Taking a shot at Amazon’s leading position, eBay will launch a fulfillment program next year targeting high-volume sellers and tapping a network of partners to provide end-to-end services including shipping, tracking, warehousing and customer service.
Called eBay Managed Delivery, the service will allow sellers to locate inventory closer to buyers at warehouses across the country, providing faster delivery times and lower shipping costs. It’s the third leg of a comprehensive growth strategy that also includes Managed Catalog and Managed Payment programs, the latter built up since eBay sold off PayPal a few years ago.
eBay CEO Devin Wenig acknowledged that eBay isn’t about same-hour delivery of everyday items like Amazon, but was quick to add its shoppers like everyone else have become accustomed to faster fulfillment.
Wenig said eBay plans to keep to a three-day delivery service level with Managed Delivery, working toward two days. About 10 million items a day move through the marketplace, he said.
“We don’t want to win the vast shipping game,” Wenig said in a keynote address at eBay Open, the company’s user conference in Las Vegas. “If you need paper towels in four minutes, peace – we’re not your guys. But that doesn’t mean consumers don’t want more. Everyone wants it quicker, they want it tracked, they want in way that’s a retail standard, regardless of the item. Our winning value proposition is the inventory you provide, not shipping, but that doesn’t mean shipping’s not important.”
Shopify launched a similar fulfillment service last month for sellers on its platform, tapping 3PL partners to help them provide two-day delivery across the U.S. in response to Amazon-like customer expectations.
While distancing eBay from Amazon in terms of same-day delivery, Wenig alluded to the ecommerce giant in another key aspect of its business that Managed Delivery could improve.
“Imagine millions of eBay boxes showing up on people’s porches every day,” Wenig said, an obvious allusion to Amazon’s ubiquitous smile boxes, and an applause line to the audience of its sellers. “Our business is hidden in plain sight. People don’t realize that 15% of USPS volume is from our marketplace, but if our packages started showing up, perhaps they would. That’s good for our brand and good for your sales.”
Wenig also said eBay is pledging that orders handled through Managed Delivery will get “enhanced protection.”
“There will be no INRs (I never received) and no snags,” he said. “If we touch the item, we take responsibility for it. We’ll take care of all the operational details. It will come in a quality package with dedicated customer service.”
eBay will use its platform in conjunction with fulfillment partners, allowing users to manage inventory in its Seller Hub as well as other ecommerce platforms. The aim is to let more sellers offer free shipping – which is becoming an industry standard – and faster delivery promises to drive more sales.
Stuart Reichenbach, senior director of shipping for eBay, said there will be several different fulfillment partners helping the company execute Managed Delivery. It has piloted the program in Germany and Australia as well as in the U.S.
“We’re currently utilizing several different partners as part of our fulfillment pilot in the U.S.,” Reichenbach said. “Over the coming months, we’ll determine which strategic partners to move forward with as we scale the service.” He added an official launch date has not been set.
Like many others across retail and ecommerce, eBay continues to look up at Amazon’s dominance and pursue strategies to make up ground as it moves beyond its legacy image as an auction site. In its second quarter, eBay’s revenue was up 2% to $2.7 billion, but the gross merchandise value of goods sold on its marketplace fell 4% to $22.6 billion.