Eighteen months ago, a Sydney-based retailer selling premium kitchen appliances made a sensible decision. They listed their full catalogue on Amazon AU and eBay to expand their reach. More channels, more customers, more revenue. The logic was sound.
By the end of last year, their website revenue was down 22% year-on-year. Their marketplace revenue was up. But when they ran the numbers properly — after fees, after ad spend, after the margin they'd surrendered to win marketplace placement — total profit was lower than it had ever been.
The culprit took a while to identify. Their own marketplace listings were appearing on Google Shopping at prices $15–$25 below their website. Customers were finding them via Google, seeing both listings side by side, and clicking the cheaper one. They'd been running their own most effective competitor for eighteen months without realising it.
This is the marketplace pricing strategy problem that's quietly destroying margins for Australian e-commerce retailers right now. It doesn't show up as a clear line item in your reports. It accumulates slowly, and by the time you notice the revenue drift, the habit is already baked into your customers' behaviour.
The Marketplace Cannibalism Problem
When you sell the same product on your website and on eBay, Amazon AU, or Kogan, you create a price comparison that you cannot control. These marketplaces are indexed by Google Shopping. Every listing you publish becomes a data point in Google's price comparison engine.
If your eBay price is $20 lower than your website price — which happens routinely, for reasons we'll get to — Google will show both options to the same shopper at the same moment. Your eBay listing appears at $139. Your website appears at $159. The shopper is not thinking about your brand relationship with them. They're thinking about $20.
This plays out at scale. A retailer with 200 SKUs listed on three marketplaces has potentially 600 price points appearing on Google Shopping, all potentially undercutting their own website. And because marketplace prices change constantly — to chase the Buy Box, to respond to competitor moves, to clear inventory — the undercutting isn't even intentional. It's structural.
The damage compounds over time. Once a customer buys from your eBay listing instead of your website, they have no reason to visit your website directly next time. They go to eBay, search your product, and buy again. Your most loyal customers become marketplace customers — where your margins are 10–15 percentage points lower and you're paying a fee on every transaction.
Every customer who learns to buy your products via a marketplace is a customer you've permanently moved off your highest-margin channel. It's not just one lost sale — it's every future purchase from that customer, at a fraction of the profit.
This doesn't mean marketplaces are wrong. It means an unmanaged marketplace pricing strategy is one of the most effective ways to erode your own website's value proposition, and most retailers don't realise it's happening until the damage is significant.
Why Marketplace Fees Force the Price Down
The structural reason this happens is the fee gap between channels. Selling on your own website costs roughly 1.5–2% in payment processing. That's it. Selling on a marketplace costs dramatically more, and most retailers don't fully account for the cumulative effect when they set their marketplace prices.
Here's the actual cost structure for Australian sellers:
- eBay: 9–13% final value fee, varying by category, plus payment processing of approximately 2%. Total: 11–15% of the sale price.
- Amazon AU: 8–15% referral fee depending on category. Add FBA fulfilment costs if you're using Amazon's warehousing — typically $4–$8 per unit for small goods. Total can reach 18–22% of the sale price for FBA sellers.
- Kogan: 10–15% commission on the sale price.
- Your website: 1.5–2% payment processing. Nothing else on the transaction itself.
Now consider a product with a landed cost of $85 that you sell on your website for $150. Your gross margin is $65, or about 43%.
To list that same product on eBay at $150, you pay roughly $19.50 in fees (13% FVF). Your margin drops to $45.50, or 30%. To stay competitive on eBay — where the Buy Box pressure is constant and shoppers sort by price — most sellers end up dropping their price to somewhere around $135–$140. Now your margin is $35–$40, or 23–26%.
| Channel | Sale Price | Platform Fees | Net After Fees | Gross Margin |
|---|---|---|---|---|
| Your Website | $150.00 | $2.55 (1.7%) | $147.45 | 43% |
| eBay (same price) | $150.00 | $19.50 (13%) | $130.50 | 30% |
| eBay (competitive) | $135.00 | $17.55 (13%) | $117.45 | 23% |
| Amazon AU (FBA) | $138.00 | $27.60 (20% total) | $110.40 | 18% |
Note: Platform fees vary by category. This example uses eBay's higher-fee categories (e.g. clothing, sporting goods) for illustration. Electronics categories run lower.
