|Mon Dec 3 2012 13:43:11|
eBay Lacks Expertise to Succeed in Same-Day Delivery
By: Ina Steiner
eBay is running a test of same-day delivery, but it's not using eBay sellers to source the goods. Instead, eBay pays couriers $12.50 per hour, plus 55 cents per mile driven, to purchase goods from local stores such as Macy's and then deliver them to customers. (This may be more than some eBay sellers earn an hour, I can hear some of you thinking.)
Today's Wall Street Journal says the service, called eBay Now, is available in San Francisco (launched in August) and New York (launched in November) and is available only through an iPhone app.
Here's what eBay Marketplaces President Devin Wenig told the Journal, "There's a lot of inventory that's close to customers, in stores and warehouses, but the link through delivery hasn't really been cracked yet. This is an experiment to determine if we can cement eBay into local markets by handling all aspects of commerce."
As the article points out, Amazon has offered same-day delivery since 2009 in 10 cities including Seattle, Indianapolis and Boston, and notes that Google and Walmart are also testing same-day delivery services.
To operate such a service without bleeding dollars requires logistics expertise that eBay lacks. Amazon and Walmart, which uses UPS and other services rather than hiring couriers of its own (which seems like a very Web 1.0 idea on eBay's part), both have experience running supply chains and know how to maximize operational efficiencies to slash costs.
Same-day delivery reminds me of another craze ecommerce giants are taking a crack at, "package pickup" delivery lockers, which paid off last week for a Canadian company called BufferBox when Google acquired it for what might be upwards of $17 million.
The question comes down to who is paying for enhanced delivery services? Customers demand free shipping and retail margins are tight. Whoever runs the tightest ship will likely win - if demand for such services truly exist on a wide scale.
Update: Time's Harry McCracken's take on eBay Now.