Ebay offers sellers FBA-style service
Ebay Australia on Thursday announced a new, national fulfilment service that promises to reduce the cost of warehousing, picking, packing and delivering orders for sellers on its platform.
The service, called Ebay Fulfilment Partner, is the result of a partnership with Australia Post’s Fulfilio, which has warehouses in Sydney, Melbourne, Brisbane and Perth and offers same-day delivery in metropolitan areas.
According to Ebay, sellers can save up to 30 per cent on fulfilment costs by outsourcing their warehousing, picking, packing and delivery of orders to Fulfilio.
This is presumably due to the economies of scale Ebay is able to tap into, with a network of 40,000 Australian sellers and more than 11 million Australians visiting the marketplace each month.
Ebay cited an example of sellers paying as little as $5.74 for pick, pack and delivery of 500g parcels in the same city and $6.83 for interstate service.
Ebay’s senior director of product and shipping David Ramadge noted the ability for sellers to offer faster shipping through the partnership, a key area of focus for the marketplace, since it completed the rollout of Guaranteed Delivery in May.
“We will continue to deliver sellers the lowest cost to pick, pack and fulfil their eBay orders so they can put their inventory closer to their customers and spend less time packing and more time selling,” Ramadge said.
Broadside against Amazon
Beyond this, Ebay Fulfilment Partner delivers a broadside against Amazon, which brought its own much-lauded fulfilment service, Fulfilment by Amazon (FBA), to Australia less than six months ago.
Many people in the industry see FBA as one of the keys to Amazon’s success, since the service enables Amazon to distribute products to the right warehouses in each market to ensure faster delivery for customers, and its lower freight rates create an incentive for sellers to join the marketplace.
Amazon currently has one warehouse in Australia in Melbourne, with a second in Sydney due to become operational in the second half of 2018.
The fulfilment service marks the third major initiative that appears to directly undermine some of the most compelling reasons businesses have for selling on Amazon.
The marketplace recently unveiled Ebay Plus, an Amazon Prime-style loyalty program that offers free delivery and returns to members among other benefits, and Plus Weekend, a Prime Day-style shopping event.
Ebay Australia’s chief marketing officer, Julie Nestor, previously told Internet Retailing that the arrival of Amazon was not the driving factor behind the spate of initiatives.
“Competition is a good thing, but as a market leader operating for more than 18 years in Australia, our focus is driving innovation and looking for new ways to enhance the experience of our community of online buyers and sellers,” she said.
But Ebay’s launch of the fulfilment service has also shed new light on a recent update it made to its user agreement in Australia, which restricts sellers on its platform from using third-party fulfilment providers in “situations where it could be confusing for Ebay customers – such as when an order is sent by another retailer or marketplace”.
The move effectively “banned” sellers from using FBA to fulfil Ebay orders. In other markets, businesses can use FBA to fulfil orders outside of Amazon’s own marketplace, although this is not yet available locally.