Online marketplaces like eBay are always looking for growth opportunities – and one of the most successful has been to charge sellers advertising fees to promote their listings. But at certain points in eBay’s history, it also experimented with introducing logistics services – storing and fulfilling orders on behalf of sellers.
eBay had floated the concept of an Amazon Prime-like service as early as 2009, and in July of 2019, eBay announced it would launch “Managed Delivery” in 2020:
“eBay is introducing Managed Delivery, a cost-effective fulfillment service to launch next year, beginning in the U.S., that will provide shoppers faster and more reliable delivery on millions of popular products. The initiative will enable sellers with high-volume inventory to meet rising consumer expectations while reducing cost and complexity.
“Managed Delivery will provide sellers the ability to store, pack and ship their products through expert logistics partners managed by eBay. The new service allows sellers to store inventory closer to buyers in strategically located warehouses across the country, resulting in faster delivery time and lower shipping costs.”
At the time, AdWeek quoted then-CEO Devin Wenig in a July 2019 article: “We don’t want to win a fast shipping game; that’s not the point.” But Wenig departed in September, and by the end of the year, eBay shuttered the program entirely.
eBay tried a different logistics program in 2013, launching a same-day delivery service called eBay Now. It sounds impossible for eBay to deliver items on its platform the same day – and that’s not what the service was trying to do. Instead, eBay partnered with large retailers to deliver their in-store items locally – although that doesn’t sound like it would make much more sense. But that was before activist investors forced eBay to sell eBay Enterprise (GSI Commerce and Magento) that gave it relationships with large retail chains and brands.
In explaining eBay Now in 2013, we reported:
“The eBay Now mobile app lets users in select cities order items from brick-and-mortar chain stores such as ToysRUs and Macy’s and receive them from an eBay courier to a specified location. eBay Now charges $5 per delivery (per store) with a $25 minimum order.
“An eBay spokesperson told EcommerceBytes, “With six fewer shopping days this year, every minute of the holiday rush matters and eBay Now offers a convenient way for consumers to get whatever they need and love this holiday season delivered to them anywhere in about an hour. eBay Now is available in the San Francisco Bay Area, San Jose, New York and Chicago, with a launch in Dallas coming soon.”
The eBay Now website now displays the following message:
“We have retired the eBay Now same-day and scheduled delivery service in the U.S., including the eBay Brooklyn pilot program.
“Thank you to everyone who participated in buying and selling as part of these programs. eBay continues to explore innovative pick-up/drop-off and delivery programs in the U.S. and around the world. In-store pickup items from a variety of sellers can still be found in our main search experience using filters in the left navigation on the web or using the “Nearby” filter on the mobile app.
“All open eBay Now orders have been delivered. Orders are no longer eligible for return.”
Logistics is extremely difficult, even for a marketplace like Amazon that’s been doing it for decades. On a recent Reddit thread, holiday shoppers were railing against Amazon for advertising a certain delivery date and then continually changing the date until it was too late to order elsewhere in order to arrive before Christmas.
Despite the challenges, logistics may be impossible to ignore for companies seeking revenue growth, and at the same time trying to make their sites attractive to shoppers looking for fast, reliable delivery.
The flip side to Amazon FBA fulfillment services for sellers is Amazon Prime for buyers – a free-shipping membership program. Online marketplace Etsy doesn’t offer seller logistics services, but it does have a membership loyalty program that offers free-shipping benefits.
Should eBay stick to its knitting, or is there an opportunity for it to provide logistics or shipping programs?
A small eBay seller had published his reaction to news of eBay Managed Delivery on the following YouTube video in July 2019, also serving a reminder that Walmart had yet to launch its fulfillment service, which it did in early 2020:
LOL, you got to be kidding me.
Lets looks at eBay’s incompetent update of their site when USPS introduced Ground Advantage in July of 2023.
Previously you could set individual preferences for each carrier (UPS, FedEx and USPS) and charge either commercial or retail rates for each service. But after that update they did away this and forced you use commercial rates or retail rates for all the carriers. They refused to fix this for over a year.
Prior to the July 2023 update you could set your USPS carrier discounts to charge retail rates, but then choose Parcel Select on individual listings to charge the commercial rate on that listing only. You could also do the opposite and set your carrier discounts for USPS to charge commercial rates, but choose USPS Retail Ground on individual listings to charge a retail rate on those listings.
eBay refuses to fix that. The typical setup on eBay involving small items involves charging the retail rate, while paying the commercial rate, with the difference paying for the FVF on shipping. That setup means you never have to edit your unsold listings when rates go up.
That setup will not work for large items sent via USPS as the difference between commercial and retail rates are too much. The retail is so high no buyer is willing to pay it. In that case you charge USPS commercial rates on large items. You calculate the highest possible commercial rate and increase the price of your item by 15% of the highest possible commercial rate to account for potential FVF on the shipping.
But now that eBay has prevented you from listing items with both USPS commercial and retail rates at the same time you cannot list larger sized items and smaller sized items at the same time. Other shipping options for the larger items such as FedEx and UPS are also not an option as they are even more expensive.
Take for instance a current item I have that occupies a 25 x 23 x 5 pound box at 12 pounds. Ground Advantage Calculated Commercial rates range from $20.93 to $42.90 for all 50 States. UPS is higher in all area except local areas and can range as high as $124.71. FedEx is higher for all areas and can range as high as $169.
But I can’t display those commercial rates on my listing as all my small items needs to use Ground Advantage Calculated Retail rates. So that means listing no large items while small items are listed and since most of my items are small that means listings no large items.
The morons at eBay suggest using flat rate, which is not going to work as that means charging the maximum possible shipping charge to everyone no matter where they live. They also suggest freight, which would cost hundreds to thousands of dollars. Many freight companies would not even bother to pick items up at your home unless you have a loading dock.
So why would eBay remove such a useful thing form their site? Is it because they want to try to force flat and free shipping onto sellers, which does nothing more than rip off buyers and sellers. A way to force sellers into putting commercial rates on all their items, which of course is not an option as I will not be calculating the maximum possible shipping rate of hundreds of items and increasing the price of the item by 15% of this maximum shipping amount. Then doing it all over again when rates go up.
Or is eBay just that incompetent? Based on their multiple other scams on their users over the years I say the later.