Abstract

This case discusses eBay’s business model and its supply chain and goes on to describe its ambitious same-day delivery service. In 2012, eBay started its same-day delivery service, eBay Now shortly after its rival Amazon announced its same-day delivery service. Initially started in select cities in the US, the eBay Now shopping application could be downloaded to the user’s Apple iPhones and iPads. Once the customer ordered the product, it was delivered within an hour by an eBay valet. On October 10, 2012, the service was made available to all the residents of San Francisco and was later extended to various other cities. Unlike Amazon, which threatened the existence of local retailers, eBay aggregated local individual retailers/mom-and-pop stores/retail chains and offered them a platform to sell their merchandise with the advantage of same-hour delivery. While there was a location advantage for eBay, it had to employ couriers to make individual deliveries. It also faced competition from well established retailers and many start-ups that imitated its business model. Moreover, operating a same-day delivery service was fraught with various risks and challenges and could snowball into a logistical nightmare for eBay. This case is meant for MBA students as a part of the E-commerce/ Supply Chain Management/ Operations Management courses.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of e-commerce, its growth, and its impact on traditional retail.
• Understand the logistics and supply chain management of retail and e-commerce businesses.
• Understand eBay’s e-commerce strategies and its same-day delivery service.
• Analyze the pros and cons of same-day delivery vis-à-vis regular delivery.
• Analyze the impact of eBay’s same day delivery on other online and physical stores.

Keywords

E-commerce, Supply chain, Supply chain management, Logistics, Same-Day delivery model, business model, online and offline retail, ebay, Amazon, Wal-Mart, eBay Now