Has eBay created a viable alternative to Fulfillment by Amazon?

Discussion
Photo: eBay
Jul 29, 2019
Tom Ryan

EBay in 2020 will launch an end-to-end fulfillment service for third-party sellers to offer speedier delivery, lower shipping costs and the feasibility of free delivery.

Similar to Amazon.com’s Fulfillment By Amazon (FBA) service, eBay’s offering, called Managed Delivery, will allow merchants to rent space in warehouses so they can store inventory closer to customers.

Third-party logistics partners managed by eBay will pack and ship any order, charging a fee for warehousing and shipping to sellers once an item is sold. The service will be available for orders placed on eBay as well as other online platforms. 

Managed Delivery is aimed at sellers with fast-moving inventory in categories like electronics and fashion, although 40 to 50 percent of goods sold on eBay are expected to qualify for the program.

The new service promises more reliable delivery and will give customers the ability to track packages. With eBay traditionally leaving delivery up to sellers, delivery times have been inconsistent. 

Sellers will also tap eBay-negotiated rates for overnight, two- and three-day shipping and use eBay-branded packaging. Some eBay merchants use Fulfillment by Amazon, but the new service will reportedly be less expensive. EBay will take responsibility for products lost or damaged in shipping. The speed target is free two-day shipping. 

“What this is not about is us trying to win a fast shipping war,” Devin Wenig, eBay’s CEO, told Reuters. “Our 182 million consumers shop on eBay because of the value and uniqueness of our inventory. We’re not the one-hour delivery guys. We’re never going to be that, but consumer expectations are changing.”

Ebay branding is also seen benefitting. According to eBay’s statement, Managed Delivery will lead to “hundreds of millions of eBay branded boxes and packages being placed on front porches” of U.S. homes over the next few years to “materially enhance eBay’s brand identity as a popular consumer shopping destination.”

Shopify, start-ups such as OrderDynamics, Flexe and ShipBob, as well as larger logistic players, including FedEx, UPS and XPO Logistics, are also looking to provide greater fulfillment and warehousing options for retailers.

DISCUSSION QUESTIONS: What do you think of the potential for eBay’s Managed Delivery service to improve the sales performance of its sellers? Do you see a strong alternative arriving for third-party sellers to compete with Amazon.com’s Fulfillment By Amazon (FBA) service?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is a step in the direction of becoming more competitive which should help eBay."
"eBay is in a position to take this battle on and not only enhance their own brand but also fill the void left by those slow logistics companies."
"The idea that eBay is streamlining the process to remove pre-viewing and testing is interesting and it’s a move in the right direction."

Join the Discussion!

11 Comments on "Has eBay created a viable alternative to Fulfillment by Amazon?"


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Neil Saunders
BrainTrust

Fulfillment is the new battleground and eBay needs to professionalize its own efforts if it is to thrive. As such, this move makes sense. It is also to be welcomed as an alternative to Amazon and demonstrates that there is competition in the world of online retail – something that many, including the Treasury Secretary, too often fail to perceive!

Jeff Sward
BrainTrust

Any competitive force in the market that puts a check on Amazon is healthy. I’m a big fan of Amazon, but I’m a huge fan of competition. The availability of choices for both businesses and customers is what keeps the market healthy.

Camille P. Schuster, PhD.
BrainTrust

This approach will facilitate delivery for some items on eBay but not all. However, this is a step in the direction of becoming more competitive which should help eBay.

Harley Feldman
BrainTrust

eBay’s Managed Delivery service is a smart idea for sellers who do not have the breadth and resources to create such a service. Amazon and other large retailers have set an expectation for delivery that eBay sellers can take advantage of. This new eBay service allows sellers to sell direct to their customers and not be forced to sell on Amazon to use FBA.

Cynthia Holcomb
BrainTrust

eBay boxes sitting on the porches of America. Smart. Giving third-party sellers the ability to warehouse inventory, track packages and deliver within one to two days. Smart. Nice job eBay!

Andrew Blatherwick
BrainTrust
This move by eBay is evidence of the change in supply chain and logistics dynamics and the number of companies circling the Amazon business. Third-party logistics businesses have been slow to react to Amazon, which at the end of the day is a supply chain and logistics business. Yes it was created by technology and the online front end, but it is the delivery capability that has enabled it to become the dominant player it is. eBay is in a position to take this battle on and not only enhance their own brand but also fill the void left by those slow logistics companies. Will eBay be able to step up and deliver their promise? Time will tell, but they have the contacts with companies selling online, they have the customer base and front end. All they are now doing is switching on the fulfillment capability to go with the rest of their business and there is no reason to believe they cannot crack that as it is not rocket science. What is interesting is… Read more »
Doug Garnett
BrainTrust

This is an interesting idea. What’s too bad is that eBay bought then already closed down some superb fulfillment operations on which it could have built this capability.

Having shopped fulfillment often, the idea is fundamentally sound. But the devil is in the details — cost, service level, error rates, client services, etc.

Bethany Allee
BrainTrust

Doug, I’m thinking the same thing. Seems a bit like deja vu. While the angle is slightly different, eBay storefronts came and went super-quick. The idea that eBay is streamlining the process to remove pre-viewing and testing is interesting and it’s a move in the right direction. I’m hung up on the liability of this new approach, but eBay is thoughtful — I’m extremely interested in seeing how it rolls out. To me it seems like eBay can reduce their risk and hand off a lot of the dirty work by partnering with a click and collect solution partner like Apex.

Mel Kleiman
BrainTrust

Great move; it will open up the playing field and get more people to shop on eBay rather than just clicking on the Amazon button.

Kenneth Leung
BrainTrust

EBay needs to compete against Amazon and find its niche. Amazon Marketplace took away some of the momentum from eBay and eBay needs to get to a new level to compete for the sellers business. Fulfillment is certainly one way to get on par with Amazon

Josh Clouser
Guest

This is a step in the right direction for eBay. One of the bigger customer complaints for the ecommerce giant is inconsistency in the fulfillment of purchased goods. By targeting this specific issue, adding reliability, and hastening fulfillment, eBay will be leveraging itself as a more inline competitor with Amazon. If eBay can offer sellers better fee rates than Amazon, this introduction may intrigue Amazon only sellers to test a new market.

wpDiscuz
Braintrust
"This is a step in the direction of becoming more competitive which should help eBay."
"eBay is in a position to take this battle on and not only enhance their own brand but also fill the void left by those slow logistics companies."
"The idea that eBay is streamlining the process to remove pre-viewing and testing is interesting and it’s a move in the right direction."

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