Tuesday, March 29, 2011

Fulfillment by eBay? eBay to Acquire GSI Commerce for $2.4 Billion

In a move that is being spun by many as an attempt to get more competitive with amazon.com, eBay is acquiring GSI commerce for $2.4 billion.

GSI Commerce, according to their web site, helps "companies of all sizes" to "help deliver an exceptional and engaging e-commerce shopping experience to their customers." Those companies of all sizes include the fairly large retailers Toys R Us, Aeropostale, American Eagle Outfitters, and Bath & Body Works.

"The number of retailers, large and small, that have come to us saying 'We are grappling with how you deal with mobile commerce, we are grappling with how to deal in a social-commerce world, we are grappling with how to go global' has been striking," said eBay Chief Executive John Donahoe to The Wall Street Journal.

Channel Advisor's David Spitz said, "EBay is clearly going on the offensive. This is definitely a step toward offering a broader array of services for the marketplace." EBay has a minority investment in ChannelAdvisor. (Read the whole Journal article at at: http://online.wsj.com/article/SB10001424052748704471904576228532935603752.html#ixzz1I1z4vzj8)

My take on the acquisition? It seems to me (granted, not a financial analyst...just a longtime eBay seller) that it does seem a reaction specifically to amazon.com's FBA, or Fulfillment by Amazon, program, which many eBay sellers have flocked to. As far as I know, they have not used it *instead of* eBay, but *in addition to*.

I use FBA myself, and it has boosted my amazon sales a good deal, in addition to allowed me to clear unmanageable amounts of inventory -- mostly books, but also CDs, games, DVDs, etc. -- out of my house.

I'm trying to wrap my brain around eBay having a similar "fulfillment by" program. Will it only be offered to high-volume sellers, professional retailer sellers, top-rated sellers, or some combination thereof? Would I ship off a huge box of, say, golf shirts, for them to fulfill for me via some kind of eBay "Prime" shipping service for buyers? Would the shipping cost be low enough to make it worth it for me?

It may be a good thing if it takes a load off sellers at a feasible cost, and makes buyers happier. eBay is still my go-to place for the unique, special, quirky..and the high-dollar value...such as a very special, collectible book that requires photos from many angles and very detailed description.

I hope that in becoming more like amazon, eBay does not cannibalize what makes it special.

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