eBay news roundup – cross border trade, collectibles vs. SR1, payments news

March 15, 2012

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

Phew, things are super-fly busy here @ChannelAdvisor and I haven’t had much time to blog lately, so thought it was time for a look at some news in the eBay World.  As usual, we keep a very close eye  Topics include Cross-Border-Trade, SR1, and mobile payments!

Is eBay going to start reshipping for CBT?

eBay has a new President of marketplaces, Devin Wenig (from Reuters) (DW for short) who has been at the  helm for about 6 months now and laid pretty low.  In the last week he has started to come out as a spokesperson for the marketplace and made an appearance at two events:

In the Wall St talk, he was a lot more open and perhaps let a new CBT initiative slip or maybe we call it a soft announcement.  One of the challenges with CBT is you have to be at a pretty large scale and sophistication from a shipping perspective to be able to reliably ship outside of the US.

There is a class of solution that solves this challenge by utilizing a concept called reshipping.  The way it works from the buyer’s side:

  • Buyer finds item and selects international shipment.
  • They are given a  quote that includes tarrifs, taxes, duties and shipping costs.
  • They purchase and receive the item.

Another model is similar, but buyer is given a temporary US shipping address that they use in the checkout and then a separate site gives cost information.

The way it works for a seller:

  • They ship the package to a US-based reshipper address
  • The reshipper then has a warehouse where they receive the package
  • The package is then shipped out using the reshippers more complex and aggregated shipping capabilities to the ultimate destination.
  • Sometimes in the middle there the reshipper will combine shipments to get some cost savings.  For example, if you have 10 packages going to Munich, Germany and you consolidate them, the cost savings can be as high as 50% or more.

With that background, in his BofA talk, DW said: “We will soon launch global returns and shipping.  For example, I can sell to anyone globally and ship to a local address.  Then eBay will handle it from the US to the UK and handle all the returns.”

Based on my knowledge of how these things work, it sure sounds like eBay is getting in the game.  This will be interesting news for companies such as Bongo and FiftyOne that do this as their sole focus.

It will be interesting to see if eBay can pull this off as they aren’t really in the business of touching packages and there’s quite a lot that can be hard to ‘get right’ in this model.  For example, what tracking number does the consumer get? What are the service levels?  How do you handle the fact that a lot of eBay non-domestic buyers expect there to be no tariffs/taxes/duties?

Amazon is getting active in this space as well, check out a post soon at sister site Amazon Strategies for details on that.

SR1 collateral damage – collectibles

On Feb 28, 2012, eBay announced their first major update of 2012, seller release 1 or SR 12.1.  There’s been tons of coverage on the topic and details on the implications, so I won’t go into that here.  You can check the original announcement here.  The changes are all about improving the buyer experience which generally is smart and in today’s competitive World that eBay finds itself in, it’s really table stakes.

One of the big changes is that eBay has introduced a new requirement for the Top Rated Seller discount that sellers have to provide tracking information on 90% of their items.  From a buyer perspective this seems like a win – it’s always great to know where your package is.  The problem comes for sellers – all shipping options that includes tracking are substantially more expensive than those that do not.

One category that is really going to bear the brunt of this change is the collectibles.   A lot of folks scoff at the collectible category, but it’s a $705m/Q category for eBay or a $2.1b/yr category growing at 13% y/y.  Collectibles is also the founding category of eBay – think of Pierre and his Pez collection!

I’m not an expert in the category and can’t give justice to the challenges these sellers face, so shortly we’ll be featuring a guest blog from someone on the topic.

This example illustrates how tough it is for eBay to apply across-all-category changes because frequently someone takes it in the chin.

Payments update

There’s a ton of action in the payments space that I think it’s important for retailers of all sizes to track.  Here are the top stories:

  1. PayPal expands their POS test with Home depot – HD is reportedly rolling this out nationwide, a clear sign they are very happy with the pilot program.
  2. PayPal to compete with Square with a….Triangle? – At SXSW this week, Sam Shrauger, PayPal’s VP of product announced that the PayPal wallet will launch in May.  It will feature a complete refresh of PayPal.com (the first in 13yrs evidently!).  In San Francisco today, they are announcing something that will help very small merchants.  Rumors are it’s a Square competitor, in the form of a Triangle.  It will be interesting to see if they can catch up to Square as that company is on a real tear.
  3. Mobile payments – Walmart and Target recently announced the are collaborating with a bunch of other undisclosed retailers (probably does not include Home Depot) on a retailer-driven mobile offering.  Details were not available.  In my recent mobile payments piece I was wondering if a retailer-driven solution would have the most leverage.  It looks like we’ll see here shortly.  Think about how successful Starbucks has been with their initiative before you write this off – retailers are closest to the consumer.

SeekingAlpha Disclosure – I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.