|Sun Aug 5 2012 16:53:22|
eBay Now Same-Day Shipping Cannibalizes Marketplace Listings
By: Ina Steiner
eBay is testing a new same-day shipping service called eBay Now. A consultant's tweet this morning about a new eBay service in San Francisco was picked up by the TechCrunch blog, which published the letter eBay sent to Rakesh Agrawal.
How could eBay promise same-day shipping for items from its millions of sellers? The answer is, of course, that it can't. The new "eBay Now" service offers items from local stores, and while its letter did not say so, eBay is most likely working only with chains such as Best Buy and Toys R Us to power the new same-day delivery service.
Confused? Take a look at eBay.com/local. A search for "iPhone" in my area shows results from Best Buy and Radio Shack.
The service is powered by Milo, which eBay acquired, and provides real-time inventory and pricing information from 50,000 offline retailers such as Home Depot, Lowes, Target, Best Buy, Barnes & Noble and other large retail chains. eBay announced last year that smaller retailers could also upload their inventory onto Milo and eBay using a new inventory management plug-in for QuickBooks.
Why would eBay send shoppers on its marketplace to local retailers? Because eBay wants the inventory and customer experience that large chains can provide, and so it can get those retailers to use eBay and PayPal. That's why it acquired another company called GSI Commerce, which powers sites like Toys R Us.
But sending shoppers away from the eBay Marketplace obviously cannibalizes sales from longtime eBay sellers. For many online-only merchants, Amazon - through its FBA fulfillment service - may be the only way they get close to offering near same-day delivery to shoppers.
Update: See Monday's EcommerceBytes Newsflash for new information and details.