GSP and FBA: How to Leverage EBay’s and Amazon’s Fulfillment Programs

March 12, 2015

Marketplaces Gary Yeoell By Gary Yeoell

2015 is the year of the global retailer. Experts have been predicting the boom for many years, and our two most popular marketplaces, eBay and Amazon, have been pioneering international selling programs for some time now. So how do you get in on the international action?

The theoretical leap into cross-border trade (CBT) is easy. You, the seller, have products to offer, and there’s a global community of hungry online consumers poised to purchase your wares. Everyone wins – right? But wait: How do they find your products? How do they know whether it’s what they want? How are you going to get it to them? What if they want to return it? These are all questions to answer before you can enter the world of CBT.

To help you tackle the logistical portions of your CBT quandary, eBay and Amazon each offer international fulfillment programs.

Global Shipping Program on EBay

The Global Shipping Program (GSP) on eBay allows a seller to offer products to international buyers without having to worry about international shipping, parcel tracking or customs charges. This is all calculated by eBay and displayed on the listing. The buyer pays any applicable fees and charges. All that you, the seller, pay for is a domestic shipping rate. EBay then completes the required logistics.

The immediate benefits: The program is free to sign up for, the hassle of international shipping is taken away and the service actually reduces your fees to eBay. Your final value fees are based on the product price and the domestic shipping rate only. Sometimes shipping logistics are out of your hands. So, if by chance the product is damaged or lost, your seller feedback is protected. GSP also allows sellers to be eligible for five-star ratings if certain criteria is met.

Finally, you’re in control of what products and countries you want to include in the program. Simply set your preferences and you’ll be ready to take the first step into CBT.

Fulfillment by Amazon

Amazon’s offering is slightly different in that Amazon takes control of the fulfillment process at a far earlier stage than eBay’s GSP does. Before we look at Fulfillment by Amazon (FBA), let’s take a step back and justify why you should choose FBA over fulfilling from your fully established warehousing and logistics system.

Amazon customers care far less about who is selling the product they’re purchasing and far more about how easy it is to buy and when it will arrive at their door. There are two characteristics that tend to set the winning product apart from the others: Buy Box ownership and fast shipping. So how do you increase your chances of winning that customer? Using FBA factors into the Buy Box algorithm, and the clearest way to advertise fast shipping is Amazon’s Prime service (which requires FBA to qualify). This is becoming a no-brainer!

What should you send to Amazon’s fulfillment centres? Certainly not your entire inventory. Slow-moving products sitting in FBA will cost you more than you’ll make back in sales, and so will big and bulky items. Select your best-selling products and send those to FBA, making sure that you constantly monitor fluctuations in your top products.

FBA can be used for domestic sales but is potentially more important for global sales. Amazon has multiple locations around the world, allowing you to strategically place your inventory close to customers, which will eliminate slow shipping times and unhappy customers. FBA’s benefits are especially noticeable for long-haul sales. Imagine converting your 7-to-10-day shipping time into same- or next-day delivery. FBA can make that possible.

The Bottom Line

GSP and FBA are two powerful acronyms that can aid your global expansion plans. Be sure to consider each offering carefully and keep a close eye on costs. Focusing on this will take much less effort than trying to juggle the entire cross-border sales process on your own.

If you’d like to learn more about both expanding internationally, you can download our Agile Cross-Border Trade eBook here.

 

Blog post by Gary Yeoell, account manager, EMEA, at ChannelAdvisor