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Amazon versus Ebay – who would you rather partner with?

Having recently come from the retail side of the world, I’ve been involved in a lot of debates around 3rd party marketplaces and the pros and cons of Amazon. Ebay never seemed to get its fair share of attention during these conversations, but that seems to be changing, and changing fast. E-commerce execs and marketing directors need to realize that ebay offers much the same opportunity, without the potential threat. If you haven’t already, I’d recommend anyone selling through marketplaces read this recent Internet Retailer article to get up to speed on what ebay is up to these days. As the article points out, ebay has become much more than an auction site.

How much do you know about how Amazon works? Consumers can buy new or used product direct from Amazon or from any number of 3rd party vendors selling through their platform. With Amazon, you lose most of the control you have over the customer. The only means you have to market to customers who have purchased through your marketplace on Amazon is through direct mail, which we all know is a very costly medium. So, in the long run, what typically happens? Amazon learns your industry by collecting data based on sales through your marketplace; what sells, what’s profitable, which products have the highest complaint rate, and they start to bring in the best performing products and compete based on the knowledge you’ve helped them gain. Plus, given their brand reach, their ability to buy with deep discounts and undercut price, there’s a good chance you’ll lose the customer to Amazon over time.
Ebay, on the other hand, does not sell products direct to consumer, but rather, provides the platform for 3rd party vendors to sell their new or used products.  Simply said, ebay supports people selling to people. Sure, they’re capturing data, but not with the intention of going head to head against your business. I’ve heard direct from John Donahoe’s mouth (ebay’s CEO) that ebay measures success based on how much revenue they enable businesses to generate. I’m sure they’re not entirely altruistic, but from a partnership perspective, they’re definitely doing some incredible things to help small, medium and large businesses innovate and I haven’t seen them cannibalize sales from merchants like I’ve seen happen with Amazon.
I visited ebay’s headquarters this past August to learn first-hand what’s coming in the next 18 months, and it’s exciting. They’ve already rolled out their “ebay Now” same-day delivery service in a handful of cities to go head to head with Amazon’s next day delivery. And to beef up their services, they’ve acquired a number of companies (i.e. Magento, Red Laser, Stub Hub, etc.) which have allowed them to integrate commerce with concepts like social check-in, red laser QR scanning and location based marketing at sports venues and the like. They’re in the process of integrating and rolling out technical solutions to deliver friction free commerce, regardless of channel. This short video doesn’t do it justice, but gives a glimpse into the type of power ebay will be offering businesses soon.
So what’s the point of all this? I’m not saying Amazon doesn’t offer opportunities, I’m just suggesting that ebay deserves a second look and I want to make sure you’re armed with information. If you have questions or want to share your opinion, I’d love to hear from you.

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Alex Morask

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