Subscribe    RSS Feeds    Twitter            Contact Us   
728_header.jpg (23748 bytes)
 Home   EB Blog   AB Blog   Letters   Podcasts   Forums   EPIS   Classifieds   EKG   Ratings 
Web Site     
  Rate Services
  Amazon Fee Calculator
  eBay Fee Calculator
  Etsy Fee Calculator
  Auction Calendar
  Collectors' Links
  eBay Promo History
  Bookshelf
  Fraud Resources
  Drop-Off Store Laws
  Payment Holds
  Ecommerce Resources
  Photo Tips
  Marketing Inserts
  Yellow Pages
  Advertising
buyersmarket2aaa2.JPG (7729 bytes)
AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Mon Mar 28 2011 17:44:51

GSI Gives eBay Access to Big Brands and New Services

 By: Ina Steiner
Sponsored Link
eBay agreed to acquire GSI Commerce for $2.4 billion. GSI provides a full-service ecommerce offering to 180 large retailers and brands, including Calvin Klein, ToysRUs and Dick's Sporting Goods. The acquisition will help eBay to expand large merchant presence on eBay Marketplaces and to extend PayPal and Bill Me Later (BML)'s reach on the GSI Commerce platform, which it pegged at $3.5 billion.

The acquisition follows last year's acquisition of 49% of Magento, an open-source ecommerce software for online sellers that lets eBay reach small and medium sized merchants.

eBay and PayPal already work closely with GSI, and the acquisition fits nicely into eBay's strategy of focusing on large merchants on its Marketplaces and extending PayPal and BML to offline retailers. It also helps eBay fend off threats from Amazon.com and Google.

The Amazon Threat
Amazon.com offers merchants fulfillment and customer service capabilities. eBay can now offer its largest sellers the same through GSI, which operates fulfillment centers and Call Centers. According to its website, GSI operates over 2.6 million square feet of warehouse fulfillment space through the United States, Canada and UK, shipping over 67 million units in 2009.

Several analysts asked eBay if it would launch "Fulfillment by eBay," a reference to Amazon.com's fulfillment service. eBay CEO John Donahoe said eBay would introduce GSI's fulfillment service to some of eBay's largest sellers, and called it an incremental opportunity. eBay will retain seven of GSI's 9 warehouses after the acquisition.

Interestingly, eBay will now have access to precious merchant data such as sales and pricing data on Amazon and other marketplaces, venues and CSEs.

The Google Threat
The GSI acquisition also helps eBay counter the Google threat. Google offers retailers advertising, merchandising, enterprise search, and payment processing services, and offers both mobile and local solutions. eBay and GSI together can help merchants drive demand to merchants through their marketing assets, including eBay's Triton keyword ad-buying program, Milo local inventory search product, mobile development capabilities and GSI's email marketing, FetchBack retargeting service and mobile SMS platform.

Large Merchants versus Small Sellers
eBay has been aggressively courting large retailers and brands, including Jockey, Pfaltzgraff, Tommy Hilfiger Calvin Klein, Timberland and Brooks Brothers. eBay offers them not only an on-ramp to list products, but also offers marketing and advertising opportunities including targeted emails, such as its campaign for Barnes & Noble in which it sent 20 million emails to eBay buyers advertising B&N's Nook ebook reader on Thanksgiving Day.

In a conference call with Wall Street analysts, John said PayPal President Scott Thompson is often told by large merchants that they need help growing their businesses, with mobile commerce, and help figuring out social commerce. John said eBay determined that GSI was the company that was helping merchants with those tasks, and said he sees that as the biggest core opportunity in the acquisition.

eBay itself has changed the way it looks at the offline world; last year, it showed holiday shoppers on eBay.com inventory that was available at local retailers' brick-and-mortar stores. At the time, eBay's Christopher Payne said of the Gifts Nearby portal, "As online and offline commerce continue to blur, we continue to introduce innovative ways to help shoppers get the best deals available anytime, anywhere, any way they want them."

