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Tue July 6 2010 20:23:41

eBay Should Not Follow Amazon in Offering Fulfillment Service

By: Ina Steiner

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To the Editor:
Re: Barrons blog post - "eBay Should Start Amazon-Style Fulfillment Unit, RBC Says"

The author indicates his belief that eBay needs to develop it's own fulfillment division similar to Amazon. It is obvious that the author does not get the nature of eBay's model.

eBay's business model has never included maintaining physical inventory or possession of third party seller merchandise for shipping purposes

I believe this points to how much negative influence Wall Street has on eBay, and why eBay suffers when it's CEO bows to analyst expectations in the hopes of pumping up the stock price at any cost.

I decided not to sell on Amazon mainly because I did not want to trust Amazon with my supplier details or with my physical inventory, and I certainly would not trust my physical inventory to an eBay fulfillment operation either.

Having my inventory in my possession guarantees I am protected from inventory shrinkage, and I would not give up control of my inventory to Amazon, eBay or any other third party to manage or ship my orders.

A Wall Street analyst's suggestion that eBay enter the order fulfillment business is ludicrous at best.
Regards,
Ric

Comments (21) | Leave Comment | Permalink
Readers Comments

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: NullApps This user has validated their user name.
Web Site

Tue Jul 6 21:08:29 2010

Given the direction eBay is headed they will never be able to compete against Amazon without some sort of fulfillment solution.  FBA gives Amazon a huge competitive edge that will only grow.  I'd prefer they didn't develop their own and left it to the developers though.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Joyful

Tue Jul 6 22:28:20 2010

As far as I know, eBay has no experience whatsoever in warehousing or shipping. They'd have to buy a company that knows third-party fulfillment and has facilities and procedures that can be expanded; from my book-centric perspective, that would mean a company like Alibris.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Gailete
Web Site

Wed Jul 7 00:07:50 2010

This guy was joking right? What is in the water where he is at? Ebay isn't competent to run a company much less deal with physical inventory. I can just see them taking 2 months to ship if they can find the stuff and then whine because the buyers give ebay negatives. Maybe it is a good idea, hmmm.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Yiya

Wed Jul 7 01:46:14 2010

If they just go with the big box companies like smartbargains and buy.com they should rely on their fulfillment. For smaller sellers that only have one warehouse or have valuable small items like jewelry or collectibles, the thought of giving control to ebay and its lack of experience in any matters opertional makes me shudder. If they go with a 3rd party, they might pull it off on inexpensive items but why risk it? They have only been a ''venue'' remember? It takes experience and Amazon has done this since day 1 and although they might think they can ''buy'' experience  since ebay has its own quirky corporate culture and are behind in most platforms.. it won't work.
They can try it but there will be many mistakes and will lose customers or another even bigger SKYPE disaster.

Shipping quickly, accurately and packaging are one of the most important elements in customer satisfaction. There are always errors in new systems. They might try to do it gradually in a small market but few sellers would trust ebay with their products. Ebay would have to have some sort of surety bond so the sellers don't go under if eBay loses their items, misroutes shipping and don't forget pilfering, the biggest problem in the industry today. Also customer service is not the strong suit at eBay.

Amazon started doing this from the get go like overstock. People thought it was so great early on that eBay didnt have the liability of product ownership and that is part of the reason Wall Street liked them so much. Now they blame that for their failure! For them to suddenly take this on...it won't be pretty.

They can't be the next Amazon. They have to do some outside the box thinking. They have no transparency as it is; it's like a bad ebay dream to think even about it ( I think all sellers get those ebay dreams). How would sellers merchandise and reputation ( in the event of all the losses imaginable since they do not know anything about operations)be protected unless they bought it all outright. what if they bought all the merchandise outright and changed their minds like they always do or decided to return it to the sellers and charge restocking fees?

