Amazon vs Alibaba: Comparison of sales platforms

Amazon and Alibaba are both online sales platforms, but they differ in their business models. While Amazon focuses on B2C (Business to Consumer) retail sales and manages logistics and customer service in many of its transactions, Alibaba operates as a B2B (Business to Business) wholesale platform that does not get involved in the management of products sold on its platform.

In this article by Jordi Ordóñez, we analyze both sales platforms and make a comparison between Amazon and Alibaba, so you can choose the one that best suits your preferences and needs.

How do Amazon and Alibaba work

Amazon and Alibaba have different business models that determine how they sell products and operate globally.

Amazon, founded by Jeff Bezos, is primarily a B2C (Business to Consumer) platform, meaning it facilitates direct sales of products from sellers to consumers. Amazon manages inventory, logistics, and customer service in many of its transactions. Sellers can sell products on the platform, but Amazon has much greater control over payment processing, distribution, and, in many cases, pricing. Amazon charges commissions on sales and offers a fulfillment program (FBA – Fulfillment by Amazon), which makes it easier for sellers to manage shipping and returns.

For example, a product like the Lectómetro Escolar para niños y niñas de 5 a 7 años is sold directly to consumers through Amazon, demonstrating the typical B2C model that Amazon follows.

On the other hand, Alibaba primarily operates as a B2B (Business to Business) platform, although its subsidiary AliExpress offers B2C sales. Alibaba connects wholesale businesses with buyers worldwide, providing a platform where suppliers can offer their products to international buyers. Unlike Amazon, Alibaba doesn’t get involved directly in managing the products sold on its platform, allowing sellers to control their own inventory, pricing, and shipping. This makes Alibaba ideal for wholesale purchases and for businesses looking to establish long-term business relationships.

You might be interested in this ebook: Guide to Selling on Amazon.

Who sells more, Alibaba or Amazon

In terms of sales volume, Amazon remains the global leader. In 2023, Amazon is estimated to have generated over $500 billion in revenue, while Alibaba, through its ecosystem of platforms, reached figures close to $130 billion. However, when it comes to the number of transactions and the reach of their platforms, Alibaba has a greater volume of products sold in the wholesale market, with a stronger focus on Asian and emerging markets.

Amazon benefits from its larger customer base in the United States and Europe, while Alibaba dominates Asian markets, especially China, and is beginning to expand into international markets.

In summary, Amazon has higher sales volume due to its ability to sell products directly to end consumers, but Alibaba has the edge in wholesale sales and B2B connections.

Revenue and profitability: Amazon vs Alibaba

When analyzing revenue and profitability, both giants have very different structures. As mentioned earlier, Amazon has significantly higher revenues due to its B2C model, which is based on selling products directly to consumers. Additionally, its subscription service Prime and its cloud services business (Amazon Web Services, AWS) provide substantial profit margins.

In contrast, Alibaba operates with narrower margins due to its B2B model and lack of control over logistics. However, the platform benefits from operating with a lower-cost business model, which allows it to offer more competitive prices to sellers. In terms of profitability and growth, Amazon remains more profitable due to its diversified operations, but Alibaba is well-positioned to continue growing in e-commerce and expanding beyond Asia.

Costs and fees: Amazon vs Alibaba comparison

When analyzing the costs and fees associated with selling on each platform, we see that Amazon tends to be more expensive for sellers due to its commissions, storage fees, and the use of its FBA logistics service. Amazon’s commissions vary depending on the product category but can range from 6% to 45% per sale, depending on the item. In addition, sellers must pay extra fees if they use the FBA service, which can significantly increase operational costs.

On the other hand, Alibaba charges much lower fees, as it doesn’t get directly involved in product management. Alibaba charges membership fees, and in some cases, transaction commissions. This makes it a more affordable platform for sellers who want to manage their own logistics or make wholesale sales.

If you are an entrepreneur or small business and want to keep operational costs low while selling online, Alibaba may be a more attractive option. However, if you're willing to invest in logistics services and the advanced tools Amazon offers, Amazon can be highly profitable in the long run, especially if you're looking to attract a global audience.

Which is better, Amazon or Alibaba

The answer to this question largely depends on your business goals. If you're looking for access to a massive customer base in markets like the United States and Europe, and you're willing to pay higher operational costs and commissions, Amazon is the better choice. It offers a mature platform with advanced tools for sellers and very efficient logistics.

On the other hand, if your goal is to sell wholesale or connect with international suppliers in Asia, Alibaba is a platform with impressive reach that allows you to sell and buy products at competitive prices. If your business focuses on high volumes or industrial products, Alibaba might be the more convenient option.

The best platform for your business will depend on your needs. If your goal is to sell directly to consumers with a strong global presence, Amazon offers a more robust structure and a well-established system. However, if you’re looking to sell wholesale or explore international markets with lower fees, Alibaba can be an excellent option.

For more information on innovative online platforms, check out Quenarras, which offers insights and resources for businesses and entrepreneurs.

If you need guidance on how to optimize your presence on these platforms or how to improve your online sales strategy, contact Jordi Ordóñez, we help you maximize your results with a strategic approach to marketing and digital commerce. With our e-commerce consulting and marketplace optimization services, we help you make informed decisions and make the most of your presence on platforms like Amazon or Alibaba.

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