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EcommerceBytes-NewsFlash, Number 2020 - April 15, 2009 - ISSN 1539-5065    1 of 3

eBay Eliminates Third-Party Checkout, Impacts ProStores, Vendors

By Ina Steiner
EcommerceBytes.com
April 15, 2009




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eBay will eliminate its Third Party Checkout Redirect on eBay as of June 15, 2009. Sellers who use third-party checkout solutions will no longer have the opportunity to display branding, cross-sell, up-sell and other merchandising opportunities at point-of-sale. This means a loss of sales for sellers and lost revenue for vendors who collect commissions on merchant sales. eBay will do away with third-party checkout completely next year.

The elimination of off-eBay checkout is clearly part of the company's move to try and become a marketplace that can guarantee all transactions by collecting information about when buyers pay and when sellers ship. On Tuesday, eBay Director of Seller Development Todd Lutwak told AuctionBytes that, over time, eBay would roll out additional tools and incentives for sellers to provide eBay with shipping information. eBay is also moving toward capturing data from payment services, including the ability to accept merchant credit cards in eBay Checkout. This will allow it to ramp up a new dispute process, introduced on Tuesday and launching in June.

While eBay had first announced plans to phase out Third Party Checkout last year, the timing of the change caught sellers and some vendors by surprise. And while eBay made major announcements on Tuesday, its decision to eliminate Third Party Checkout was not made public beyond letters sent to some sellers. (It was not even mentioned on the eBay Certified Provider Program blog.) The move impacts vendors such as Auctiva, ChannelAdvisor, Kyozou, Vendio and Infopia. It also impacts eBay's own ecommerce offering, ProStores.

Infopia and ProStores have opted not to continue to offer Third Party Checkout. In a letter to customers, Infopia said the upcoming changes to eBay Checkout would have little or no impact to Infopia clients who sell on eBay and pointed out that many of its merchants are already using eBay Checkout. The company said it felt its resources would be better used in further developing innovative tools and technologies that directly result in incremental sales and success for its clients.

Infopia also said that retailers who use only PayPal to process their credit cards would not need to take any action. Retailers using Authorize.net for credit card payments would need to register their merchant account information with eBay. "As part of switching to eBay Checkout, eBay will soon announce they will have a seamless integration with other merchant providers in the My eBay portal." (This appears to mean eBay Checkout will allow sellers to accept credit card payments through their own merchant credit-card accounts.)

ProStores also sent a letter to its clients stating it had determined that "the investment required to make these changes would be better spent on other higher priority, merchant-requested features." One of the biggest incentives to eBay sellers in using ProStores was the ability to drive traffic from eBay to ProStores where commissions are 1.5% (on average) versus 8.75% - 12% commissions on eBay items.

Said one eBay seller, "Kinda negates the reason to have a ProStore," and asked for advice on finding a new storefront service. Another ProStores merchant wrote on the discussion boards, "If anything, ProStores users should have exclusive access to this feature, since ProStores is an eBay company."

Update 4/15/09: I received an email from eBay spokesperson Usher Lieberman today stating: eBay is narrowing access to third-party checkout to approved providers and has asked these third-party checkout partners to update their user interface or UI to conform with a set of guidelines provided by eBay. This DOES NOT involve any changes to the third-party checkout functionality consistent with eBay listing policies and existing legal agreements, just to the user interface. Some of the approved third-party checkout partners may opt out of these user interface changes, in which case they will need to begin using eBay Checkout. I asked for further clarification, Usher Lieberman has yet to reply.

eBay did in fact post an announcement in reaction to this article stating it is not doing away with third party checkout in June. However, they failed to provide details and have yet to explain the effects of these changes.

Some third-party vendors have reacted to the article on the AuctionBytes Blog, including Infopia who confirmed that eBay has eliminated the ability for merchants to cross-sell and up-sell items from the checkout flow. eBay's own subsidiary ProStores had told its customers on Monday that eBay was doing away with Third Party Checkout in 2010, but eBay's announcement did not confirm or deny this.

The kind of situation that arose today only confirms our editorial instincts. eBay said today in its announcement, "the definitive source of information about eBay is eBay." I eagerly await more information from eBay about Third Party Checkout changes coming in June!

Comment on the AuctionBytes Blog

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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