It's funny how all the corporate analysts just say ''be like Amazon'' Amzzon did not make it to where they are buy not spending on R & D and being a cookie cutter company. This would be another chapter in no clarity of vision, I think. Meg did a nice job for herself and Goldman but was a visionary only in that she made a bundle. The company has to find its creative spirit which it most likely won't or perish and become the five and dime of the internet. We shall see.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Red Ink Diary This user has validated their user name.
Web Site

Wed Jul 7 01:56:22 2010

@Yiya

You should know that Buy.com does not have a fulfillment department. Items sold under their own name are all drop shipped. Their third party sellers do their own shipping.

I would call fulfillment by eBay a nightmare, not a dream.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: colorfulone
Web Site

Wed Jul 7 04:30:40 2010

I've heard horror stories with amazon's fulfillment service.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: how about

Wed Jul 7 06:38:34 2010

Ebay should be what Ebay was. They need someone that has a vision that knows how to generate excitement and create buzz. Boring shopping is what Amazon and Walmart already do and do well.

Problem is none of these people think out of the box, they only concentrate on lining their own boxes with cash before fleeing the floundering companies they work for.

Donahoe crushed Ebay at it's turning point in that critical time period 2008-2009 so instead Amazon was rewarded for being consistent while Ebay changed everything for the worse.

Donahoe took away all the fun excitement and buyer familiarity, screwed up everything with Best Match, killed the auctions and disoriented shoppers already familiar with the Ebay landscape. He sent sellers away in droves bitter and angry they voiced their opinions all over the world and no longer advertised for ebay they advertised against.

I'm just shocked Donahoe is STILL employed by Ebay.

At one point early on in 2008 I could of turned ebay around in a heartbeat but now so much damage is done I don't think there is much that can save it barring a miracle from God.

The first step is getting rid of Donohoe as soon as possible. The sooner the better. Every day that goes by with him leading is like a week lost in the fight to save ebay.

He is wayyyyyyyyy out of touch with the reality of running a business like ebay.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Paul Fischer

Wed Jul 7 07:46:03 2010

Frankly I wouldn't give ebay control of my dirty socks for a day much less my sales stock.

I've been on ebay selling for over 14 years now (yes, since the start) and I can't even begin to tell you how literally sick to my stomach it makes me to see what the site has become... As another poster said, the (ebay) can't even run their own freaking site right, what in God's name makes ANYONE on the planet think they could take something like Fulfillment on? What a joke....

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: []\\\\\> eBay

Wed Jul 7 09:40:33 2010

Paul Said: ''As another poster said, the (ebay) can't even run their own freaking site right, what in God's name makes ANYONE on the planet think they could take something like Fulfillment on?''

I agree! And if this happened, buyers would be able to punish SELLERS for eBay's errors.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: another deb

Wed Jul 7 09:58:02 2010

there is no way this would or could work for an antique collectibles business.  Sellers listing rare authentic antiques.  It would eliminate my type of business off ebay, what little of it is left on ebay, altogether.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: realitycheck

Wed Jul 7 10:22:42 2010

You just got to LOVE how Wall street analyst's, analyze ANYTHING!  How many times do they have to get it WRONG before people STOP listening to one word they say?

All someone has to do these days is CLAIM to be an "expert" and poof, everyone listens to them, regardless of how many things they get WRONG!

How many FORTUNES have been LOST do to Wall street "analyst's".  Of course they do not care when they get it wrong because they lose NOTHING not even their reputations!

I trust Miss Cleos visions as much as I trust ANY Wall street analyst.

I recommend people go and lsiten to some congressional hearings of many f these wall street analyst's and listen how CORRUPT they ALL are.  The SCHEMES they and their bosses are involved with and how they REALLY think about their clients/stockholders and their money.

They are WORSE than WORST of the used car salesmen. Let us not forget Wall Street are also the people who INVENTED DERIVATIVES, which was nothing more than a PONSEY SCHEME designed to make Wall street and their buddies the Bankers RICH, in which they knew full well once it was MAXED OUT the only ones who would pay for the scheme were the taxpayers, and the bailouts world wide have been doing exactly that.

So, please spare me of one more Wall street analyst's CRIMINAL!

As for ebay also fulfilling the orders, I say sure, as long as ebay pays me UPFRONT for all of my products for the FULL asking price, I would GLADLY ship them my products and let THEM deal with the customers.

