eBay Australia is working with Australia Post-owned Fulfilio to help sellers fulfill orders faster. Is eBay beating Amazon at its own game in the last mile? Analysis from Ian Kerr (Postal Hub Podcast) and Marek Różycki (Last Mile Experts)
eBay might be seen as e-commerce’s sleeping giant in some parts of the world, but it’s a major player in Australian e-commerce – despite Amazon’s much-heralded arrival Down Under.
One area where Amazon is seen to be stronger than eBay is in the last mile. Amazon has Prime, parcel lockers, Flex, and its own fulfillment, logistics and delivery operations. eBay, by comparison, is playing catch-up.
Beefing up fulfillment
Last year, eBay launched its national Fulfilment Partner program in partnership with Australia Post-owned Fulfilio, providing eBay sellers with excellent prices for picking, packing and delivering their eBay orders.
Under the program, eBay sellers can leverage Fulfilio’s national warehousing and ‘pick and pack’ fulfillment services, with seamless distribution into Australia Post’s delivery network.
eBay Australia recently announced that its Fulfilment Partner Program has reduced end-to-end fulfillment and delivery times by 15% for participating sellers.
eBay’s partnership with Fulfilio has been a big boost for many eBay sellers in Australia, especially smaller players, according to Professional eBay Sellers Alliance (PeSA) Australia president Tim Davies.
“The speed and efficiency of a 3PL provider like Fulfilio is something only a handful of eBay sellers can achieve in their own operations,” he says. “Sellers now can offer their customers the same handling and delivery times as the largest eBay sellers, which is a huge competitive advantage.”
In 2017, eBay announced Guaranteed Delivery in the USA, offering a ‘three days or less’ delivery promise. The service was rolled out in Australia in 2018.
According to eBay, sellers that offered Guaranteed Delivery saw an average sales lift of 5-7% over non-Guaranteed Delivery sellers between May and August 2018.
This invites comparison with Amazon Prime’s delivery guarantee. We’ve previously written that eBay is the ‘sleeping giant’ in the last mile and while these moves do not yet mean that they have defeated Amazon in this space, they do suggest that they may have woken up.
The question now is how eBay can achieve the same level of control over its partners as Amazon does – and will it be as uncompromising when it comes to customer experience as Amazon is?
“I believe eBay is more strongly motivated than Amazon to continue to innovate across the entire fulfillment spectrum, not just with physical speed, but also with useful metrics, negotiated deals and best practices for sellers to delight buyers,” says Davies.
Same-day and next-day delivery
eBay sellers are also gaining a competitive edge with Fulfilio’s same-day and next-day delivery options.
“Fulfilio provides eBay sellers the ability to access the nation-wide next-day delivery service, and same-day in Melbourne and Sydney, with Brisbane to be added later this year,” Fulfilio co-founder and CEO Mathew Galt explains.
“The same-day delivery service leverages the Australia Post On-demand delivery fleet, with orders received by 2:00pm delivered before 9:00pm that night to residential addresses.”
Fulfilio’s network of fulfillment centers is critical to offering express delivery, as there are great distances between Australian cities. E-commerce retailers with only one warehouse serving the entire country simply can’t offer that level of service.
“Next-day delivery has been around for a long time between East coast capital cities, but even when sellers can dispatch orders same day on standard delivery services, it is still more typically two to three business days delivery to the customer,” says PeSA Australia’s Davies.
Unlike Amazon, eBay relies on the customer experience its sellers provide. Compare that with Amazon Prime, where everything from fulfillment to delivery is usually overseen by Amazon.
Amazon raised the bar in terms of customer experience, and eBay is now responding to that challenge. The Guaranteed Delivery program and improved fulfillment has resulted in improved delivery times, but there is still more to be done.
The question now is whether eBay and its partners are willing to reduce margins and even subsidise services such as next day in the interests of beating Amazon at their own game and taking the lead in customer experience (CX) leadership.
But CX is also about infrastructure. eBay offers click-and-collect via PUDO network ParcelPoint and supermarket chain Woolworths – in addition to using Australia Post’s nationwide parcel delivery services, its 4,356 retail outlets, and its growing network of parcel lockers.
Another important move by eBay was its launch of loyalty program eBay Plus last year, giving members unlimited delivery and returns for an annual A$49 (US$34) fee, and access to exclusive deals, among other perks. Plus is seen to be eBay’s answer to Amazon Prime.
So it looks like in Australia eBay is nudging ahead of Amazon in the last mile. But can it maintain its position? Amazon may have started with just one fulfillment center for the whole nation when it launched, but as it grows and gets closer to customers, we can expect to see faster delivery and better CX. That’s when we’ll see a real battle between these two e-commerce giants in the last mile.
Certainly it’s a situation worth keeping an eye on – and we’ll see if eBay learns lessons Down Under that give it and its sellers an edge in other markets around the world.
Ian Kerr is the founder and host of the Postal Hub Podcast, the weekly podcast for the postal and delivery sectors.
Marek Różycki is managing partner at Last Mile Experts, specializing in CEP and e-commerce last-mile advisory.