between Alibaba vs. Amazon.
Currently, these platforms have the greatest advantages for buying and selling online. They are online stores that connect various suppliers of practically anything with countless online buyers. But, due to the boom that both platforms have, it is worth pointing out the pros and cons of each one and the differences between them.

Differences Between Alibaba & Amazon

The main difference between Alibaba and Amazon is the audience – while Amazon serves consumers, Alibaba serves businesses. Amazon does have a B2B marketplace called Amazon Business, but it’s mostly known for its consumer offerings. 

Amazon vs. Alibaba infographics

With over 80% of China’s online shopping market, Alibaba is one of the biggest eCommerce companies in this country. It has several shopping sites for different markets of customers, including Alibaba.com, AliExpress, and Taobao. On the other hand, Amazon is another eCommerce giant that serves customers around the globe. This company currently makes up 40% of the eCommerce market in the US. 

But other than the audience and market share, what are the differences between Alibaba vs. Amazon? Let’s find out below:

1) User Base

As a platform known worldwide for many years, Amazon hosts more than 310 million active customer accounts which continues to increase daily. However, due to the great boom that Alibaba has taken around the world, there are already more than 443 million active buyers on said platform. This is mainly because China still has the largest user base globally.

2) Sales and Net Profit

Amazon multiplies e-commerce sales by almost 4 times and also has extra income from cloud services

Amazon multiplies e-commerce sales by almost 4 times and also has extra income from cloud services and subscriptions that is much higher than that of Alibaba. However, during the last half of 2019, Amazon made a profit of $2.6 billion, less than the $2.8 billion that Alibaba managed to acquire on net profit. 

So, although the number of sales by Amazon exceeded $63.4 billion and Alibaba only $16.7 billion, the latter was able to obtain an operating result of $3.6 billion against Amazon’s $3.1 billion.

3) Variety of Products

Regarding the catalog that these two platforms manage, Amazon has the lead compared to Alibaba. It is a much more varied service and, therefore, it has been classified as “the everything store”. This means that users will be able to find an endless number of products that are not even available on the Asian platform.

Similarities Between Alibaba and Amazon

Although there are many differences between Alibaba vs. Amazon, the two marketplaces have quite a bit in common. While their market shares may be different (39% of all US eCommerce sales for Amazon and 58.2% of all retail eCommerce shares in China for Alibaba), they both dominate their country of origin. 

In addition, both marketplaces have proprietary payment systems – there is Amazon Pay which allows users to purchase items on other websites using their Amazon accounts. Alibaba has created the same system through Alipay, with more than 700 million annual active users employing it.

Pros & Cons of Selling on Amazon

It is important to know the pros and cons of selling on Amazon so that you can make the right decision that best suits your needs. 

It is important to know the pros and cons of selling on Amazon so that you can make the right decision that best suits your needs. 

Advantages of Selling on Amazon

  • If you do not have a website and want to start an online business, it is an excellent alternative, since you will have coordinated inventory management and you do not need knowledge of web development or maintenance.
  • You get more sales than if you start on a new website as long as you meet all the requirements and have a niche product because Amazon’s positioning is strong.
  • If you already have experience in online sales, you can try Amazon FBA. This allows you to send your inventory to an Amazon distribution center and not worry about the logistics in terms of shipments, deliveries, customer service, and returns management.
  • Accounts have access to payment gateways, which is difficult to access for a small business. there is also the opportunity for alibaba to amazon fba, which means a collaboration with Alibaba suppliers to sell their products on Amazon.

Disadvantages of Selling on Amazon

  • The customers are Amazon’s, not yours, which limits the applicable strategies.
  • Amazon has 2.4 million active sellers not only in the US but also in other countries. This makes it a highly competitive space for sellers. 
  • Amazon has high commissions that can go from 8% to 15% per item, therefore you must offer a product with a high margin.

Pros & Cons of Selling on Alibaba

When comparing Alibaba vs. Amazon, it’s important to know both companies’ pros and cons to make an informed decision. Selling on Alibaba vs. Amazon has its own advantages and challenges, including: 

Advantages of Selling on Alibaba 

  • High traffic (more than 20 million active users)
  • Marketing tools to increase sales (SEO improvement, branding customization on your storefront, PPC)
  • Especially effective for larger stores (Alibaba gives more exposure to stores with more products)
  • Tools that facilitate the process of uploading products (you can upload products in bulk and Alibaba’s “Intelligent Posting” system will suggest ways you can optimize listings to perform better according to Alibaba’s algorithm and buyers’ searches )

Disadvantages of Selling on Alibaba

  • As in all marketplaces, it is not possible to send the data to another eCommerce platform, so you will have to enter the data manually.
  • There are more than 150,000 verified sellers on Alibaba, which makes it highly competitive for new sellers.
  • Translations can be improved.
  • To sell on Alibaba, you will have to choose between one of their subscription plans. These subscription plans cost around $2,000 to $4,000 per year.

Selling Fees on Amazon & Alibaba

The next key aspect of comparing Alibaba vs. Amazon is their selling fees. Regardless of the marketplace you choose, there are some fees and commissions you must consider. For example, Alibaba offers two types of plans for sellers: The basic plan ($2399/year) and the Premium plan ($4199/year). These plans come with various features such as posting products, receiving and responding to queries, data reporting, etc. 

Amazon also offers two types of seller plans: the Individual plan ($0.99 per item sold) which limits sellers to a maximum of 40 units a month, and the Professional plan ($39.99 per month) which does not have any limitations. However, on top of these amazon selling fees, there are additional costs and commissions you must pay as a seller. Some of these fees include closing fees (avg. $1.80), referral fees (6% to 96%), shipping fees ($3.99 to $46.50 per order), and storage fees ($0.69 to $3.40 per cubic foot per month). You can get a better estimation of your costs if you visit the Amazon website. 

Shipping & Fulfillment on Amazon and Alibaba

As an international seller, you will be responsible for fulfillment when selling on Alibaba. This company does not offer fulfillment services – at least not to international sellers – so you must choose a shipment method and a carrier. Shipment options include ocean freight and air freight, and the top recommended global shipping carriers are UPS, DHL, GLS, DPD, etc. 

Amazon, on the other hand, offers two types of fulfillment methods: FBM (Fulfillment by Merchant) and FBA (Fulfillment by Amazon). As the name suggests, if you choose FBM, you must fulfill orders yourself and take care of logistics and customer service. However, if you choose FBA, Amazon will take care of logistics on your behalf. All you have to do is send your inventory to an Amazon fulfillment center and let Amazon take care of picking, packing, shipping, customer service and returns management. To make the process smooth and make more profits, learn how to ship to amazon fba.

Listing Products on Amazon vs. Alibaba

Listing products on Alibaba vs. Amazon are pretty similar. You have to create a seller account first. On Amazon, if your product is already listed, you can add it to the existing listing. You can do this by searching for the product name or ID. However, if the product is not already listed on the platform, you must create a new listing using attractive descriptions and relevant keywords.

The process is pretty much the same for Alibaba, but here, the number of products you list plays a vital role in your success as a seller. The more products you have, the more likely you are to show up in product search results, which can lead to more exposure and a higher chance of securing partners. 

Final Thoughts

Now that you know the differences between selling on Alibaba vs. Amazon, you can make a more informed decision about which one suits your business more. One tip we can give you is to focus on the platform where you’re more likely to reach your target audience, whether it’s individual customers or other businesses. You must also consider fulfillment methods and the costs of selling on both marketplaces. By doing this, you can start a profitable – and potentially international – online business.

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