How eBay are innovating with Posts

Angeline Foong, Country Product Manager, eBay UK, writes for World Mail Review on her company’s collaboration with the Posts. About eBay

Since its conception in 1995, eBay has grown from a small auction website to a multi billion dollar business with over 13,000 employees. One of the fastest growing companies of all time, it faces the challenge of being relevant to each of its 120 million members, from the baseball card collector in Boston to the exporter in Hong Kong and to the retailer in London. All are valued members but they have very different requirements of the eBay platform.

Although it facilitates millions of dollars worth of trade, eBay is purely a marketplace, not a retailer. But it does represent thousands of individuals and businesses who wish to interact in commerce.

The importance of postal services for the eBay marketplace

eBay cannot be a success in any country without a reliable, cost effective postal service. Postal partners have played a key role in helping eBay better serve our community, by creating easier ways to purchase postage, simplifying pricing,  and offering discounts for valued sellers. As an example, one in every five visitors to a UK Royal Mail post office is there for eBay related reasons, so it is understandable how the futures of both eBay and its postal partners are intertwined.

For our sellers arranging the packaging and postage of an item requires significant effort. Research tells us that sellers see this task as one of their most complex and time consuming. Various entrepreneurs have moved to profit from this opportunity, with some of our own community shifting their business model to selling packaging materials on eBay. At the time of writing there were 2,492 listings for bubble wrap on the UK site alone!

How eBay has innovated with postal carriers

Various eBay countries have partnered with their postal carriers to reduce the delivery burden for sellers. Innovations include:

Enabling sellers to print postage labels in their home or office

eBay has partnered with USPS, Royal Mail, Canada Post, Deutsche Post/DHL, Hermes and La Poste to enable sellers to purchase and print postage labels online. The application is also integrated into the sellers’  eBay accounts , providing a seamless service and simplifying accounting.

In some countries the system will print out the appropriate customs form and allow premium collections to be booked. Sellers can also pay for the postage using their PayPal account – where many of them receive their eBay payments- assisting with cashflow management.

The creation of seller discounts based on eBay standing

Last year An Post and eBay Ireland developed an exclusive ‘e-parcel’ discount card for valued eBay members. If a seller meets specific eBay based criteria he or she is able to apply for a card which provides up to 70% off various postal services. As can be imagined, it has been very well received by the eBay community. It also provides a source of valuable foot traffic to An Post offices.

Co-Branded packaging

USPS made available free co-branded boxes which are available to all US eBay sellers. The boxes have been released in six different sizes, two of which offer flat rate postage regardless of weight or destination. This initiative has proved so successful that USPS offers a free service not only to deliver the packaging,  but also to pick up the filled boxes from the sellers’ premises.

Joint Marketing campaigns

Royal Mail has joined forces with eBay UK to incentivise eBay business activity via a package of tailored mailing contracts and free listings. Canada Post has worked with eBay to produce joint above and below the line marketing promotions to boost postal volume. Both of these initiatives benefit eBay and the postal partner by stimulating brand awareness and volume whilst providing a valuable offering for sellers.

The feedback system and its relevance to the postal industry

eBay’s transactions are based on trust between the seller and the buyer. The uninitiated may be surprised to learn that a buyer will send money to a seller whom he or she has never met, yet millions of transactions are successfully completed each year.

However, to highlight the best sellers and to help buyers get a sense of a seller’s reliability, a ‘feedback’ system was developed, where a buyer is able to leave a rating for a seller after each transaction. On an anonymous basis the buyer is asked to give the seller a rating on four factors which include despatch time and postage and packaging charges.

To reward sellers who provide great service, eBay offers heavy discounts to those who perform well on these ratings, with up to 40% off their final value fees. As a result of this initiative, there is a significant incentive for sellers to focus on their delivery performance and cost. The products and advice that local postal services offer can greatly assist sellers to perform strongly in these ratings and in this way enhance their profitability.

How the postal industry can benefit from the growth of eBay

In Quarter 4 2007, eBay marketplaces generated US$1.5 billon in revenues, representing 21% year on year growth. eBay was the number one E-commerce site in the US, UK and Germany over the Christmas holiday season.

Despite this impressive growth our sellers still have a range of packaging and delivery pain points. The postal industry can play a valuable role by innovating and resolving some of these market inefficiencies. If they succeed, the potential rewards are significant.

Here are some areas that interest our community:

Cheaper trackable postal services. Our sellers repeatedly ask for services that provide a tracking status without the cost premium of an expedited delivery time.

Postal insurance, particularly for high value categories.

Cheaper courier services.

Packaging materials.

Listing software to print invoices and labels.

eBay’s success over the last 12 years has been supported by strong local postal carriers. We have high expectations for our future growth and believe our best days are yet to come. We hope that the postal industry will continue to innovate and to simplify the postal process for our sellers; and that we can both experience solid growth in 2008 and beyond.