eBay's Amazon Prime-Like Shipping Program to Launch in Germany This Month
NEW YORK (TheStreet) -- eBay (EBAY - Get Report) is getting ready to launch a new Amazon Prime-like expedited shipping program in Germany later this month.
Though an eBay spokesperson was loath to compare the company's new program to "that other e-commerce company's shipping/membership program," it's hard not to view the move as an attempt to catch up to Amazon's (AMZN - Get Report) success with Prime.
eBay Germany's new program, called eBay Plus, will cost 19.90 euros (about $22) a year and will allow buyers to receive certain orders within two days, plus free returns.
Top Sellers on eBay will be able to opt into the program as a way to get a boost in visibility, though they will bear the majority of the cost for the expedited shipping -- eBay is offering a 5% discount on its seller fees to eBay Plus merchants on top of the 10% discount that is extended to Top Sellers already. The annual fee paid to eBay will go towards these discounts it's offering to sellers.
"It's a partnership between eBay and our sellers to give buyers more of what they want -- free returns, shipping options, a more premium delivery experience," said Carl Gish, eBay's VP of shipping and delivery. Thousands of sellers have already signed up to be a part of eBay Plus, according to Gish.
TheStreet first reported eBay's new program in May, but the official rollout will begin during the second half of this month, a decade after Amazon first got into expedited shipping.
To be fair, eBay's model is inherently different from Amazon, and it's one that doesn't lend itself as easily to expedited shipping. As a pure marketplace, eBay relies on its sellers to handle logistics themselves, so any program it offers will have to count on sellers living up to their promises. Amazon, on the other hand, requires sellers to use its own fulfillment services to participate in Prime, so it has control over the whole process.
Because of that distinction, eBay can really only encourage its sellers to improve shipping times, and eBay Plus seems to be an attempt to do that.
"Amazon Prime has become a very broad program that is a key to Amazon's value to its customers and a great competitive advantage," Wedbush analyst Gil Luria said. "eBay has struggled to compete with these benefits because it can't control all of its sellers. In order to compete with Amazon, eBay has tried to prioritize sellers that had shorter shipping times and better return policies, but that is not as comprehensive an offering as Prime."
eBay has made some efforts to expedite shipping in the past, most significantly with its stake in Shoprunner, a $79-a-year service for unlimited free two-day shipping from a variety of online retailers. But eBay Plus is eBay's first independent foray into expedited shipping.
"The key for eBay will be to make sure their individual sellers comply in order to create a consistent customer experience," Luria said. Assuming eBay Plus sellers follow through on their commitment, this could be a significant value for consumers, who are increasingly caring more about shipping times.
And while Gish maintained that eBay was focusing solely on Germany at the moment -- "right now we have no plans to launch it outside of Germany" -- it wouldn't be hard to imagine a program like this expanding to other markets in the future.
"If eBay can make it work in one market it is very likely they would try to deploy the service across its other key markets, including the U.S.," Luria said.
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