Has eBay created a viable alternative to Fulfillment by Amazon?
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.
- eBay to Launch Managed Delivery, an End-to-end Fulfillment Service for Sellers – eBay
- Managed Delivery – eBay
- EBay to Launch Shipping, Logistics Service for Big Sellers – The Wall Street Journal
- EBay will offer long-overdue Amazon shipping competitor next year – TechCrunch
- EBay plans new shipping service to challenge Amazon – Bloomberg/Los Angeles Times
- EBay to Launch Warehousing and Shipping Services Next Year – Reuters /New York Times
- Introducing Shopify Fulfillment Network – Shopify
- UPS eFulfillment Program Launches To Help Sellers Worldwide Easily Manage Multiple Marketplaces – UPS
- Will a new BOPIS option boost Amazon’s results? – RetailWire
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?