Tesco quietly launches online marketplace

Tesco is now officially a competitor to Amazon and eBay having opened up Tesco Direct to third party retailers. So far on Tesco I’ve spotted products from both Maplin and from online gardening retailer Crocus. You’ll also notice that every product on Tesco Direct now carries the message “Buy from Tesco”, which is exchanged for “Buy from Maplin” or “Buy from Crocus” on products from 3rd party suppliers. This changes to “Supplied by….” as soon as you get to the shopping basket to check out.

As a bonus to customers they can earn club card points for purchases from any seller on the Tesco marketplace. It does of course mean that Tesco will be sharing their customers details with third party suppliers and they’ve updated their privacy policy to include “If you buy a product or service from a Seller at Tesco we will only share relevant personal information with the seller for the purpose of processing your order“.

So far I have yet to see a product offered by Tesco and a third party, so I don’t know whether they ban competing products or only display them from a third party if Tesco themselves are out of stock. This also means we currently have no insight into their pricing policy, although the products I have seen are offered on the retailers own sites at the same price point as on Tesco Direct. However if you collect Tesco Club Card Points you are better off purchasing on Tesco as third party products still earn you points, but other than that price parity with a retailers own website appears to be in place.

Tesco have been very quiet about the launch of their marketplace, although they’ve had plenty of stories over the last couple of years saying it was going to happen. However just a few weeks ago, at the Internet Retailing Expo in Birmingham, Dan spoke to them and they had nothing to say about the pending launch of their marketplace.

It looks very unlikely that Tesco will open up their website as a proper marketplace open for large numbers of sellers to list on, which is a shame. From the current third party sellers it looks like they’re going for large non-competing high street retailers. There is currently no information available as to the criteria for selling on Tesco Direct or what the fees are so we can only assume that it’s currently an invitation only marketplace.

Tesco are due to announce their full year results this week so it’s likely that they will include an announcement of their new marketplace, but don’t forget you heard about it first here on Tamebay and we’ll keep you updated as and when we hear more.

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Will this mean Tesco withdraws from Ebay?

Mark T • 15th April 2012 •

I doubt they'll withdraw from eBay, three quarters of what they sell on eBay is their refurbished returns and they'd just need to find another avenue to dispose of them. No reason for them not to carry on using eBay for distressed goods.

Chris Dawson • 15th April 2012 •

hm if tesco ban competing products (and its not confirmed yet) they will end up with everything because you can bet anything you want if someone sells thousands of one item and tesco don't sell it they will have the technology to see what it is and guess what they will sell it next and then ban the other seller from selling it.

hawkwind • 15th April 2012 •

I thought of that too.

Gerry007 • 16th April 2012 •

Tesco are setting out to do just what Amazon do: See what the third-party best-selling products are, find a supplier and price the third-party seller out of the marketplace. No "banning" of products or sellers, just strategic out-manoevering. It's genuis really: Why pay a whole team of people to research potential products when you can allow third-party sellers to PAY to sell their items and meanwhile give one of the biggest retailers the key into what sells and what doesn't.

Bunchy • 16th April 2012 •

Also must add because of the way ebay have treated sellers over the years if Tesco were to become a rival then i can see them pulling thousands of sellers from ebay. But this is all speculation for now untill it opens up for everyone and what are the fees etc etc

hawkwind • 15th April 2012 •

or tesco may treat sellers worse as the ebay method obviously works

st georges dragon • 16th April 2012 •

Ebay sucked up to the outlets, deserted there main user base. Now over the next few years watch what happens. Ebay will be squeezed and competition from the supermarkets will cause them the most damage. They have branding and a massive customer base. They have a taste of the cake now they want more.

jim • 16th April 2012 •

exactly! tesco have the branding but their no angels

st georges dragon • 16th April 2012 •

If Tesco are to open up their marketplace and draw in sellers from ebay (and even Amazon?) they will need a subsection on their website with systems designed for the ebay (and Amazon?) seller. At the moment it looks like invite only to a marketplace with systems and processes not suitable for ad hoc sales. Will the lack of a feedback arrangement put potential buyers off? Probably not because of the Tesco branding. Tesco are going to make sure that their brand is not harmed by rogue sellers and for this reason I am struggling with the idea of Tesco opening up their marketplace to all. But I would like them to. One thing is for sure. Amazon and eBay will be watching closely. I do like the Clubcard points idea for all sales.

Gary • 16th April 2012 •

you could always sell your gold to tesco at well below the going trade rate and get a few clubcard points lol

st georges dragon • 16th April 2012 •

How do we work out your delivery costs? Delivery costs are based on the type of delivery you choose, your address, and the seller you're buying from. Seller charges vary by seller. Tesco delivery costs are listed below: Delivery type Books All other products Standard delivery £1.75 £3.00 Express delivery £2.75 £5.00 Pick your delivery day - £5.00 - 19.00 We will call you - £5.00 - 19.00 Click & collect - Free Some postcodes may incur a surcharge. We will show you the total delivery charge during checkout. For items sold by Tesco you only pay for delivery once, but if you choose to have your order split or delivered to more than one address, you'll be charged for each delivery.

