eBay to launch end-to-end fulfillment service for sellers

Dive Brief:

EBay will launch a new service in 2020, called Managed Delivery, that will allow high-volume sellers to store, pack and deliver orders through a network of pre-approved third-party vendors, according to a press release. The program will allow "sellers to store inventory closer to buyers in strategically located warehouses across the country," thereby reducing delivery time and shipping costs.
The program will be managed via "a global technology platform and third party partners will run the operations," according to the release. EBay is working on a pilot version of the program "with several partners across the U.S." and will determine which ones to move forward with in the coming months before the program launches next year, according to its website.
"A common request we hear from our high-velocity sellers is to help make delivery of high-volume items easy and fast ... in popular categories like electronics, home and garden, and fashion," Devin Wenig, eBay president and CEO, said in the release. The boxes used to ship orders for sellers in the program will be eBay branded, and the orders inside will be trackable for buyers and sellers, he said.

Dive Insight:

The use of third parties enables eBay to connect online sellers to end-to-end solutions without requiring the marketplace to build a large-scale e-commerce fulfillment model from the ground up. EBay called Managed Delivery part of its "ongoing evolution to create a more managed marketplace," showing a move toward further control over supply chain services, a strategy Amazon has also used.

The release states eBay will "negotiate highly competitive rates" on one-, two- and three-day shipping options with third parties on eBay sellers' behalf. For smaller enterprises, this could also enable them to more easily and affordably offer free shipping, thereby attracting more customers. EBay has yet to release pricing information for the service.

E-commerce solutions firm Shopify has pursued a similar strategy, offering fulfillment services to its small to medium enterprise sellers via an online platform and a network of third-party vendors that includes warehousing and logistics offerings.

"As consumer expectations for both B2B and B2C are set by the biggest players in retail, small and mid-sized businesses are under more strain than ever," Patrick Cadic, vice president of sales and marketing at UPS fulfillment platform Ware2Go told Retail Dive in an interview. "Going forward, the leaders in this market will be those that give every business the independence to pave their own way."