The margin compression is significant. But the more damaging consequence isn't what it does to your marketplace margin — it's what it does when Google Shopping surfaces both your $135 eBay listing and your $150 website listing to the same shopper. The website doesn't just lose that sale. It starts to look overpriced as a channel.
The Google Shopping Amplification Effect
Google Shopping doesn't discriminate between your website listing and your marketplace listing. It indexes both, shows both to shoppers, and lets the price do the talking.
When your eBay listing sits at $135 and your website at $150 for the same product, Google Shopping displays them in the same comparison widget. Your website appears to be $15 more expensive than… yourself. Shoppers see this and draw a rational conclusion: the website charges a premium. Over time, this shapes behaviour — even among shoppers who landed on your website directly through a branded search or an email campaign.
The Google Ads dimension makes it worse. You may be running Shopping campaigns that drive traffic to your website product pages. Those campaigns compete in the same auction as your organic eBay listings. You're spending money to send people to a page that's already been undercut by your own cheaper listing. Your cost-per-acquisition climbs. Your ROAS drops. You attribute it to ad market conditions or increased competition, when the actual issue is your own channel pricing.
Running Google Shopping ads to your website while your eBay listing sits $15 cheaper is the equivalent of paying for a billboard that sends customers to a competitor's store. The competitor, in this case, is you — on a lower-margin channel.
For stores spending $3,000–$10,000 per month on Google Shopping ads, the wasted spend on clicks that convert on the cheaper marketplace listing instead is material. It's rarely tracked directly because the attribution doesn't connect — the customer clicks your Google ad, compares prices, then purchases via eBay in a separate session.
The Three Strategies Australian Retailers Use to Fix This
1. Channel price parity
The cleanest solution is to price identically across every channel and adjust your margin expectations per channel accordingly. Your eBay price equals your website price equals your Amazon price. No shopper can find your product cheaper anywhere else.
The trade-off is marketplace competitiveness. If you're selling at $150 and a competitor is at $135 on eBay, you won't win the Buy Box. Price parity protects your website margin at the cost of marketplace volume. For many retailers, this is the right trade — especially if marketplace revenue was primarily cannibalising website revenue rather than adding genuinely new customers.
The mechanics: set a pricing floor that equals your website price, and treat marketplace fees as a cost of customer acquisition on that channel, not as a reason to discount below your website.
2. Website-exclusive SKUs or bundles
The second approach removes the direct price comparison entirely. On marketplaces, you sell a slightly different configuration — a different bundle, a different accessory included, a different variant pack — that's not directly comparable to your website offering.
A kitchen appliance retailer might sell a standalone blender on eBay at $129, while the website sells the same blender with a recipe book and cleaning brush set for $155. Google Shopping can't directly compare them. The eBay listing is cheaper, but it's not the same product. Shoppers who want the full package come to the website.
This requires more product management overhead and some supplier flexibility, but it's the most durable solution for retailers who want genuine marketplace presence without cannibalising their website.
3. Competitive monitoring on your own category
The third strategy — and the one that underlies the other two — is using competitor price monitoring to understand exactly what your marketplace competitors are doing, so you can make deliberate decisions rather than reactive ones. This is where a tool like PriceSpy applies directly to the marketplace problem.
If you know that your three main eBay competitors in a category have all dropped to $128 on a product where your floor is $135, you can make a deliberate choice: hold the price, accept lower eBay volume, and protect your website margin. Or adjust the bundle on eBay to add value without dropping price. What you don't do is blindly drop to $128 because you haven't noticed the shift until your eBay sales stalled.
Monitoring also surfaces opportunities. When a marketplace competitor goes out of stock, their listing disappears from Google Shopping. If you're at $135 and the next cheapest is $159, you might have headroom to move to $145 and increase margin — a decision you can only make if you're watching.
