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eBay will test a fulfillment service offering for its merchants in a move that pits it against Amazon.com's FBA service. And while many industry observers had expected eBay to use its recent acquisition of GSI Commerce to test the fulfillment waters, eBay spokesperson Johnna Hoff told AuctionBytes on Wednesday that the new fulfillment service was separate from GSI.

Hoff did not know how long eBay had been planning a fulfillment service, but AuctionBytes wrote about surveys eBay conducted in 2009 and again last year to measure sellers' interest a fulfillment service where they could send inventory to eBay distribution centers and have the marketplace pack and ship orders to customers.

Most details about eBay's forthcoming fulfillment service were unavailable, such as branding and pricing. "It's too early for specifics," Hoff said. eBay is evaluating and testing how it can facilitate fulfillment, shipping and delivery, she said - "this is an end-to-end fulfillment service."

The pilot will include two tests for eBay.com sellers - one for a limited number of domestic sellers, and another test for China-based sellers who ship into the U.S.

The top three concerns eBay has heard from buyers is price, trust and shipping, Hoff said. Over the past 18 months, eBay has made improvements to deliver best experiences with a special focus on shipping, she said - eBay sees the fulfillment service as an opportunity for fast delivery, too.

Hoff said the main reason eBay was including Chinese sellers was due to the lengthy shipping time - it currently takes an average of 18 days to deliver from China to the United States. eBay is striving to provide a better buyer experience as well as a better seller experience, she said.

While it was too early to talk about how the pricing structure would compare with other fulfillment services, Hoff said eBay recognizes that maximizing merchant margins is important. "Our goal is to deliver cost-effective services compared to other services."

Would eBay buy, lease or outsource fulfillment operations? It's too early to determine, Hoff said.

When asked if eBay had a goal for what percentage of units sold it wanted to come from its own fulfillment centers, Hoff said eBay is now focused on how the service benefits sellers and helps them offer the best shipping experience, making sure buyers are getting their items quickly and at a low cost.

The initial pilot is in the U.S. only, and, "based on our learnings, we'll consider other locations," she said.

Amazon.com has continued to expand its network of distribution centers for both its own product fulfillment and for its Fulfillment by Amazon (FBA) service - this page shows centers in the U.S., Europe, China and Japan. Its FBA service is attractive to sellers because items fulfilled by Amazon receive greater exposure on the site and qualify for Amazon's shipping programs, including Prime.

When asked how eBay would handle shipping time and shipping cost DSRs for sellers using eBay's fulfillment service, Hoff said there are discussions about how eBay would handle it. "You've seen us roll out automatic 5-stars for free shipping," for example.

John Lindberg, President of eFulfillment Service, a fulfillment service that manages 54,000 SKUs for 400 clients who send anywhere from 20 orders a month to 2,000 orders a month, said offering fulfillment makes sense for eBay. On their own, most sellers can't qualify for shipping discounts and often pay $20/week for daily pickup from UPS and FedEx. Overseas suppliers can save money through international "zone skipping."

With a fulfillment service, if eBay passes along cost savings to merchants, it can offer lower cost shipping and faster delivery.

Comment on the AuctionBytes Blog.

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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