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Logistics & Fulfilment

Ebay restricts sellers access to third-party fulfilment

In a move that signals a step-up in competition among Australia’s largest online marketplaces, Ebay has restricted sellers on its platform from delivering goods fulfilled by third parties.

The restriction only applies to the Australian market and prevents sellers from using services such as fulfilment by Amazon (FBA) to send out goods sold on Ebay’s platform.

Implemented quietly in a change to its seller policies last month, the decision is a defensive move from Ebay amid the roll-out of Amazon’s suite of services in Australia.

In other markets FBA enables partners to ship products to shoppers outside of Amazon’s own marketplace, although this is yet to be made available locally.

An Ebay spokesperson said on Monday that the policy was revised to “limit confusion” among customers.

“Our fulfilment policy was revised earlier this year to limit confusion among Australian buyers as to whom they purchased their items from, where their data has gone and who to contact should they require customer service or seek to make a return,” the spokesperson said.

Sellers who don’t comply with the new rules will be punished by having their visibility lowered on Ebay’s platform.

“The policy does not ban the use of third party fulfilment on ebay.com.au but restricts the use of third party fulfilment undertaken by retailers/marketplace operators for purchases made on ebay.com.au only,” the spokesperson said.

Retailers caught in the middle

Amazon announced the launch of FBA in Australia earlier this year, a program that is thought to be a precursor to its famed Prime loyalty program, slated to launch here later this year.

Ebay expressed confidence in its ability to compete against Amazon prior to its entry into Australia in December last year, but its latest move suggests it is keeping a close eye on the American giant’s progressive expansion.

Last month it inked a deal with Wesfarmers to expand its Flybuys loyalty program to merchants on its platform and just last week completed the roll-out of a guaranteed delivery program that is expected to speed up shipping times.

Costumes.com.au founder Nathan Huppatz, who sells on both Ebay and Amazon, said the restrictions will also prevent sellers from shipping items in branded boxes from other retailers.

“This could be seen a defensive move in the local market,” he said.

Australia’s online marketplaces have benefitted from strong growth in e-commerce over the last decade.

$21.3 billion was spent online last year, growing 18.7 per cent, according to Australia Post.

Marketplaces, however, grew by 74.8 per cent on average as Amazon’s launch delivered a halo effect to its competitors.

But with Amazon now in the market and Catch Group firming up its presence, it appears market share is becoming increasingly important for incumbents.

There is concern that retail sellers could be caught in the middle though, particularly if punishments for non-compliance involve impact visibility on the platform.

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