Slide 7 in eBay's presentation shows why eBay is focused on large merchants and helps explain why small, longtime eBay sellers are feeling less loved by eBay these days. eBay pegs the market opportunity of sole proprietors at $12 billion; small and medium size businesses at $36 billion; and large merchants at $160 billion.



Rue La La and ShopRunner
As part of the transaction, eBay will divest 100 percent of GSI's licensed sports merchandise business and 70 percent of ShopRunner and Rue La La, which will be sold to a newly formed holding company, led by GSI founder and CEO Michael Rubin. eBay CFO Bob Swan told analysts if eBay tried to realize RueLaLa and ShopRunner's opportunity, "we'd probably screw it up."

Under the terms of the merger agreement, GSI Commerce may solicit acquisition proposals from third parties for a 40-day "go-shop" period continuing through May 6, 2011. See details of the acquisition in the eBay press release.
Reading AuctionBytes Blog: GSI Gives eBay Access to Big Brands and New Services
Comments (56) | Leave Comment | Permalink
Readers Comments

GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Fruity This user has validated their user name.
       
Mon Mar 28 17:56:52 2011
Great, now I know who NOT to ever patron on their ONLINE STORES, no doubt the GSI commerce payment processing will be underlying PAYPAL, so no thank you:
Ace, DKNY. Levi's, Spanx, Wet Seal, HP, GNC,Sports Authority,Toys R US,Cole Haan,Pet Smart, Dell,Zales,Calvin Klevin,Nautica,NFL web stores. My eyes are bad, I can't figure out the other shops. I spit on their brands now. No doubt they will eventually have stores on ebay so they can bring in all that inflated priced merchandise

ps. you moved the location of the blogs, its difficult to find
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: gotta love it
       
Mon Mar 28 18:00:58 2011
In other news eBay thanks all the small mom and pop entities throughout the years for helping them contribute towards this milestone.

''Don't let the door hit you, you know where on your way out'', eBay says. Now we can fill up all that vacated space that we have been clearing out since 2008.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Fruity This user has validated their user name.
       
Mon Mar 28 18:02:41 2011
Die Early I think is trademarked by them
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
This user has validated their user name. by: Ric
       
Mon Mar 28 18:30:14 2011
Prediction.... eBay will destructively innovate their fulfillment service.

Within 2 years, eBay will be encouraging sellers to voluntarily join their new fulfillment service.

When sellers balk at the idea of eBay having control of their inventory, eBay will then "better align" themselves with sellers interests by demanding higher fees for items that are not processed through their fulfillment program.

The only positive here is that eventually, eBay will be in the business of shipping products. Perhaps by some miracle, they will become better informed of what sellers deal with with regard to eBay policies and eBay's promised delivery times.

They will eventually learn that the times they have been promising buyers on behalf of sellers have been totally and completely unrealistic.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Ron
       
Mon Mar 28 18:49:41 2011
If their market estimates are accurate (sole proprietor $12B vs Large Retailer $160B), the problem remains as to how much of that large retailer market that they can gain.  They have a lot of competition in terms of large retailers' own websites.  Whereas at one time they probably had 90% of the sole proprietor market and very little competition, they probably have a very small percentage of the large retailer market and huge competitive barriers to overcome.  I just don't see how they can add value to large retailers' online businesses in the long run.
I still contend that they didn't have to toss the sole proprietors under the bus to access the large retailer market.  A proper segmentation of their website and appropriate rules for those selling new, fixed priced items versus those selling antique, second-hand or unique items by auction would have been the logical thing to do.  In this way, they would have retained their traditional seller base and could have properly set up a retail marketplace.  I just don't think that they thought their strategy through to its logical results.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Joe Average
       
Mon Mar 28 19:08:46 2011
eBay had access to all these brands before, but those retailers probably did not want to cheapen their brands by selling on eBay. It is being presumptous to assume that they will allow themselves tobe courted now by a has-been auction website.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
This user has validated their user name. by: Ed Gadfly
       
Mon Mar 28 19:40:51 2011
Just a venue...

