For a decade or more, eBay tolerated a selling practice known as “Amazon drop-shipping” that left some buyers confused or upset when their orders arrived in Amazon boxes. In 2017, eBay even told sellers it allowed the practice. But with no advance warning, eBay is now prohibiting the controversial practice, and it has yet to notify sellers.
eBay began redirecting its “Product Sourcing” policy page to one called “Drop shipping” in 2018, and at some point it modified the page (an EcommerceBytes reader told us eBay modified the policy last week), adding the following language:
“Drop shipping, where you fulfill orders directly from a wholesale supplier, is allowed. However, listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not permitted.”
eBay is attempting to put a damper on what we identified in 2012 as eBay-Amazon arbitrage. It can be confusing to understand the difference between an order received by a seller who is engaged in Amazon “drop-shipping” versus a seller using Amazon FBA to fulfill their multichannel orders. Both types of orders are shipped to customers inside Amazon-branded boxes, but there is a way to tell the difference: “Multi Channel Fulfillment orders” (MCF), as they’re called, do not have Amazon branding on the packing slip.
In our 2012 report, we explained that we ordered items from a drop-ship seller on eBay and received them in Amazon-branded packages; we could see the items were sent as “Gifts” with our own names displayed as the sender rather than with a packing slip showing the seller’s business name. That indicates the seller used her Amazon Prime account to send the items to us, enabling her to offer fast shipping at no cost.
That can be upsetting to buyers, particularly if they’ve paid an eBay seller for shipping, only to find it became pure profit to the seller. In November, an eBay buyer shared their reaction when their package arrived from a seller who had apparently used their Amazon Prime account to “drop ship” the eBay order for free:
“We recently bought some hair care products on eBay. They arrived in an Amazon Prime box (no packing materials and both jars were cracked). What the Seller was doing was using Amazon as a warehouse. She purchased the item we bought from Amazon using their gift program-thus being able to ship to another address. When we complained to the eBay Seller she responded that we needed to complain to Amazon not her! Complained to eBay, but got nowhere. That category (hair care products) is full of high negative feedback sellers. This is just a heads-up for fellow eBayers.”
And earlier this month, a seller generated 18 pages of comments when they complained they had received an eBay order inside an Amazon Prime envelope with a gift receipt inside. “I am tempted to give the seller a neutral. I am sick of the deception,” the eBay buyer wrote.
Enterprising sellers have even automated the process of Amazon drop-shipping using software programs to scrape Amazon listings and post them for sale on eBay under their own account. When the program registers an order from an eBay buyer, it then automatically orders the item on Amazon with a request to the seller to ship the item to the eBay buyer directly. Easy-peasy, with no risks associated with having to procure and hold inventory.
eBay began cracking down on sellers who used such software in Israel last year. And in Australia, eBay announced a policy prohibiting Amazon drop-shipping as part of its March 2018 seller update.
eBay Australia also went further: it prohibits sellers from using third-party fulfillment services operated by retailers or marketplaces: “This policy will not affect you if you use third party fulfilment services which are not a marketplace or a retailer for your eBay orders that are fulfilled from within Australia.”
eBay Australia left no ambiguity about sellers who use FBA, writing, “The Fulfilment by Amazon service does not satisfy the third-party fulfilment conditions under this policy.”
However, eBay made no such mention of a ban on services like FBA on eBay.com that we could find. That lack of clarity is bound to worry multi-channel sellers who use FBA, especially in light of eBay’s approach in Australia, which took effect on April 4, 2018.
eBay Australia’s explanation sheds light on the company’s concerns: “When eBay orders are sent by another retailer or marketplace, it can cause confusion for customers and affect trust in the eBay marketplace.”
But eBay was also dealing with Amazon’s entry into the Australian market and was rolling out its own version of FBA for sellers wanting to use a fulfillment service.
eBay Australia attempts to put some bite behind its policies by stating, “We have various ways of monitoring and detecting infringing behaviours. If you want to report suspicious behaviour, please contact our Customer Support team.”
It’s interesting to note that sellers reported seeing the new eBay.com policy just days after eBay invited some sellers to participate in its own fulfillment program in the US.
While some may see the new prohibition on certain forms of drop-shipping to be a negative – especially to sellers who use third-party fulfillment services, we expect many will view eBay’s latest policy change positively. However, the fact eBay rolled out the policy with no announcement or notification to sellers is sure to be unpopular among most sellers.
Let us know what you think by leaving a comment on the EcommerceBytes Blog.