One of the reveals at eBay Open that hasn’t received the mainstream coverage is eBay’s announcement that eBay is USPS’s 2nd largest customer. Tamebay reader unsuckEBAY reports that CEO Devin Wenig announced to the audience that eBay is the second-largest customer of the US Postal Service, and that about 15% of every USPS shipped package is an eBay item. eBay represents $1.5 billion in USPS postage.
Although Amazon receives significant (mostly negative) press coverage over their relationship and rate agreement with the USPS, not helped by President Trump wading in calling the USPS Amazon’s ‘Delivery Boy’ and suggesting they don’t pay enough for the service, eBay has thus far largely escaped attention.
Some eBay sellers are speculating eBay gets a kick back from the sale of USPS labels although we’ve not been able to find any hard evidence of this – File it under rumour and speculation for the moment.
“We’ve inquired with @askeBay on this twice now via Twitter, unfortunately eBay have chosen not to respond to our inquiries.”
eBay’s position as the second biggest customer of USPS should put them in a powerful position however and the question does have to be asked if they are such a big customer why can’t they negotiate absolutely amazing rates for eBay sellers?
Is there a margin on Postal Services? The evidence certainly suggests that in the past there has been room to negotiate as demonstrated by Stamps.com who made a living off discounted USPS postage rates for years (although when they lost their USPS kick back they started charging customers 3% to cover costs).
It’s likely few would complain eBay were taking a cut of postage rates if they were at the same time enabling eBay sellers to buy postage at cheaper rates than they could get anywhere else. Why would you care if eBay got a kickback if you’re getting a fantastic deal?
One problem is that if eBay sell a single courier label, the carrier has to divert to pick up a single parcel whereas sellers with their own courier contracts will have multiple parcels collected daily. In the US however, USPS call at practically every single household in the US on a daily basis so there’d be little additional work involved in picking up ad hoc outgoing packages.
The truth is however, even due to their massive size, eBay haven’t been great at negotiating courier deals on behalf of their seller customers. All too often we look at the rates on eBay Postage and then talk to relatively modest sized retailers discover that they’ve negotiated a much better rate direct with the courier. It’s time for some deals to be done.