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eBay CEO Downplays Delivery Speed, Plays up Longtail

eBay CEO Devin Wenig downplayed the importance of speedy delivery during a presentation to Wall Street investors on Tuesday, explaining eBay is moving from selling commoditized inventory to “moving down the tail” to millions of unique items and millions of sellers – eBay has an “extraordinary breadth of inventory,” he said.

eBay’s not good at logistics and first-party price competition which usually win the day when it comes to commodities, Wenig said candidly.

That’s not what his former boss thought. Just 2 years ago, John Donahoe said he believed same-day service would be an economical service for eBay to offer.

In an interview, Donahoe had offered the example of a traveler who, landing in New York, discovers that he has forgotten his iPhone charger. “I don’t want to have to find a store to buy it. I want it delivered to me so I can get my phone charged,” he explained to the reporter.

Two years later, in July of this year, eBay killed off its eBay Now same-day delivery pilot in the US, and Wenig laid out a different philosophy this week.

The new CEO said when you’re buying a commodity item, it might matter to you a lot that you get it in one day. If you’re buying a bumper for a 1947 Ford, instant delivery isn’t the key determinant in your purchasing decision.

“I don’t think all things are particularly attuned to (Amazon) Prime. As you move down the tail and there’s more unique inventory, and more inventory in the categories where we really show off strong, logistics become less relevant.”

Uniqueness and brand matter more than instant delivery, he said.

But that doesn’t mean delivery time is unimportant. eBay shipping times are better than people think, Wenig said, citing two data points: 50% of orders are delivered in under 3 days, and two-thirds of orders are delivered in under 4 days. “That may not be 2-day, but it’s pretty close, and we don’t charge a fee for that” – an obvious reference to Amazon Prime.

And eBay isn’t getting lax when it comes to demanding that its sellers ship quickly – as part of its Fall Seller Update, eBay created a new on-time shipping metric, and it’s relying on scans from shipping carriers to confirm shipment, and, failing that, buyer confirmation.

But Wenig was very clear in his presentation at the RBC Capital Markets TMT Conference this week that eBay was not going to deliver as quickly as certain rivals.

“We’re not a logistics company, and we’re not going to win on logistics. What we’re gonna win on is predictability, great value, and “fast enough.”

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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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.