EBay rolls out new delivery program to compete with Amazon Prime.

EBay Joins the Turf War for Amazon Prime Subscribers With Its Own Loyalty Program

EBay Joins the Turf War for Amazon Prime Subscribers With Its Own Loyalty Program

Moneybox
A blog about business and economics.
May 22 2015 2:24 PM

EBay Joins the Turf War for Amazon Prime Subscribers With Its Own Loyalty Program

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Devin Wenig, eBay’s CEO-designate, speaks in Berlin in September 2013.

Photo by Odd Andersen/AFP/Getty Images

Last week it was Walmart getting into subscription delivery to ostensibly take on Amazon Prime; this week it’s eBay. The company is piloting a loyalty program in Germany that gives members benefits on shipping and returns, one which it plans to introduce there more widely in the second half of the year. A Web page advertising the program, to be called eBay+, doesn’t offer specifics on cost, but it’s been reported that the annual fee could be around €15 to €20, or about $17 to $22. That would make eBay’s loyalty offering among the cheapest out there. Amazon Prime—which comes with many more perks than free shipping—costs $99 a year, and Walmart’s service is being priced at $50.

Here’s a little more from the Wall Street Journal:

Ebay is promising better product placement for sellers’ merchandise, and also discounts on selling fees and a subsidy to help cut the cost of shipping and returns, according to a spokeswoman. Sellers will have to agree to dispatch goods on the day they are purchased and offer free returns within one month. The spokeswoman declined to disclose the price, and said eBay will have more details to share once it is introduced in the second half.
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While eBay’s program hasn’t started yet, the Street is reporting that people are already skeptical. Maike Fuest, eBay's director of communications for Germany, told the Street that eBay+ will help sellers “commit existing customers even more strongly to themselves” and also “gain new customers.” But sellers are concerned that they’ll have the bear the cost of all these new eBay+ benefits. Customers, for their part, might wonder how eBay plans to standardize same-day shipping (and free returns one month later) when they are buying from scattered eBay sellers instead of eBay directly. EBay, after all, isn’t exactly the well-oiled logistics machine that Amazon is, nor has it built its reputation on customer service in the same way.

But perhaps that’s why eBay feels like the time has come for eBay+. When eBay spins off PayPal in the third quarter of this year, the company will lose its thriving, fast-growing payments arm, and be left with its dwindling marketplace and a vague aura of dustiness. To make itself viable as a standalone business, eBay desperately needs to reinvigorate its offerings and refresh its reputation with consumers. A loyalty program could be a great way to do that. If it’s executed well, that could draw far more customers into eBay and, maybe more importantly, put it back alongside modern e-commerce successes like Amazon Prime and Google Express in their minds. The key phrase, of course, is “if it’s executed well.”

Alison Griswold is a Slate staff writer covering business and economics.