Burned victims of eBay won't buy from these new Diamonds. The people who do buy won't be buying from the ''small sellers.''

This is great for ecommerce because the eBay Small Sellers who have been kicked off the site will now be able to work in the Fulfillment Centers.

Imagine serfs, you'll finally get paid for putting stuff in boxes and sending it to people!
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Joe Average
       
Mon Mar 28 19:41:04 2011
I hope that all these "elite" brands fare better on eBay than Tommy Hilfiger, who apparently, has had a rough 5 months. Also - 98% feedback for them and ToysRUs. Pretty dismal by small seller standards.

http://feedback.ebay.com/ws/eBayISAPI.dll?ViewFeedba
ck2&userid=tommyhilfiger&ftab=AllFeedback
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: LOL
       
Mon Mar 28 19:57:17 2011
One thing eBay has shown in its acquisitions over time is that it has never innovated...the only innovation they understand is raising price.  If I were a GSI customer I would form a union, create a copy of GSI and run it for free....these large companies better get some leverage on your new employer before its too late.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
This user has validated their user name. by: Ming the Merciless
       
Mon Mar 28 20:15:22 2011
Allegedly GSI engages in the same allegedly unethical, possibly illegal, bad behavior that ebay allegedly engages in:

http://www.businesswire.com/news/home/20110328006827/en/Law
-Offices-Howard-G.-Smith-Announces-Investigation

The Sleaze Factor: a Perfect Fit!
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Digby
       
Mon Mar 28 20:44:50 2011
Wow
That's a lot of cash to outlay.

If the small sellers don't realise that ebay does not want them or need them by now, then they never will.

Fullfilment by ebay ?
They may as well start buying their own products.


GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: nadine
       
Mon Mar 28 20:58:34 2011
On the one hand, it sounds like a smart move for eBay to buy fulfillment centers and customer care for its sellers to compete with Amazon. On the other hand, one can't help but suspect that eBay management, who really have no idea what's involved in fulfillment, having no retail experience, will "destructively innovate" GSI just like they have the eBay Marketplace.

Outsourcing the fulfillment of your product requires a lot of trust. That's your interface with the customer that you are outsourcing. Amazon earned that trust over many years. I don't know enough about GSI to know how much trust they have earned, and for what clientele. But eBay? to ask that question, is to answer it, unfortunately.

I suspect the remaining GSI managers will be on the receiving end of new nonsensical metrics, just like eBay sellers have been since 2008, much to the detriment of whatever customer service GSI offers. eBay's mindset of trying to manage that which it does not understand is too entrenched. Time will tell.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: nadine
       
Mon Mar 28 21:13:45 2011
I wonder if Tommy Hilflinger is happy with eBay. I looked at its last 800 completed listings (all that eBay displayed, despite saying there were over 1500 completed listings). 23 sales, mostly low-priced items. That's an STR < 3%. And only 74 feedbacks in the last 12 mos, which is one 1 neg has trashed its percentages.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Et tu, Brute!
       
Mon Mar 28 21:20:10 2011
Your fee increases at work for you.

Oh, yeah, THEM!
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Rich
       
Mon Mar 28 21:34:48 2011
This could be a $2.4 billion dollar knockout punch. Ebay has ruined the selling experience for 400,000+ sellers and now EBay hopes a handful of huge stores will save them? Ebay forgets something important: the huge waves of pissed off sellers have either quit, downsized or stayed and raised prices and reduced customer service.  All of these reasons have helped make the Ebay buying experience worse and worse, which means that buyers who comparatively shop will choose Amazon and Google over ebay. EBay upper management doesn't understand basic psychology.  When you ruin the selling experience and make it less and less profitable; in turn; you also ruin the buyer experience.  Sellers begin fudging their grading of used items, packing with cheaper materials and communicating less and less.  Ebay's yearly fee hikes equate out to a pay decrease every year for sellers and buying from people who get pay cuts isn't as good as buying from people who enjoy their work.  The ebay discussion boards are miserable; Amazon's have happy people; similiar to Ebay back in 2004 and earlier.  And now after 5 years of fee hikes and unpopular feedback  crap; Ebay's desperate so they spend $2.4 billion and will try to compete with Amazon and Google.  Good luck Ebay; but Amazon and Google have made selling  fun and  profitable since 2004, so the buying experience on Amazon and Google are better.  Ebay has no shot to compete product to product versus Amazon and Google. $2.4 billion down the drain
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: pete
       
