Analyst calls for eBay fulfillment service

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RBC Capital analyst Stephen Ju has called for eBay to launch a fulfillment program similar to Amazon FBA saying that it would benefit both buyers and sellers alike. It’s not a new idea and eBay surveyed sellers about a fulfillment service as far back as January 2009.

It’s still an interesting proposition, but unlike Amazon, eBay are not a retailer and would undoubtedly contract out to a third party to run the fulfillment service.

Amazon started life as a retailer and built an infrastructure and only then invited third party sellers to sell on their site. Fulfillment by Amazon came later as an additional service and gives buyers the added benefit of combined shipping and shipping discounts and items from multiple sellers (including Amazon themselves) could be despatched in a single parcel.

eBay are not themselves suppliers and for buyers to benefit the vast majority of sellers would have to sign up to an eBay fulfillment service. I just don’t see that happening. Whilst many sellers do supply new boxed goods with UPC or EAN bar codes there are many more who sell used or unbranded goods, OEM parts which are new but don’t have retail packaging and bulky or fragile items requiring specialist packaging. These products are simply not suitable for a fulfillment service.

Amazon’s entire business is based around uniform goods with a barcoded catalogue whereas on eBay sellers list a much greater range of goods many of which are unique one off items. Many sellers who would benefit from a fulfillment service already use Amazon and it’s unlikely that eBay would convince them to switch to an eBay fulfillment service.

What do you think? Would your goods be suitable for a fulfillment service (whether with Amazon, eBay or another third party such as the Royal Mail)? Would you trust a third party to ship your goods or would you rather invest in warehousing and staff to pick, pack and despatch your orders?

15 Responses

  1. I am yet to be convinced on fulfilment as I am with dropshipping. We tried dropshipping once, never again it was a nightmare not getting quick enough responses to where customers items are.

    If everything is in house you can monitor it better and answer customers within minutes rather than hours.

    It would be a massive mistake for ebay to do this, then need to concentrate on making it easier for good sellers to sell rather than jumping through hoops first!

  2. surely, this must be april fools day joke? ebay fullfillment..last time i spoke to ebay on the phone I had to give him little hints and i’m sick and tired of there incompetence.If i could give ebay stars it would only be all ones except for exposure four stars. AMAZON five stars there customer service is outstanding – I would trust amazon with my goods but never ever ever ebay. Ebay is run by clowns i think…

  3. Amazon currently will remove upon request any feedback if “The entire feedback comment is regarding fulfilment or customer service for an order fulfilled by Amazon.”

    I would imagine ebay would not be so helpful in this instance (why break presidence?)

  4. These fulfilment services really just scratch the surface:- they are only viable with new, boxed, coded high-value deep (ie many identical multiple items) stock units.

    The opportunity which we see at Stuff U Sell is in handling the onesies and twosies of unique stock items (new or used), which is a problem with no other solution for stock holders.

  5. I have a hunch that fulfillment will become more relevant with eBay over time based on the direction they are headed. I suspect that it would be a disaster though if eBay were to implement it (especially in the near future). Better to wait for a third party provider to gain popularity and then buy them out (like BillPoint and PayPal).

  6. Having been on the blunt end of fulfilment going wrong, and knowing eBay’s reputation for “foul ups” I wouldn’t touch it with the longest barge pole I could find.

    PLUS who is RBC to “call for” eBay to do something ? “Call for” sounds a bit like giving orders to me.

  7. Whilst I can see the advantage of fulfilment over hiring staff at busy times – hopefully, no worries about theft, staff training, holiday / sick / maternity pay – I just don’t like the idea of having so little control over my business.

    If eBay screw up – it is me that will be blamed by the customer, will eBay remove the negative feedback and low DSR scores?!

    A lot of my stock is second hand / non bar coded – will eBay be able to cope with these items or will I find myself charged even more to subsidise the high street TRS who are given even more of a discount to use this service

  8. I looked at fullfillment for my new products.
    But I have not got a good enough sales base yet.
    There is also the extra added cost of getting your goods to the fullfilment service and then their charges.
    So you are sort of paying twice fro delivery.

    Postage is killing online auction sales as it is now (imho)

    And like others have said ebay would be the last company I would trust to do fullfillment.

  9. Incompetence rules the day at eBay so what makes some Wall Street analyst believe that eBay’s acquisition of warehouse facilities will improve eBay’s bottom line?

    Analysts are supposed to understand the company’s they analyze, not make foolish recommendations on how the company should run its business.
    eBay’s business model never involved having possession of inventory. Its business model never involved the cost of personnel to receive inventory, manage inventory or pack and ship orders.

    Adding fulfillment to eBay would drive up costs for sellers.

    And who in their right mind would trust eBay to secure their merchandise and protect it from loss?

    eBay can barely manage to keep their servers up and running and some analyst looking for something to fill a blog post suggests building a fulfillment program?

    It is no wonder the stock markets are in such bad shape. With naboobs like this telling companies how they should change their business model, it is no wonder investors lose their shirts while analysts get paid to write another column.

    eBay was growing at incredible rates when it’s focus was on pleasing Main Street. After all, Main Street is where eBay’s customers once were.

    Unfortunately, once eBay management began listening to Wall Street analysts, the marketplace began its prolonged decline.

    eBay needs to stop focusing on Wall Street and get back to focusing on Main Street and what buyers and sellers want.

    Pleasing analysts is why eBay finds itself in the deep hole they are in. Analysts dug the hole, and eBay jumped right into it.

    Things have not been right since.

  10. Most of the sellers who are big enuf to use this service wouldnt as they already have warehouses and staff and all the other things in place.

    Amazon rang us a few weeks ago and asked us to give them a trail, not a chance and they were going to charge us more for shipping then we pay now, it seems we have a better deal with RM than they do (or as I suspect they have a better deal than us and r lookin 2 make some big profits)

    Also dont like the idea of not been in control, its a bit like BT call centres now overseas, BT cant control it any more and as a result customer service has been flushed down the pan, result customers switch to UK companies who r based in the UK only – Example Sky.

    On the other hand if u r just starting up and have no staff or warehouse then maybe this might be a option

  11. Oh, and just to add ebay and fulfillment – two words they dont go 2gether – ebay would struggle fulfillment of any type, how about “for filling” its customers with good service 4 starts “the sellers”

    If they did this is would be as bad as ebay express – FLOP

  12. I will trial a few products with Amazon fulfillment In August/September on items with a good track record. Visibility is improved hugely and customers have more trust with Amazon direct than with marketplace.

    I doubt I would give ebay fulfillment products. I would not trust there systems to work, and I don’t think customers would either.

    But perhaps, just perhaps, if it had settled in, the rates were low, if there was enhanced vis and I had large quantities of a cheap product I might just consider it.


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