Al Gerrie • 16th April 2012 •

Thinking about all the comments about the Channel Islands and of course the Highlands and Islands of Scotland I find myself wondering what Tesco would charge for delivery. After all there are a lot of customers who currently either cannot get deliveries at all or having to pay a substantial surcharge.

Chris • 16th April 2012 •

Some greater flexibility required around postage - maplin postage was £2.99 - Tesco advertised a fixed cost of £3 So it looks like Maplin not bound by Tescos pricing policy for delivery but not clear on the listing.

Al Gerrie • 16th April 2012 •

I'm not sure how exciting this really is unless Tesco open the gates and let it become a secondary marketplace like eBay or a little like Amazon. With the clout they have in retail, that would be almost as interesting as if Google created a marketplace of their own. I don't think they are interested in doing this, after all, their main priority is to offload stock that cannot be sold through their retail stores and recover as much margin as possible. I can't think they are interested in running & maintaining an open marketplace, but they are every bit interested in increasing recovery rates on stock that cannot be sold through primary markets.

Anthony Trollope • 17th April 2012 •

I would think this would depend on HOW they open it up to SELLERS. Ebay get involved in more than they need too and interfere in more than they need too. If the money is good enough then they will get involved.

jim • 18th April 2012 •

Hmmm, I think Tesco is very intrested, Tesco have there finger in many pies, They offer a mobile phone service, they offer car insurance, loans which are now underwritten by tesco themselfs and not RBS. As much as many people slag Tesco off and complain about the amount of stores they have, you have to say one thing for Tesco, They are very good at what they do. Its very rare Tesco make a mistake. I think they are testing at the moment and see how it goes, after all they are new to this and once they have got rid of any issues bugs etc and worked out exactly what they are doing they will open the site up to more retailers. I will be keeping an eye on Tesco thats for sure

Terry • 20th April 2012 •

Hey Chris - I've just written a blog post with my own thoughts on this topic. Would love to get your readers feedback / comments. https://www.brightpearl.com/blog/2012/04/17/new-tesco-marketplace-set-to-challenge-amazon-0 James.

James Scott • 18th April 2012 •

Your blog is interesting, but does Tesco really want to create a "reverse flow" that would enable items to be dropped off by sellers at one store, taken back to a distribution centre, and forwarded on to a different store? It would be a desparately inefficient thing for Tesco to do, completely messing up the timed delivery slot nature of their existing very organised delivery model.

JohnC • 21st April 2012 •

The supermarket distribution systems are designed to work with large quantities of identical products. If a store needs another pallet of baked beans the local distribution centre sends out the next available pallet. They do not try to send out a specific pallet. For Tesco to act as a courier service they would need to organise their distribution centres differently in order to get a specific package delivered to the relevant store. If sending something across the country (stores supplied by different depots) they would need to reorganise their internal network to offer regular connections between depots. It would be entirely possible for them to do this, however it may end up being less efficient than using an established courier firm. ---- Are (non food) orders placed on the Tesco website delivered by Tesco delivery drivers?

Mark • 22nd April 2012 •

Thinking about Tesco and its distribution system. The Tesco Lorry goes from the Distribution Centre to a particular Store. Usually the whole truck load is for that one store(only the smaller stores may get a part load). Then the truck goes back to the Distribution Centre empty. The truck is not directed to drop off at X Store and then drive 10 miles down the road to Joe Bloggs and Sons and pick up a load of Baked Beans or whatever. The Suppliers trucks deliver their product to the Distribution Centre. I can just see the Warehouse loving it if trucks were dropping in pallets of boxes and jiffy bags etc that all had to be sorted and redistributed to the various stores. My guess is that very early in the consideration such an option has been discounted(probably within 60 seconds of it being raised).

Chris • 22nd April 2012 •

All of Tesco's larger stores could have subcontracted 'collect+' type depots in each store [bit like they sublet to opticians, etc]

Gerry007 • 22nd April 2012 •

They could, but there's no money in it. To add in a store rental cost to a carrier cost plus somebody to staff it makes it way too expensive.

JohnC • 23rd April 2012 •

Surely it depends on the likely volume. Certainly if the volumes were low then the costs are likely to make it non viable. But would it be possible to achieve the level of volumes that would be required to make it viable. Also would it be viable in some stores but not in others? To enable such a system to work it must be general across the whole Tesco Empire(or at least all of the larger stores)

Chris • 23rd April 2012 •

Well yes, it does depend on volume, but I can't see it ever working. One person on minimum wage plus whatever Tesco wants for the floorspace is still adding quite a lot per package unless the volume is massive. And if the buyers don't collect for ages, there is going to be an unsightly area full of random parcels, surely not adding much to the store ambience?

JohnC • 23rd April 2012 •

Nice one Tesco. Can you beat Amazon ? Here's sellers list on Tesco https://www.tesco.com/direct/sellers/seller-directory.page

Prabhat Shah • 26th April 2012 •