Gloves Off Between The Two Goliaths – Ebay Bans FBA

With the launch of Amazon in Australia expected to take flight amongst Australian customers as it ramps up its offering, Ebay is currently still holding the dominant spot when it comes to our online retail market – and it isn’t looking to lose its position. 

An Australian reader sent this to Seller Café early this week, which they received from Ebay Australia:

“We don’t allow third party fulfilment in situations where it could be confusing for eBay customers – such as when an order is sent by another retailer or marketplace. 

Third party fulfilment means sending your inventory to someone else to prepare and send your orders for you and can include logistics and services such as inventory storage, handling, packing, postage and customer service.

We don’t allow third party fulfilment in situations where it could be confusing for eBay customers – such as when an order is sent by another retailer or marketplace.”

With Amazon’s launch of its logistics business Fulfilment by Amazon (FBA) in Australia last week, one may be forgiven for assuming that Ebay Australia has reacted to this. A quick squizz of Ebay’s overseas marketplaces both in the US and UK hadn’t found similar policies, and while Ebay Australia doesn’t specifically mention Amazon, how many other marketplaces are there in Australia and retailers that also have a fulfilment centre locally?

While concerns over Ebay sellers using Amazon’s FBA to ship items sold on Ebay have been of concern in other countries, banning FBA it has never made it into its formal policies, so this would be the first time.

In an interview with Sydney Morning Herald, Ebay’s chief Tim McKinnon spoke candidly about how retailers believe that Amazon is not to be trusted.

“What I hear from Australian retailers, and I talk to a lot of Australian sellers, is they worry about the effect that Amazon might have on their business,” McKinnon told SMH that day after he was appointed as Ebay Australia’s new chief executive officer in November 2017.

“While some of them are considering selling on Amazon, they don’t completely trust Amazon – they worry about the way that Amazon might use their sales history and buy items themselves.”

It’s no secret that in other markets where Amazon operates it’s known to use seller data to further its own retail channel. However, Ebay may want to be mindful that retailers will be using other sales channels as part of their strategy, and even if they use Amazon FBA to ship their goods, Ebay will still make a percentage on that sale.

Jason Kencevski, chief executive of online retailer Speedmaster, told Power Retail he concurs that Amazon isn’t to be trusted, however also acknowledges that companies must learn to coexist, advising retailers, in general, to stay on guard with their strategies.

“There is no doubt there will be the similar rebound effect in Australia as there was in the USA, which was a gradual but sharp effect, unlike a new brand or company, which takes time to gain momentum. In the end, companies and brands must learn to coexist by finding a strong competitive advantage,” he says. “I would highly recommend not falling asleep at the wheel and if you are looking back in the rear-vision mirror for old answers to new problems then you’re obviously not looking forward,” adds Kencevski.

“At Speedmaster, we put many pillars in place not only to protect our brand but all our resellers of the products. Work out a strategy, as one thing we learnt the hard way is that: AMAZON DO NOT PLAY FAIR!”

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