EcommerceBytes-NewsFlash, Number 2954 - December 11, 2012     1 of 3

A Closer Look at eBay's New Global Shipping Program

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eBay said it is seeing early positive results of its new Global Shipping Program (GSP), which is currently only open to selected sellers. Manish Joneja, eBay Senior Manager of the Global Shipping Program, said both buyers and sellers who have sent and received international orders through the program have provided positive feedback.

Joneja said eBay's GSP process makes international transactions as simple as a domestic transaction by removing complexity and the risk while providing transparency. Cross-border trade is a huge opportunity for eBay buyers and sellers, he said.

eBay announced the Global Shipping Program in November, two months after EcommerceBytes alerted sellers to the pilot program then in stealth mode. Sellers have said they are interested in the additional exposure GSP offers their listings while not having to worry about the tasks associated with international orders, but have told EcommerceBytes they have some concern that the service will make their listings appear much more expensive than domestic listings on eBay's other country websites.

eBay has partnered with Pitney Bowes on the program so it can offer services similar to those of a freight forwarder - U.S. sellers send international orders to a U.S. hub where Pitney Bowes processes and sends the items to the international buyer. The program includes buyers in UK, Canada and Australia and 15 other European countries. GSP does not include Italy - not surprisng, as it has a reputation among eBay and online sellers as having an unreliable delivery infrastructure.

Joneja said sellers participating in the program are seeing expanded sales and new customers from countries they hadn't had access to before. Sellers have been happy with service levels for tracking and delivery time and for protected DSRs for items that are beyond their control, and "we're also hearing from buyers that it's a great experience too," he said.

How the Global Shipping Program Works
Joneja walked EcommerceBytes through the program. First, sellers must check a box to enroll in the Global Shipping Program. Sellers are required to ship orders to Kentucky rather than sending them directly to buyers in the 18 different countries that the program encompasses. Once sellers have delivered the items to eBay in the condition it was expected to be delivered, eBay takes the seller "off the hook" for any damage and INRs (Item Not Received) from then on, Joneja said.

But does the processing center in Kentucky actually open up packages before forwarding to buyers?

"Some countries require you to open items to make sure we do not ship restricted items to those countries," according to Joneja, "so there are cases when we do open the packages to make sure we have the country of origin if it was not specified on the listing, if we cannot figure out without opening it to make sure it is not a restricted item to abide by the import/export laws."

Pitney Bowes, on behalf of eBay, takes the item, prints the customs forms, and ships it to the buyer address. There will be interim tracking data from the time the item leaves the door to the time it arrives at the buyer door, with the potential for several hops between the Kentucky processing center and the buyer.

Can sellers enrolled in the program indicate which items they want to go through the program, or is it all or nothing?

"You can opt in to GSP, but we have provided flexibility to the sellers to choose whether they want to use GSP for a listing or not. That's very important, because obviously sellers would want to pick and choose which items they would want to sell via GSP. Some sellers have agreements with retailers for not selling those items (outside the country), so we needed to provide that flexibility and it's already available."

When asked whether the program puts greater demands on West Coast shippers who must send items to Kentucky, Joneja said the program allows sellers to ship items to multiple countries but "becomes domestic for our sellers - we haven't introduced any new domestic shipping requirements with GSP."

eBay's mobile website supports GSP; eBay mobile apps support buying GSP items but not payments. eBay hopes by the end of the year to upgrade its iOS mobile app to fully support the checkout (currently buyers must checkout and pay for items outside the mobile app).

Shipping Costs
We asked Joneja, if an international buyer ordered a low priced item with a high shipping cost from a U.S. seller, and then decided after receiving the item that shipping shouldn't have cost so much, could that buyer give the seller low DSRs for shipping costs?

"We are guaranteeing duties and taxes, so when the buyer gets it, they should not feel we're charging higher because we are guaranteeing it; if we have to pay more, we'll make sure we don't hit the buyer and seller with that. From a DSR standpoint, we are protecting our sellers from ship cost and ship time DSRs."

Restricted Items
eBay has designed the system to block international sellers from checking out if they try to purchase an item from a U.S. seller that is restricted by import laws. However, if eBay catches such an item in the shipping center, because of a changed law, for example, eBay will return it to the seller. "We will protect the sellers from the (low DSR) ratings in case the buyer leaves a negative feedback for that because it's not a seller's fault, it's sort of buyer fault."

"If we have to return an item because of restrictions, we will take care of the sellers and the buyers. It's something that is out of control of everybody, it's import/export law, we'll make sure sellers and buyers do not get dinged because of that."

If an item is restricted through GSP to be shipped to a particular country, Canada for example, then the buyer won't be able to purchase the item in the buying flows, he explained. Joneja also highly encouraged sellers to take care of restrictions since they're more privy to agreements they have with manufacturers, for example. "The item may or may not be visible in search results, depending on various factors (e.g. Buyer is logged in or not, Buyer last session, Buyers primary shipping address etc.)"

Other Restrictions
Does the program impose limitations in terms of new versus used, auctions versus fixed-price listings; and what about categories, such as art or antiques?

"Both fixed price and auction listings are eligible under the program, and it automatically calculates international shipping and import charges for both methods. There will be some limitations for new versus used later on due to import/export restrictions. For example, when we launch in Latin America, some countries do not support import of used goods, so we will take care of that.

"We are constantly looking to add more and more categories to the program. For instance, recently we added many more categories in collectibles and sports. Have in mind that some categories have items which might have export restrictions in regards to specific licenses and controls. We are doing our due diligence before we open up more categories."

Higher Cost for International Shoppers
What about sellers' concerns that buyers are not going to want to pay more for items delivered through eBay's GSP program?

Buyers are now excited about the fact they now have a service that was not available on these items before, Joneja said. "They don't have to worry about the surprise charge or delivery and they can track these items. We're actually seeing the pent-up demand in many categories."

eBay's objective is to remove complexity and risk from international trade and enable seamless and borderless commerce. "It gives peace of mind to buyers and sellers, that's the level of comparison we need to make with these services," he said. For example, a seller in the test group is actually seeing sales increase dramatically even though the perception is there of higher cost. Buyers are showing they are willing to pay for the service in order to ensure they receive items with no surprise charges. It's a volume play, too, he said.

How Pitney Bowes Is Compensated
We asked Joneja how Pitney Bowes makes money on the transactions it profits on behalf of eBay, as many sellers have wondered if it was marking up shipping and other costs and passing them along to the buyer.

Joneja said, "Buyers pay for international shipping and handling and import charges, and that takes care of Pitney's services to process the parcel at the shipping center (including customs forms prep, international labels, repackage as required), pay customs and duties and to ship the parcel internationally."

Since eBay has a lot of buyers and sellers, Pitney Bowes is giving eBay very competitive rates, Joneja said. "If you look at those costs, they are very competitive in the market. That's always included in the price."

More information about the program - including a list of eligible countries, restricted categories and prohibited items - is available on this eBay help page. eBay has also created a page for Global Shipping Program FAQs.

Joneja said eBay is very excited about the program and wants to adapt it to seller and buyer demand, and said they are gathering all the feedback through the pilot program to make sure to deliver the best value for consumers. Over the next few months, eBay will continue to open up the program to additional sellers and will add more categories and countries.


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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