EBay Teams Up With FedEx on Shipping to Compete With Amazon

EBay Inc. (EBAY), owner of the world’s largest online marketplace, is joining with FedEx Corp. (FDX) to offer shipping discounts and label printing as the company competes with Amazon.com Inc. (AMZN)’s vast delivery network.

EBay merchants will be able to print FedEx labels at home and ship at a discount of as much as 37 percent, said Carl Gish, EBay’s vice president of shipping. The San Jose, California- based company is also adding tracking and duty estimates to international orders through a partnership with Pitney Bowes Inc. (PBI), he said.

The FedEx accord comes in time for the holiday season and builds on other upgrades from the e-commerce company such as EBay Now, a same-day delivery service that helps local stores get goods to consumers. Online retailers are chasing Amazon’s Prime program, which costs $79 a year and offers free two-day delivery, making fast shipping the industry standard.

“We’ve been asking sellers to meet buyer expectations of free shipping and tracking,” Gish said in an interview. “It’s something our sellers have been asking for for a while, given that we have USPS and UPS. FedEx, as a major player in that space, is clearly a great partner for both our buyers and sellers.”

The Internet retailer is rolling out the program in the coming months. EBay already lets sellers print labels for packages sent via the U.S. Postal Service and United Parcel Service Inc. (UPS) Sellers could choose FedEx as a shipping option before now, though they had to go to a physical store to print labels, which meant the service often wasn’t used, Gish said. Merchants will still have to travel to a FedEx store to mail the final product, according to Johnna Hoff, an EBay spokeswoman.

Free Shipping

EBay merchants have increasingly added free shipping for buyers, with 50 percent of transactions including the option in the third quarter, compared with 39 percent in the same period last year.

More than 40 percent of EBay sellers in the U.S. use its label-printing services already, Hoff said. While Amazon offers some shipping services, EBay doesn’t pay for any of its sellers’ shipping. The discount FedEx is offering will be offset by the rise in merchants choosing it as a carrier, Gish said.

“One of the things EBay brings to our partners is scale,” he said. “We’re able to leverage that scale as we negotiate. FedEx is able to do things with us that they wouldn’t be able to do with other, smaller companies.”

EBay is also teaming up with Pitney Bowes, a Stamford, Connecticut-based maker of postage meters and machines, to make international shipping less onerous. Buyers will be able to estimate duties and taxes in real time, Gish said. Sellers can ship their goods to a U.S. Pitney Bowes location, which will handle the rest of the package processing, including tracking, and send the cargo abroad, he said.

To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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