Mon Mar 28 21:47:26 2011
At first glance this looks like a pretty good purchase.....then you look who the buyer is and wonder how they will screw this business up.
eBay will never by Amazon keep dreaming Donut
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Digby
       
Mon Mar 28 21:58:28 2011
I think that the major alt sites have just got a 2.4 billion boost, that they could never have afforded on their own.

GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: another side of the coin
       
Mon Mar 28 22:29:15 2011
Maybe eBay is looking for a 2.4 billion write off? LOL

If the selling experienced is ruined for over 400,000 sellers, how many of those same sellers are buying or buying less on eBay?

How many friends, relative and just bad word of mouth are buying or buying less on eBay?

Where is the fun that drew buyers to eBay?

Where is the draw period? Do any of these retailers offer unique, one-of-a-kind, hard to find items?

Where can a buyer purchase the same type of merchandise being offered? Amazon? Yes. Walmart? Yes. The retailers own website? Yes.

My conclusion is eBay is done here. Roger and out.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
by: Jessy S.
       
Tue Mar 29 00:48:41 2011
Ming,

The "Lawsuit" is most likely by GSI's clients which include the clients in the graphic in Ina's post.  It is most likely that most of them don't want to be listed on eBay, and there is the fact that eBay has miserable sell-through ratings for most sellers.

If I am the NFL, I wouldn't want to see my site taken over by some clowns in San Jose.  If those clowns operate NFLshop.com, it wouldn't be the end of the site, but a fulfillment service ran by eBay would have different results than GSI's service.  For example, let's say I order an Tony Romo Jersey from NFLshop.com and I get a tattered article of clothing.  It turns out that eBay managed to find the lowest price from a seller in upstate New York who brought a brand new Tony Romo jersey and decided to post the jersey on eBay after his dog destroyed the clothing.  To put it another way, it is like having a girl wear Daisy Duke type shorts and a shirt showing her midriff to church on her first communion.  Note: the girl represents eBay.

For the record, I am sure that a good majority of GSI's clients are shareholders except they likely own a combined 20% of the company while the CEO of GSI owns about 70% of the same company.
GSI Gives eBay Access to Big Brands and New Services   GSI Gives eBay Access to Big Brands and New Services
This user has validated their user name. by: Ming the Merciless
       
Tue Mar 29 01:18:43 2011
If in fact the GSIU owns 70% of the stock, he reaps a tidy little sum from this sale while hanging the other 30% of the shareholders out to dry.

It's a page right out of ebay management's playbook, and if it isnm't sleaze then I don't know sleaze.

I ought to know sleaze quite well selling on ebay for as long as I have.

My earlier comments weren't directed at the individual companies who use GSI to sell. My comments were aimed at GSI management.

How many ebay employees bought shares of GSI last week or last last month?

Ebafia: Billions of dollars made, not one red cent in dividends paid.
Click to view more comments
1 2 3  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page.

Login for AB Verify
Be sure and use your email address and password to log in.
 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.
 AB Blog Recent Posts 
 EB Blog Recent Posts 
 AB Blog Recent Comments 


Subscribe in a reader

Archives
 
About Us      Privacy Policy & Terms      Link to Us      Partners      Our Writers      Write for Us      Press        Site Index

Copyright 1999-. Steiner Associates LLC. All rights reserved.
 




Powered by Perl Web Blog
© 2005/2015 Ranson's Scripts