on 08 Jun, 2015.
eBay is testing an Amazon Prime style model in Germany. Currently known as eBay+, this service promotes free, fast shipping and returns for customers, for somewhere in the region of £10 - £15.
As part of the development, eBay is promoting better product placement for seller’s merchandise, and discounts on selling fees, with a subsidy to help cut the cost of shipping and returns. From a seller’s perspective, there is a commitment for same day dispatch, and free returns within one month.
Amazon prime has been extremely successful since being implemented ten years ago. Most estimates indicate that there are around 40 million prime users paying approximately £60/year, with a plethora of add-ons such as streaming video and exclusive products.
The key difference here is that as a fulfilment provider, Amazon has complete control over the process, whereas eBay does not, hence the time it has taken eBay to add this service.
The attempt to mimic the service is testament to it’s success, and how much ground Amazon is gaining with so called ‘golden handcuffs’, as customers shop to make the most of the monthly fee. This is indicated by estimates that show that Prime customers spend roughly double that of non-prime customers.
This move also sparks a wider debate, which was outlined at Catalyst 2015, of convenience vs value. There is a distinct possibility that Prime represents the convenience market, and eBay is typically closer to the value market, as outlined by Devin Wenig, eBay CEO:
“Whether or not our customers want a shipping program remains to be seen. Ebay customers require efficient shipping, but they care about the cost of shipping as much as the time is takes to arrive.”
This is all happening in the midst of the PayPal and eBay separation, therefore these are exciting times to keep an eye on one of the biggest players in the market.