EBay vs. Amazon: A duel to be the plumbing of e-commerce

EBay vs. Amazon: A duel to be the plumbing of e-commerce

Summary: EBay's $2.4 billion acquisition of GSI Commerce puts it squarely in the fulfillment business and gives it the retail partnerships to more effectively compete with Amazon.

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EBay's $2.4 billion acquisition of GSI Commerce puts it squarely in the fulfillment business and gives it the retail partnerships to more effectively compete with Amazon.

Amazon has been a big headache to eBay with its marketplace and fulfillment services that bring more sellers to its platform. Now that eBay just bought GSI Commerce---one of the biggest competitors to Amazon you probably haven't heard of---the online auctioneer can do four things:

  • Become a partner with massive multichannel retailers.
  • Ultimately extend fulfillment services to eBay sellers.
  • Weave PayPal as a payment option at large retailers via GSI's partnerships.
  • And scale GSI's business in a way that wasn't possible before.

Also: eBay acquires GSI Commerce for $2.4 billion

The GSI purchase---assuming no one swoops in with a better bid---is a no brainer for eBay. The deal could be as smart as the PayPal purchase and put a long line of miscues (like the Skype acquisition) to rest. GSI is the real deal. It operates the back end e-commerce plumbing for Toys R Us---a former Amazon partner---Dick's Sporting Goods, Petsmart, Bed Bath and Beyond and others. The King of Prussia, PA company just off the Pennsylvania Turnpike is down the road from QVC, another massive retailer that's a GSI client. What does GSI have that Amazon doesn't? It's not a competitive threat to retailers and that fact will bring more business to eBay and its units.

"What is common about all of our assets is that we partner with retailers and we do not compete with them, and we believe retailers are looking to partner with someone, not be concerned about competition," said eBay CEO John Donahoe. Indeed, eBay outlined a strategy a few weeks back that revolved around being the glue of e-commerce. In this vision, eBay can sit in the middle of offline, mobile and Internet commerce as an enabler. GSI fits this mold well.

Amazon and Target plan to break up a fulfillment and infrastructure deal for one obvious reason: Amazon will ultimately compete with Target. EBay can go to Target and land some business for its GSI unit. And now GSI can give eBay a conversation starter to offer PayPal at point-of-sale terminals at some of GSI's 180 e-commerce services customers. It's a nice big circle. Simply put, GSI and eBay can open a lot of doors for each other.

It increasingly looks like eBay has a nice strategy as an e-commerce enabler. GSI only adds to its prospects. The eBay renaissance looks increasingly likely as long as the company can execute.

Related:

Topics: E-Commerce, Amazon, Browser

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9 comments
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  • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

    Ebay doesn't have the infrastructure , it'll never work. Plus they use Windows.
    Return_of_the_jedi
  • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

    I hate eBay with a passion. It's just a bunch of junk/stolen goods.
    Droid101
    • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

      you need to add counter fit to the list
      r6456
  • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

    Well, if this is the direction Ebay is headed, then the heat is off of anyone who wants to step into the Good Old Ebay's Shoes. Google, for instance, is the PERFECT replacement for the Auction Action hub. Frankly, I get all excited like a kid on Christmas Eve just thinking about it.
    Michael Cheynum
    • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

      @Michael Cheynum

      I am a founder member of the auction listing service that will be glad to fill Good Old eBay's Shoes. It was just launched on 1/15/12 and is an all inclusive auction listing service called Big Value Depot. We offer 5 free listings for try it out and our smallest package is $15 per month. eBay is getting nervous because of all the competition it is getting right now, but BVD will be its biggest headache. Our massive media campaign will make us a household name and we have many other marketing tools to make this a great success this year. Check us out and you will see for yourself.
      giftlady
  • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

    So what...?

    As a small seller, I decided long ago that eBay was only really interested in big corps, and those who wished to behave like big corps. As in, sell in huge quantities.

    What the internet needs, imo, is a hand grenade thrown into it, that creates a life-changing experience for the Amazons, eBays and Paypals of this world.
    amclpreston
    • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

      @amclpreston I suspect the Amazons, eBays, Paypals and Googles of the world have seen the handwriting on the (Facebook) wall. There's your "hand grenade" - Mark Zuckerberg's little gizmo with half a billion subscribers. ;-)
      ThoughtFollower-23855554368340454166801624405803
  • RE: EBay vs. Amazon: A duel to be the plumbing of e-commerce

    If eBay and Amazon got married Big Value Depot would be their baby! Yes BVD just launched on 1/15/12 and has implemented a massive media campaign that will make it a household name in the coming year. BVD has the features of both selling and earning a perpetual, residual income for life.
    giftlady
  • Best alternative to ebay

    With ebay making major changes in fees, charging more from the sellers and putting a restriction on the minimum resolutions required to upload the product's photo.. I believe the best would be to look for an alternative which is best in the competition and which allows you to keep all your earning to yourself and not share it. Where sellers can:
    1. Create Free listings
    2. No Transaction Fees
    3. Auto sync with ebay..carry all your listings from ebay along with the ratings and feedbacks in just a click.
    4. Free integration with Google products (which auto populates the product description form for you, saving your precious time) and Google Shopping (which tells anyone who search on google to buy a product that it is available on our website, which by the way we pay for and provide you the service absolutely free)
    5. Payment option like Paypal and Amazon for the most secure transactions
    6. which does not allow you to leave a feedback for a cancelled transaction
    7. a platform that not only list your products but also organise your customers and market your product in your network
    8. a platform where you are just not dependent on ratings but also can leverage your social and professional profiles using log in through facebook, linkedin or google accounts
    9. A platform that allows you to know the counterparty and build trust on the basis of work profile, school, college and other such dimensions.
    10.Unlike ebay it has just one website (not different website for every country) so you can sell products worldwide and buy awesome products from across the globe as well
    11. Unlike Ebay you can upload any resolution image and do not need only high resolution images to upload
    12. Last but not the least it is absolutely free

    And so the website that gives you all this is www.truegether.com

    We have released our beta version and the new website with all these points said above will be launched soon in June, 2013.

    We request all the sellers to list their product and leave us a feedback to help us improve more and give you a splendid experience of selling online.
    Parul Sharma