I would NEVER EVER hand ANY of my products over to ebay without FULL payment for ANY reason.  I would not do it with Amazon either.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

This user has validated their user name. by: Al G

Wed Jul 7 11:49:54 2010

There is one point nobody seemed to addressed, i.e who is going to pay for the fulfillment service? If you notice, Amazon's fee structure is a bit higher than eBay's. They have brick & mortar warehouses & personnel to support in addition to the software/server portion of the business.

If eBay gets into the fulfillment business either by acquiring or partnering with an existing business, or building their own facility[s], someone has to pay - and you can bet your bottom dollar it will be the sellers!

So higher fees will prevail with the added risk to eBay that this endeavour will not work out a la Skype and, again, fees will go up to cover the debacle.

Bad idea. I'm sure Donahoe is salivating at it. I just wonder if my Business 101 teacher has gotten his breath back from laughing so hard.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: old timer

Wed Jul 7 16:48:38 2010

Yes, let eBay handle your fulfillment.  eBay, the company that can't get a simple shopping cart working, that alienates large numbers of its sellers with every "enhancement", that has some of the worst customer service organization in the world, and on and on and on....

Yes, let eBay handle your fulfillment to the same high standards they show in managing the rest of their business.  And by the way, when eBay screws up an order, guess who the irate buyer gets to ding -- it's not eBay, it's you the seller.

Another outstanding idea that fits with the rest of JD's disruptive innovation!

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: nadine

Thu Jul 8 02:31:49 2010

What's particularly amusing about Wall St analysts now urging eBay to imitate Amazon more closely is that the same Wall St analysts spent many years dumping on Amazon and Amazon's business model. Too old fashioned! Too many fixed costs! Too low margins! Limited growth potential!

Now, Amazon having proved them all wrong, they urge eBay to imitate Amazon -- as if eBay possibly could.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: buck efay

Thu Jul 8 10:04:00 2010

FBA sellers often complain about shrinkage & Amazon has been doing this forever. If they have losses with loads of experience, how could anyone in their right mind consider Ebay capable of handling this? Ebay will hire the dumbest, cheapest employees to handle YOUR valuable goods & I guarantee no tracking numbers for Paypal disputes.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: buck efay

Thu Jul 8 10:09:21 2010

Amazon charges a higher fee for FBA, sure Ebay would follow suit, plus you pay for storage, both way shipping & must prepackage everything with FBA. All huge added expenses Ebay wants you to give them.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: Theresa M. Moore
Web Site

Thu Jul 8 14:10:02 2010

One of the reasons I no longer use eBay for selling direct is competition with the junk set with the lowest minimum bids possible. eBay is a yard sale online, not an actual retailer. Do not expect any sales from them. They make money off the listing and winning bid fees and are not interested in hosting an actual store. Besides, just because they sell stock on the market does not make them a good investment.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: T Moore
Web Site

Thu Jul 8 14:13:28 2010

eBay is just an online yard sale, where only the lowest minimum bids attract shoppers. Once the listing and final value fees are taken out you are left with very little profit, so I would not see them as a useful investment of time or money.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: andanotherthing

Thu Jul 8 15:08:57 2010

I agree that this is a non-starter for antiques and collectables sellers - unworkable.  And could JD tell me one thing - why SHOULD eBay be like Amazon - it's so not the same thing, even if it would like to be.  I go on eBay to find interesting things... I use Amazon when I want a book or CD but certainly not to float my boat.  It's reviews are crap, it's search results are even more confusing than eBay's and I feel frustrated in not having a personal relationship with the person I am buying from.  Ebay COULD be all the things I love ..... and yet it wants to emulate the type of organisation that bores me rigid.

eBay Should Not Follow Amazon in Offering Fulfillm   eBay Should Not Follow Amazon in Offering Fulfillm

by: realitycheck

Fri Jul 9 00:48:51 2010

I agree, Amazon is very boring and confusing.  You are just a $$ sign to amazon, nothing more.

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