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17 July 2014

eBay Enterprise: high-end help with fulfilment

eBay has pulled together its wide-ranging systems and e-fulfilment capabilities under a single umbrella – but where is it heading?


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Last year a new organisation called eBay Enterprise sprang into existence. You’ve possibly heard of it, but may not be entirely clear about what it does or who it’s for.

Michael Kliger, the German-born managing director for the organisation’s EMEA region, sums up its function: "We’re hear to help our customers to create clicks, turn them into paid orders, and fulfil them."

That proposition is probably as interesting for what is missing as for what is there. It makes no overt mention of what eBay is still best known for – its consumer-to-consumer marketplace business.

This is because the parent organisation increasingly sees its future elsewhere. Whilst eBay will no doubt maintain a tenacious hold on its dominant presence in the C2C auction world, Kliger points out that the vast majority of products traded on its platform are now sold at a fixed price. Whilst he might not actually spell it out, if eBay is a marketplace at all, it’s becoming more like Amazon’s than like the original vision of a consumer auction site.

This change helps explain the nature of eBay Enterprise. It’s a business-to-business operation that has little or nothing to do with the traditional auction business. "Our target customers are large retailers and brands," Kliger says – though he keeps the door slightly open to other things by adding: "For now."

This means eBay is not jumping in to provide DIY fulfilment for small traders – something commentators have speculated over the years that it might eventually do. Paradoxically, that role has been grabbed by the likes of arch-rival Amazon, with its Fulfilment by Amazon business.

"We’re not about to dislodge fulfilment companies with a strong local base," Kliger says. "We’d be ten or fifteen years too late." Instead, he explains, eBay is offering key components of the order/fulfilment cycle for larger companies, integrating where required with existing suppliers. "The e-commerce world is getting increasingly multi-faceted," he says, "and we aim to reflect that."

The portfolio includes various acquired brands, some of which retain their existing names. There is eDialog for cross-channel marketing, Magento for front-end e-commerce web sites, and GSI Commerce for order management and physical fulfilment.

Kliger says the history of GSI, which is no longer a separate brand, sums up the current perspective. "It’s moved from monolithic to modular, integrating with products like ATG Web Commerce," he says, adding: "We’re talking about integration without changing platforms."

The GSI element of the company certainly has physical fulfilment centres, including one in the UK, which was originally developed by catalogue retailer N Brown under the Zendor brand. Kliger emphasises that these will be retained and expanded. "We already have warehouses in the UK, Germany, France, Italy and Russia," he says, "and a presence of some kind in fifteen European countries."

There are also four major fulfilment sites in the US, and there is warehousing in other overseas locations such as Shenzen in China.

However, the plan is not to rival major established fulfilment businesses. "We’re most comfortable talking to retailers who have a strong domestic fulfilment system in place," Kliger says, "but are struggling when it comes to delivering across borders."

With this type of business, eBay is happy to provides a hands-on fulfilment service. "In the end, someone has to move e-commerce products around, and having a physical presence on the ground is a real asset."

However, he says fulfilment is becoming increasingly sophisticated. "You have to be able to draw on stock in fulfilment centres, retail stores, suppliers and the B2B fulfilment stream. This is where technology is needed."

That perspective helps explain why eBay Enterprise’s technology offer includes niche products such as its Ship from Store system, which helps retailers fulfil e-commerce orders from retail outlets.

"Having distribution centres in every country is not the best option for some customers," Kliger says. "The issue is not just moving product at the cheapest rate, but finding smart solutions." He points out: "The actual cost of picking can be small compared with the cost of marketing or shipping."

Where traditional fulfilment businesses have sometimes created functional silos, Kliger sees eBay Enterprise working in what he terms "habitats" or "universes". He sums up: "Shipping and fulfilment remain key differentiators in e-commerce, and eBay has a key role to play."

 

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