Retail

EBay has “all the pieces” to compete with Amazon thanks to new fulfilment services revealed this week

Dominic Powell /

eBay

Source: Tim Goode/PA Wire

Online marketplace company eBay has announced a new integrated fulfilment and logistics service aimed at SMEs, coming in all guns blazing in its ongoing fight against retail giant Amazon.

The tech giant has partnered with Australia Post and startup Fulfilio — which is fully backed by Australia Post — to provide integrated delivery services to businesses selling via eBay, which it claims will cut the cost of deliveries for businesses by 30%.

Businesses that sign up to eBay’s new fulfilment service will be offered parcel rates as low as $5.74 for same-city service and $6.83 for interstate service, which includes coverage across all steps of the supply chain: pick, pack, and delivery.

SMEs will send their inventory to one of Fulfilio/Australia Post’s warehouses in Sydney, Melbourne, Brisbane, or Perth, where deliveries will be automatically organised and sent. According to eBay, sellers will have access to over 57,000 square metres of warehousing space.

This service is the latest in a flurry of offerings established by eBay in the last 12 months, including eBay Plus, the company’s new price match service, and the announcement of a new ‘Black Friday-esque’ cyber sale for the company’s Plus customers.

It’s a clear signal that competition is heating up among marketplaces in the online retail space since the launch of Amazon Australia late last year. For a long time, eBay has been the go-to for small businesses wanting to sell online, but Amazon’s arrival has started to draw sellers away to retail’s new hotness.

Speaking to SmartCompany at the start of this month, retail analyst and industry expert Scott Kilmartin said eBay’s slew of new offerings were impressive but had the potential to be too little too late. Today, in wake of the new fulfilment announcement, Kilmartin says this is exactly the step eBay needed to take.

“All of a sudden, eBay — which had been in a bit of a lax state — now looks like a really rejuvenated brand,” Kilmartin says.

Kilmartin had posited that the main drawback for sellers tossing up between Amazon and eBay was the latter’s lack of a holistic logistics and warehousing solution. The partnership with Australia Post, the country’s largest delivery service, looks like it might have solved those issues.

“It’s not a huge headline-grabber, but not having warehousing was definitely eBay’s Achilles heel so this will have an ongoing impact for the company and SMEs perceptions of it,” he says.

“If you’re a growing business and you can have a one-stop shop for selling, delivery, and payment it becomes much more hassle-free, and you can take care of signing up customers and growing your sales.”

EBay with “all the pieces” it needs to compete

EBay now has “all the pieces of LEGO” it needs to build itself as a fully-fledged Amazon competitor in Australia, says Kilmartin, who is keenly watching how both eBay and Amazon will continue to roll out their logistics services, with Amazon being a bit of a “slow moving train” in this respect, he says.

For businesses in Australia making a choice between the two online retail options, this will likely make eBay a much more attractive option, but Kilmartin says the younger, fresher businesses are likely to still look to Amazon.

Despite that, he believes eBay is well on the right track and has seen significant success in what he believes to be a full “brand revival” process.

“All the little innovations and iterations coming in over the last year really helped to get people to re-look at eBay as both customers and sellers. People used to not see eBay as appealing, not as somewhere where they wanted to see their brand, but that’s an old perception now,” he says.

“They’ve been doing a lot of work, and all power to them. It’s phenomenal to do all of this in just one year.”

NOW READ: Why this small business owner is considering leaving Amazon Australia: “It’s just all fizz and no substance”

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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