See Exactly Where Your Prices Stand Against Marketplace Competitors
PriceSpy monitors eBay, Amazon AU, Kogan and direct competitors — so you always know when a price war is starting.
When Marketplaces Are Worth It (And When They're Not)
Marketplaces aren't inherently the wrong channel. They're the wrong channel when used without a clear-eyed view of what they cost relative to what they return.
Marketplaces make commercial sense in three situations. First, for clearing slow-moving or overstocked inventory where the priority is recovery over margin. Second, for products in categories with low marketplace competition, where you can list at or near your website price without losing placement. Third, for brand discovery — reaching customers in a new category who would never have found your website, then converting them to direct customers over time.
They don't make sense as a primary sales channel if your margins are under 30% and you're competing in a category with aggressive marketplace pricing. At those margins, the fee structure doesn't leave enough room to price competitively and remain profitable, and the price visibility problem actively works against your website.
To audit your own situation, pull the last three months of marketplace versus website sales data and calculate true margin per channel — sale price minus landed cost minus all fees, including ad spend and fulfilment. Most retailers who do this calculation properly find that marketplace margin is 8–15 percentage points below website margin on the same product. The question then is whether the incremental volume justifies that margin gap, or whether that volume is primarily cannibalised from the website.
Don't ask "how much revenue did we make on marketplaces?" Ask "how much of that revenue would have come through the website at full margin if the marketplace listing didn't exist?" The second number is what determines whether the channel is actually adding value.
If you haven't run this audit in the last six months, that's the most useful thing you can do this week. The answer often surprises retailers who assumed marketplaces were pure additive revenue.
Using Competitor Price Monitoring to Protect Your Position
Once you understand which marketplace competitors are setting the pricing ceiling in your category, you can use continuous monitoring to stay ahead of their moves instead of reacting after the damage is done.
The practical workflow looks like this. You identify the five to eight marketplace sellers who consistently influence pricing in your key categories. PriceSpy monitors their eBay, Amazon AU, and Kogan listings at the product level — not just brand-level, but variant-level: the exact size, colour, and SKU that matches yours. When any of those competitors drop their price below a threshold you've set, you're alerted immediately.
That alert gives you a decision window. If a competitor has dropped to $118 on a product where your floor is $125, you know they're likely trying to clear stock or responding to their own competitor pressure. You can choose to hold your price, knowing their move is probably temporary. Or you can activate a short-term response rule that takes you to $122 for 48 hours, then returns automatically to your standard price.
The key distinction is that this is informed repricing, not automated race-to-the-bottom repricing. Setting price floors in a tool like PriceSpy means the system will never drop below the point where your margin becomes unacceptable — regardless of what competitors do. You're competing intelligently within boundaries you've chosen, not chasing every move in the market.
Stock monitoring adds another layer. When a marketplace competitor goes out of stock on a shared product, their listing either disappears from Google Shopping or gets deprioritised. That's a window — sometimes 48 hours, sometimes two weeks — where you're effectively the market. Without monitoring, you won't know that window exists until it's already closed. With it, you can adjust pricing in real time to capture margin while demand is unsatisfied elsewhere.
For Australian retailers running PriceSpy across their marketplace category, a common early finding is this: within the first 30 days, the monitoring reveals two or three competitors they weren't watching who are consistently pricing below them on marketplace. That visibility alone prompts a channel strategy review that most stores had been putting off for months.
The Marketplace Pricing Problem Is Fixable
The marketplace cannibalism problem is fixable — but only once you can see it clearly. If you don't know that your eBay listing is appearing $20 below your website on Google Shopping, you can't address it. If you don't know which marketplace competitors are moving prices in your category, you can't respond strategically rather than reactively.
Monitoring your competitor prices across every channel — including on the marketplaces where you sell — is the first step. Everything else follows from that visibility: the channel strategy decisions, the pricing rules, the floor-setting, the margin protection.
View the PriceSpy demo to see how marketplace competitor monitoring works across a real product catalogue, or get in touch and we'll walk through how it applies to your specific category.