Is eBay ready to take on Amazon? Maybe so.eBay Germany recently launched a loyalty program similar to Amazon Prime, says The Verge. Much like the Amazon Prime next-day, free shipping program, top-rated eBay sellers in Germany can offer free shipping to subscribers. Though pricing details have not been disclosed, estimates put the annual fee between $17 to $22 U.S. The program is currently being tried in parts of Germany, but is expected to be available throughout the country during the latter half of 2015.”Through this new program, sellers will have the opportunity to commit existing customers even more strongly to themselves and to gain new customers in addition,” said Maike Fuest, director of communications for eBay Germany.In exchange for offering free shipping, sellers who participate in the program will receive a discount on the commission they pay to eBay and their wares will be highlighted in search results.It sounds like a good program for eBay Germany’s buyers and sellers, but as The Verge explains, there are challenges. Amazon has direct control over the shipping of its products, so it can honor its next-day and two-day delivery promises. eBay doesn’t have the same luxury.This announcement comes on the heels of Wal-mart’s announcement that it go head-to-head with Amazon, offering unlimited shipping for an annual subscription fee of $50. Like Amazon, Wal-Mart retains control of its products and distribution centers, so it has better quality control than eBay, but even Wal-Mart can’t match Amazon’s same-day and next-day delivery promises.Insider Take:It seems that everyone wants to get on the subscription bandwagon these days, and when done properly, subscription business models can be very successful. In fact, as one of several revenue streams, subscriptions can offer a nice, steady stream of income for companies like eBay Germany and Wal-Mart. But like Jeff Bezos has done with Amazon, those companies aren’t guaranteed success. They need to figure out the right pricing and product mix for their customer base.Amazon Prime, though more expensive at $99/year, offers more than next-day shipping. It also offers unlimited photo storage and access to its streaming on-demand video service which contains favorite, classic TV shows and movies, but also original programming. eBay and Wal-Mart are unlikely to be able to compete offer these features, at least not at this early stage. Can they compete on price alone?It is smart for eBay Germany to start small with its subscription program and to test the waters in a limited market, before expanding to a larger audience. First, it needs to figure out what shipping turnaround time it can expect from its top-rated sellers, and once it has assurances that its sellers will deliver, literally, it can play with the price point. It will take time to fine-tune its program. Assuming the eBay Germany experiment is successful, eBay can try duplicating the program in other markets.
Is eBay Ready to Take on Amazon?
Is eBay ready to take on Amazon? Maybe so. eBay Germany recently launched a loyalty program similar to Amazon Prime, says The Verge. Much