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eBay Report Shows Shipping Is a Barrier to Trade

A new report from eBay called “Empowering People and Creating Opportunity in the Digital Single Market” says small Internet-enabled businesses in Europe grew faster than other businesses as the European Union recovered from its recession. The report also included recommendations on helping small- and medium-sized sellers, including a call for an efficient parcel delivery market in Europe and beyond.

eBay’s report highlights the resilience of small businesses selling on its European marketplaces, especially in countries hardest hit by the economic crisis. Some factoids in support of its argument: “eBay-enabled small businesses in Spain, Italy and Portugal saw their sales growth outpace their country’s GDP growth by on average approximately 15-20% each year from 2010-2014. Greek eBay SMEs exceeded GDP growth by about 25% on average every year during the same time period.”

International trading is a growing part of eBay sellers’ business. “On the eBay marketplace, cross-border commerce within the EU grew by 61% for that period and commerce with non-EU countries grew by 104%,” the company revealed.

eBay said the European Commission’s Digital Single Market (DSM) strategy can help small European businesses flourish, and said, “eBay is hopeful that through meaningful DSM reforms we can create an even better business environment for Europe’s online entrepreneurs.”

In a section at the end of the report, eBay made a series of recommendations. The first won’t come as a surprise to any online seller who has had to fulfill an international sale and struggled with high costs, slow delivery, and inconsistent tracking: eBay recommended the creation of an efficient parcel delivery market in Europe and beyond.

eBay cited estimates showing the trade-reducing effect of shipping costs is four times larger for online commerce compared to traditional commerce. It said micro and small retail businesses would benefit from parcel delivery services that are:

  • More affordable than today where cross-border prices for parcels are on average twice as high as domestic benchmark prices.
  • Faster with best-practice being 3 – 4 days anywhere to anywhere.
  • More reliable with delivery within one day of promised date.
  • Accessible, in terms of drop-off, pick-up, labels, information.
  • Transparent, such as end-to-end shipment tracking and standardized returns.

eBay’s second recommendation will also resonate with online merchants: No more online sales restrictions. “An increasing number of manufacturers has in recent years responded to such broadened and intensified market competition by prohibiting their retailers from trading online and in particular on online marketplaces such as Amazon, eBay, Rakuten and Allegro (“online platform bans”).”

eBay had a laundry list of why such prohibitions were bad for consumers as well as sellers: “Such distribution restrictions prevent SMEs from growing online; they limit intra and inter-brand competition, leading to higher prices, limited choice, reduced convenience, and obscurity of information for consumers; and they inhibit effective access to foreign markets, amounting to one form of geo-blocking that prevents consumers and businesses from reaping the benefits of a fully connected Digital Single Market and should as such be closely scrutinized.”

The report cites interesting statistics about European sellers on eBay:

  • European eBay businesses sell to 18 countries on average.
  • Since 2011, more than 130,000 new businesses have started on eBay in Europe, with sales of nearly 18.5 billion Euros.
  • Hundreds of thousands of European SMEs sell on eBay. In total, 93% of these engage in exports (in many markets up to 100%). The majority of these businesses are micro firms with less than 10 employees. (eBay says offline, only 26% of SMEs export.)
  • 77% of eBay-enabled SMEs sell to five or more countries and 39% sell to more than four continents, eBay refers to these SMEs as “Small Global Traders.”

The report contains more information and additional recommendations – you can find the report in PDF format on this page of the eBay Main Street website.

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Ina Steiner
Ina Steiner
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.