In most markets, eBay is a third-party marketplace, meaning that unlike Amazon, it doesn't own any the goods for sale on its site. That means eBay is at the mercy of sellers as to what's for sale on its marketplace and at what price, and with which policies.
However, eBay has gotten a taste of what it's like to operate as a first-party marketplace. In Korea, eBay uses its scale to buy consumer staples at a discount to resell on its marketplace to get people coming back. It's a perfect testing ground where it can learn about the benefits and challenges of being a retailer.
In other markets, eBay is forced to use other strategies to try and control aspects of its marketplace, such as implementing policies and fees that coerce sellers into certain behaviors such as offering free shipping and generous returns policies, or listing in fixed-price versus auction format.
It has also begun offering personalized advice to sellers about what products they should be listing and at what price through its Selling Guidance Delivery Platform that uses machine learning algorithms. Sellers got a chance to see how well the "Sherpa" technology worked when eBay sent them personalized lists of items along with the offer of a 25% fee discount if the seller successfully sold such items at or below prices set by eBay. You can read sellers' reaction on the
EcommerceBytes Blog
eBay has been courting brands to the site, and it also works closely with "diamond" and other select sellers to be able to offer a steady stream of clothing, electronics, and household goods at discount prices that offer free shipping, such as the "deals" that are heavily promoted on the eBay site and through marketing emails.
While eBay doesn't own the merchandise advertised in eBay Deals, you might not know it from the marketing messages, such as the one currently displayed at the top of the eBay home page: "Free Shipping Is Always Part of the Deal. Not to mention the best prices - guaranteed" - with a link to "eBay Deals."
Another way to control what's for sale on its site is through its Asian export business. It's easy to imagine eBay offering detailed guidance to Asian manufacturers about what to sell and how to sell it as it helps them export their goods around the world.
That assistance raises the ire of domestic sellers, which could be one of the reasons why eBay CEO Devin Wenig participated in a PR event on Friday promoting the marketplace as a way to help small businesses in Ohio export products to the global marketplace through a pilot program called Retail Revival:
"In partnership with the City of Akron, eBay will select 20-40 local businesses to participate in the program for 2018. Those businesses will receive exclusive support and resources to help them get started selling on the eBay platform including a comprehensive training program that will teach the eBay selling basics, a dedicated customer service support team to answer any questions the new sellers may have, a complimentary eBay store subscription, and an eBay selling starter kit. Akron or Warren, OH based businesses interested in participating in the program can apply by visiting and filling out a submission form by Friday, February 9 at 11:59PM ET."
While it could help with eBay's image among politicians and lawmakers, its base of sellers may not be pleased to learn that they must deal with new set of rivals - this time not from Asia, but from domestic sellers who are getting favored treatment - possibly including advantaged search placement.
eBay has not signaled that it will take on the role of retailer outside of Korea, but in some ways it has blurred the lines, gaining the benefit of having greater control over the inventory on its marketplace without the risks of actually owning it.
eBay Tries Its Hand as a Retailer
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