eBay Now: eBay's Same-Day Delivery Service

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Case Details:

Case Code : OPER110
Case Length : 18 Pages
Period : 2010-2013
Organization : eBay.com
Pub Date : 2013
Teaching Note :Not Available
Countries : US; Global
Industry : E-commerce

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Growing Competition

For a long time, same-day delivery was considered an impossible task for online retailers. Earlier, many had tried it and failed. However, in 2009, Amazon offered same-day delivery service to its premium customers who paid an annual fee. By December 2012, same-day shipping had replaced free shipping as the new must-have proposition for retail businesses. Though it was a logistically complicated and costly proposition, big retailers from Walmart to small shops to the Postal Service were taking the risk. Google also jumped into the fray and began testing the service with several chains...

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Challenges for eBay

While eBay’s CEO, John Donahoe (Donahoe), opined that same day shipping was inevitable and would be everywhere, there was an armada of competitors and a host of potential rivals in the form of startups ready to compete with eBay. However, apart from the competition, there were various other concerns about the same-day delivery service started by eBay. There were logistical problems like the necessity for large scale of operations, costs to the company being high, necessity of employing couriers/pick-up valets, and the success of such a system being dependent on the acceptance and usage by consumers...

Can eBay Pull it off?

By 2015, eBay was aiming to double its active user count to 200 million and expected to report around $21.5 billion and $23.5 billion in revenue for the same year. By 2015, its PayPal unit also expected to double the amount of payments processed during 2012 ($145 billion). Donahoe implemented other pricing alterations like simplifying the price structure, which would phase out its tiered commission and listing-fee structure for many items and replaced it with flat sales fees based on item category...

Exhibits

Exhibit I: Global E-Commerce Statistics
Exhibit II: The 2012 E-Commerce Index
Exhibit III: EBay's Financial Data 2008-2012
Exhibit IV: EBay's Net Revenues by Type and Geography 2008-2012
Exhibit V: Various Types of eBay Business Models
Exhibit VI: Comparison of Same-day Delivery Promises

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